How to Transition from IT Employee to Small Business Contractor

10 Tips on Becoming an IT Contractor

Running a freelance IT business is completely different than working as an IT professional for another company. Of course, they both require similar professional skills. But working as a contractor requires you to cover additional business tasks.

Tips on Becoming an IT Contractor

If you’ve been working as an IT employee and are thinking about making the leap to IT contractor, here are some important tips to consider.

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Change Your Mindset

When you’re an IT employee, you are only responsible for doing the work you’re told to do. When you’re a contractor, you’re in charge of all aspects of client management and growing your freelance business. So you need to approach your work with a completely different outlook.

Adopting a growth mindset is an essential part of making the leap from employee to contractor, according to Dan Goldstein, director of marketing for GMS Live Expert, a 24/7 Outsourced Help Desk and NOC for MSPs. This allows you to create successful systems and grow your client base instead of just getting bogged down by the day-to-day tasks.

Save Money

Your income is also likely to be a bit different as you make the transition. Instead of a steady paycheck, you may have to deal with some inconsistent months. So it can help to build up a safety net while you’re still working a full-time job to cover any initial expenses and keep you above water during slow months.

Invest in Your Own Equipment

When you work at a company, they probably provide you with all of the hardware and software you need to work effectively. But when you’re a contractor, you need your own equipment. Make a list of the items you need based on the services you plan on offering and make those investments before you officially get started.

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Re-Prioritize Tasks

When you’re working as a freelancer, it’s not just about doing client work. You also need to handle marketing, communication, record keeping, and tons of other areas.

Goldstein says, “One of the key considerations when first transitioning to becoming a business owner is accepting that priorities no longer run sequentially. You need to be firing on all cylinders across all initiatives in parallel, all the time. For example, marketing and sales efforts cannot stop because an important customer is experiencing an issue.”

Create Support Processes and Documentation

One of the main benefits of being a contractor is that you can theoretically scale your freelance business over time. But you need processes in place so you can stay organized and potentially bring on help down the road.

Goldstein explains, “Developing your playbook from the outset will help you train new team members on exactly how you want situations handled and your customer experience to be managed. Even if it is just you in the business to start, plan for success.”

Focus on Marketing and Sales

Before you can actually grow, you need to find ways to reach new customers. Your exact marketing plan may vary depending on your specific offerings. If you work with businesses in your area, then you might consider some local ads. If you work with clients online, then you could pour your efforts into social media or content marketing.

Delegate Where Possible

To become more efficient, you eventually need to delegate some of your tasks. This doesn’t have to mean actually hiring a team. It could be automating or even outsourcing with contractors of your own.

Goldstein adds, “To make sure you stay on track, determining how to best delegate (either to staff or third parties) wherever it makes sense is key to success. There are no shortage of options in the market for you to leverage the expertise or economies of scale other proven vendors.”

Track Productivity

From there, you need a way to track how much you get accomplished using those tools or team members. This can help you determine which investments are worthwhile and which may need to be reevaluated.

Goldstein says, “Whether you outsource, hire contractors or hire in house staff – make sure that you have a well-designed system to track critical activities to ensure all is moving along as planned.”

Get Expert Input

When you’re running your own freelance business, you’re in charge of things like taxes, insurance and contracts. So it can help to seek out a business advisor, bookkeeper, or legal professional to help you make sure everything is official.

Evaluate New Opportunities

As your business grows, you’ll need to constantly make decisions about where to focus your efforts and resources. This is something that you’ll learn from over time, but it’s always a good idea to consider the impact of every possible avenue you take with a client or new business opportunity.

Goldstein says, “There is an opportunity cost to where you invest your time and money, focus your resources where you will generate the biggest impact on your own success.”

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Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. When she’s not writing she can be found exploring all that her home state of Michigan has to offer.

3 Reactions
  1. Network.

    Get to know lots of local businesses and their IT employees. Just because a company has IT staff doesn’t mean it couldn’t use expertise or services.

  2. Many ITs are now looking to create their own business. It is because they have the skills and the Internet is at their fingertips.

  3. Yes, the growth mindset is important. We sell 5 we profit from 5. If we want to double our paycheck, we need to work more to sell 10.