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How To Protect Your Freelance Or Independent Contractor Business As Laws Change

Written by: Will Soprano, Executive Contributor

Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.

 
Executive Contributor Will Soprano

Are you a freelancer or independent contractor that operates like a business, or are you just skilling along? It’s an important distinction, and I’m going to share my personal experiences as well as lessons from some of the most successful companies so that your business as a freelancer/contractor can stand the test of time.

 

A tree in the middle of city

I thought it would be useful to include some information about the implementation of regulations by the Federal Government to “appropriately classify workers”, which goes into effect March 11, 2024. So if you want your business to be prepared for any and all things, keep reading we’re going to go over how to make that happen.

 

The self-exploration and thought-work you’ll discover below has helped to shape my beliefs and inputs with the world around me, and recently I’ve added a new layer to this work. The first part of this article is a little qualification followed by my experiences and then some suggestions for freelancers and independent contractors to ensure sustainability in the marketplace.


Are you a freelancer or a business owner?


Let’s qualify ourselves a bit. I hope if you’ve continued reading that you consider yourself a freelancer or a contractor, but these terms can also include solopreneur, consultant, etc. And what I mean by these terms is that you work for yourself, hired by others, with a set of skills that you use to deliver a service or salable good, in exchange for money. Is that you? Great.

 

So, if the above describes what you do then I have a few more question prompts for you: Do you have a business? Do you know how your business fits into the market? Can your business survive turbulent market conditions? Have you written a business plan? There might be work for you to do on your business, and I’m going to share some of my experiences doing that work with you today.

 

Now that we’ve qualified ourselves, let’s get started on the work. The following are a combination of personal experiences and conversations that I hope will help you succeed in a professional landscape that is not designed to help small service businesses. And perhaps, while you may have come for a laugh, you’ll stay to do some of this work yourself for yourself personally and professionally.

 

From personal reflection to professional clarity for independent contractors and freelancers


A moment of serendipity occurred a couple of weeks ago I was doing some very personal work on myself and a friend noticed that I’d only focused on the negative. In doing so she observed that I’d never really named “what, who and why” I am me. So I set out to write a series of I am statements. And when finished I realized that I had the makings of a mission statement, which got me to thinking…

 

Businesses that last hundreds of years are mission-driven and use that mission to tether themselves to core values, beliefs, a purpose and vision, etc. It’s from this contemplation that these companies are able to better understand who their customers actually are (personas) and how their idea fits into the market. If a business can use this kind of thought work for timeless creation, should I do this for myself?

 

Pro Tip: When you do this kind of thought work on yourself or your business, it’s best to do it with others. I shared this work with a handful of people, friends with skills and experiences of their own. One of those friends is Clara Walton  a rockstar Graphic Designer (freelancer) that took the time to ask me questions from her perspective. She asked leading questions that she uses to understand her clients and their needs which helped me to paint a more visual picture of me and my mission.

 

When I finished writing this personal mission I set my sights on a professional one. But I’m not a business, so why would I do that? Because like a business I create and my clients are the people and companies that I work with. So my professional life should also have a mission statement. Off I went into creator mode, with the results being the same path that I was on before just slightly adjusted and affirmed with a better understanding of who my potential clients will be moving forward.

 

What emerged from this introspection was not merely a list of attributes or a collection of anecdotes, but a set of beliefs, values, and aspirations interwoven with the threads of my identity.

 

This is the kind of work that allows a person or business to tether themselves to a core that frees them to create for their customers rather than flailing around in a hypothetical land of dreams.

 

With this kind of thought-work, these smaller businesses are able to drive scale and success. I believe that individuals can do the same, even if they will never be as big as Apple, Google, Amazon, et al are constantly evolving to fit themselves to be of service to their customers within the constraints of market conditions, technological advancements, and the current state of human needs.


New rule on independent contractor classification: A conversation


About a week later while perusing LinkedIn I stumbled onto a conversation that I’ve come to regard as important. Jason Hewett had created a post to talk about the incoming federal law that is set to go into effect on March 11, 2024. I’d not heard of it before, but apparently this law is trying to “appropriately classify” employees vs independent contractors. And while that sounds pretty innocuous, in talking with Suz Baldwin I learned that California actually passed a similar worker classification state law in 2020, AB 5, and the results have been grim so far.

 

The most egregious thing that seems to have resulted from the California law was that the independent contractors in that state had their contracts replaced by those from other states. But maybe this new federal law creates an equal playing field for all of the freelancers/contractors being hired for services rendered… Or maybe it sends American businesses to replace these individuals with freelancers from Europe and other countries.

