Want to get started as an independent contractor? Good idea. But before you start doing business, it's smart to know what's involved. In this article, we take you through the 8 steps to become a successful self-employed person. Including advantages, disadvantages and practical tips.
1. Research whether becoming self-employed is for you
Not everyone is comfortable being an entrepreneur. Consider whether you are the type of person who can do without a fixed salary, works well independently and does not mind administration, acquisition and uncertainty. Make a business plan, for instance, and think about your workplace. Many self-employed people start from home, but renting is also possible.
2. Determine your hourly rate
A good rate is the foundation of a healthy business. Look at your costs, your desired income and what competitors charge. You can work with:
- Hourly rate
- Project prices
- Subscriptions
- Result-oriented prices
If necessary, use an online calculation tool to determine your minimum rate. Read here more on.
3. Limit your risks
As a self-employed person, you are responsible for yourself. Draw up general terms and conditions to record agreements with clients. Think about:
- Insurance (disability, liability, legal aid)
- Safety risks and how to mitigate them
4. Choose your legal form
Most self-employed people start with a sole proprietorship, but a private limited company can also be advantageous. The legal form determines your tax obligations and liability. If necessary, use the KVK Choice Help for legal forms to make the right choice.
5. Register with the Chamber of Commerce
Your registration with the Chamber of Commerce is compulsory. You enter what you do, come up with a company name and get an SBI code that describes your business activity. The Chamber of Commerce also automatically arranges your VAT number.
6. Organise your administration properly
Good administration is both compulsory and convenient. You can see how your business is doing and avoid hassle when filing your tax return. Think about:
- Creating and saving invoices
- Mileage and time recording
- Financial statements or profit and loss account
7. Arrange your taxes
You pay VAT and income tax. If your turnover is low, you can consider the KOR (small entrepreneur scheme). It is also smart to set aside money for your returns and provisional assessments.
8. Start acquiring customers
Without customers, there is no business. Start networking, build a website or LinkedIn profile, and ask around in your area. Remember to clearly communicate what you offer and what customers can expect from you.
Advantages and disadvantages of becoming self-employed
| Advantages: | Disadvantages: |
| You decide your own working hours and rates | You have no fixed income or safety net |
| You choose your own clients and assignments | You are responsible for taxes and administration yourself |
| You can take advantage of tax benefits such as start-up deductions and self-employment deductions. | You must provide your own safety nets in case of illness or failure (such as insurance or buffer). |
