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Deciding to pursue self-employment as a consultant is a big decision. You're foregoing the traditional corporate hierarchy to become your own boss. When you choose to be self-employed, all the decisions that your boss would have made for you -- your daily tasks, your job description and how much money you make -- are all up to you. Being a consultant puts you in charge of your own career and earning potential and prioritizes your career over the goals of a single corporation.
Being a successful consultant is all about how well you market yourself. When you're a self-employed consultant, you have to see yourself as a peer to business owners and high-level executives. These are the people who hire consultants for their companies. No matter your industry, take advantage of every networking opportunity available to you and encourage clients to pass along your information to their contacts.
Plan Your Finances
Finances are a big concern of a self-employed consultant. Decide how you want to be paid, per job or by the hour. As a consultant, you negotiate your fee for each job you take, depending on the length and size of the job as well as what the company stands to benefit from your services. Do not undervalue your services but remain reasonable about the price. When working with a large corporation that has a large budget, you may be able to charge more than when you work for a small boutique firm.
When you work as an employee for a company, your taxes are deducted from your paycheck and paid to the government by your employer. Working as a self-employed consultant, you are responsible for paying your own taxes. Depending on the state that you live in, you may be required to pay taxes once per quarter or have the option to pay all your taxes at the end of the year. Some states impose a self-employment tax that you have to pay, however the cost of the self-employment tax may be offset by the deductions that you are allowed to take.
As a self-employed consultant you trade some of the perks that come from being the full-time employee of a company, such as health insurance, for the ability to be your own boss. Consultants must seek out and pay for their own health, dental and vision insurance plans. You also have to buy a life insurance policy, if you want to carry it, and start your own 401(k) or other retirement plan. No matter how long you work as a consultant for a company, you are still considered an independent contractor and as such are not eligible for any company benefits.
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