 

This got me thinking out loud… Do independent contractors think of themselves as a business? Do they go through the same foundational work that I’d just done on myself? Have they taken that further to write a business plan, complete with market idea fit and then persona development for their customers? More importantly - does their branding reflect who they are, what they offer, and who they offer it to?


How independent contractors can prepare for the new law


And so I continued pinging with Jason and Suz trying to understand the law that’s on the horizon, asking if they thought the independent service providers are prepared for the market impact. If the fallout from the California law is any indication there are going to be a lot of independent contractors, freelancers and solopreneurs out of work, but maybe this law also creates a better-skilled services market one where individuals really consider themselves as an entity and ask some of the questions that long-lasting businesses ask.

 

When we build a company, often the advice that I hear is “write a business plan”, which is putting the cart before the proverbial horse. In starting a business as an independent contractor, especially in a regulated environment where companies are scrutinizing line items, we have to start at the beginning.


Incorporating skills and freelance work to a business entity, complete with a business plan


The first step here is to incorporate as an LLC, which is different in every state, but is a pretty straightforward process. Then we dive into the hard-hitting questions, understanding who we are and what our skills are. Having gotten to this point your next task is a set of questions to find your mission, big hairy audacious goal (BHAG), market analysis, market idea fit, and all of this results in a business plan.

 

And now that you’ve done all of the thought work, legal work (LLC), and market considerations you’re prepared not only for a future of potential but you separate yourself from the individual workers that are concerned with being replaced under the new regulations. And while all of this work solves for viability, it also helps folks to look inwards, turn their skills into a real service, and those services into a full business.

 

You see, individual workers that are currently wondering whether or not they are going to be replaced by the organizations they currently provide services for are probably being hired as their social security number under a 1099. And those folks are in trouble but you won’t be if you do the work I’ve summarized for you above.


The brand identity of a freelancer comes from a well-defined business


Whatever the results, however the law is interpreted by lawyers of large organizations hiring freelancers, if you establish your business on solid footing you’ll establish a proper brand for yourself.

 

And regardless of outcomes there’s one thing that I’ve come to tell you: who you are matters, so do the skills and uniquities that your work exemplifies. But if you don’t look inward, claim those things, and then show those things visually, going through branding exercises with an awesome graphic designer like Clara Walton, you might find a harsh experience in the market as you compete with agencies and businesses that have done this work.

 

As I would turn thought-work into results, I called on my friend Clara one more time. Armed with all of this work she created really powerful visuals for me as a professional, in this brand identity exercise. Quite frankly, the power and uniqueness of the designs she delivered was possible because she was willing to listen when I shared my values and beliefs, and that I knew them in the first place.


The path from freelancer to business owner


Whatever happens come March 11, 2024 there’s a lesson I’ve learned in all of this: Who we are as people is as important as the skills we have and just because we are skilled and unique workers, does not mean that we are in fact a business. I’ve taken this a step further and defined myself as a professional, regardless of my legal working status (W-2 / contractor/entrepreneur).

 

But if we are going to set sail in the treacherous waters of business as a service provider, we might want to take a page from entities that came before us and continue to thrive today. There’s a reason they’re still succeeding in a market that eats more small businesses than it makes.

 

So I ask again: do you have a service business or are you just skilling along? I hope that I’ve helped you to better understand how to get started getting started, and maybe this begins your very own journey to self-reflection, professional introspection, and the resulting creation or continuation of a business that can survive any and all challenges ahead.

 

In doing the thought-work, incorporating as a business entity, and building relationships within the market fit that, through personas are most likely to appreciate your work, you have a better chance at surviving the pitfalls ahead as the landscape changes for all independent workers.


Learn more about Will Soprano on LinkedIn and his personal blog.


Will Soprano Brainz Magazine
 

Will Soprano, Executive Contributor Brainz Magazine

From writer to all things dev & tech Will has spent a lifetime trying, failing, learning and growing. In nurturing his ability as a writer he found that he had a knack for supporting software developers & connecting orgs across functions. As his career arc was hitting its first peak he found himself broken physically, emotionally, and professionally. That was the beginning of his personal growth. After years of trial and error he finally realized that sobriety was the answer. With nearly 4 years sober, he's not just a new person socially but professionally as well. The mental health community and his peers professionally have responded to his willingness to serve and authenticity.

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