Is Being a Home-Based Independent Contractor Right For You?

As more and more businesses downsize, more and more people are opting to work from home. I have worked from home as an independent contractor for over nine years, doing primarily administrative work.

This article focuses on people who work as independent contractors, as opposed to telecommuters. A telecommuter is an employee of company that does some (or most) of his work at home, but who goes into the office on occasion. He is considered an employee, gets a W-2 form at the end of the year, and has the benefits and restrictions of an employee.

Home-based independent contractors are not employees. We are self-employed. As with all situations, there are pros and cons.

The upsides:

• You set your hours. In my case, I have to work a certain number of hours, and I need to make sure they are within normal business hours for the area of the country for which I'm working. However, I can pick the specific hours I choose to work.


• It's much easier to take off work for personal business. If I need to take my mother to the doctor, the car to the mechanic, run errands, go to the gym, or even take my dog to the vet, I just do it. I can fit work around my personal life.


• In the 8-to-5 corporate world, if you don't feel well, you have to decide by the time you need to leave in the morning if you go into work or not. If I don't feel quite well, I can sleep in later, get up and work for awhile, go back to bed and rest, then get up and go back to work throughout the day. I seldom need to take an entire day off, although I can (and do) if I need to.


• There is no dress code. I can go to work in jeans, sweats or my pajamas, if I want to.


• There are tax benefits. Being self-employed, I can deduct my business expenses from my income and am only taxed on the remainder. The IRS is getting more strict about what constitutes a deductible business expense, but there are still tax advantages.


• You don't have to deal with unpleasant co-workers. There's no loudmouth in the next cubicle, or "coffee cup guy" who never seems to have anything to do but to go around and try to chat while you're trying to work, or people who bathe in perfume or aftershave (or worse yet, never seem to bathe at all.)


• You can cook a roast, do laundry, or other chores that don't require constant attention but that you need to check on periodically.


• You can be home with your children, dog, cat, guinea pig, etc.

The downsides:

• You need to be extremely self-disciplined. Yes, all you have to do is to go into the office or to the desk in the living room or to the kitchen table or wherever and do you work. On the other hand, you do have to do it. You can't stay in bed all day. You can't watch TV all day. You can't run errands all day. It can be very hard to do a task you don't want to do when the weather is beautiful and the day is calling you to be outside.


• Friends and family don't always understand that just because you're home doesn't mean you're not working. You need to be firm in explaining what hours you are unavailable or it can be very difficult to have the uninterrupted time you need.


• You don't have any benefits. You have to get your own health insurance. If you want a retirement plan, you have to fund it. There are no paid holidays and no paid vacations.


• Your income will probably vary. No matter what type of work you choose to do, you will only be paid when you work. Chances are that projects and/or clients will come and go. Although you can decide how much you want to work, chances are there will be times when you either can't get as much work as you would like or the work you've already obligated yourself to do will take longer than you'd planned.


• It's lonely. Yes, there are no annoying co-workers. But there are no fun co-workers, either. No one to go to lunch with; no one to complain to about your rotten day; no one to lift you up when work gets you down.

Although the pros outnumber the cons, you need to decide if the pluses outweigh the minuses for you. Freedom comes with a price: in this case, uncertainty. If you are not ready to face days, weeks, or longer with little or no income, being an independent contractor may not be for you.

I have been a self-employed independent contractor working from home for over nine years. I specialize in administrative work, spreadsheet work, appointment scheduling, and internet research.

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