Freelancers, Independent Contractors and Small Businesses – Oh My!
The work of a freelancer, independent contractor, and true small businesses have been in the news a lot lately. From taxes levied and proposed, to payment of bills and collections, to credit available, and everyone who is not a freelancer or independent contractor or a true small business has something to say on the issues. (I say true small businesses meaning those who have owners doing the grunt work right along side the worker bees, and not on vacation or off-site playing tennis. Owners who put their name, finances, heart and soul into the work as well as the business. In my mind, every freelancer and independent contractor is a small business too.) The independent contractor, freelancer and true small business are those who every big business has turned to at one time or another – more frequently the past few years – to get a job done and get it done right with quality – the first time.
Well, as a true small business, who began as an independent contractor and then freelancer, who works with freelancers and independent contractors on a daily basis, I felt the need to air my thoughts.
Taxes – for those who think taxing us more will help us grow – you are nuts. If you think it will help the economy – again, find the fruit bowl and jump in. You are taxing the small business, independent contractor, freelancer to death. We are working hard with big business and helping them grow – leave us alone so we can grow too. Leave us alone so we can keep the jobs here in the good ol USA!
Available credit – There is not enough available credit around when you take into consideration, many of us need the credit because our bigger clients are paying slower and slower and we have personal and professional bills to pay. If we give 30 days for a client to remit payment and they take 45, the mortgage, utilities, and the payment date for the independent contractors used on our jobs have been passed, and we dig into savings and personal accounts, and well there is never a full “catchup” once we get behind. Decent credit is not available to someone who is behind already. Decent credit is only available to those who, quite frankly, don’t need it and have a credit score over 680 IF you are lucky. Probably more like 700 or above. In this economy, find me a freelancer, independent contractor or true small business that has a credit score that high since 2007 and maintained it.
Which takes me to the payment of our invoices, turning us into collectors ourselves. As a small business who uses independent contractors, I pay my IC’s every two weeks. I bill my clients every two weeks and give them 20 days to remit. Tack on the 15 days before a late fee is tacked on, and it is 45 days for payment to come. Oftentimes, clients will take 60 days before payment is made and disregard the late fees altogether. The great clients (other freelancers, independent contractors and true small businesses) who we understand are in the same boat we are, we tend to forgive the late fee anyway.
Continue that through months and months of billing and payments, and the quarterly tax payments due the moment you seem to get caught up, and there you have it. The downward spiral of small business, freelancers, and independent contractors. The most important aspect of USA if you ask my opinion. I know you didn’t, but you got it anyway.
Now many will say, just don’t accept work. That is not good business when a small business, freelancer, or independent contractor is trying to grow. If we did not accept the jobs, even knowing that payment could/would be late, we would not have an eventual income. Worse yet, we show a disloyalty to other freelancers, small businesses, and independent contractors who relay on us to help them earn their income as well. Even worse – many of the larger companies will find someone over seas to off-shore to, costing the US economy in so many more ways.
The small business typically works with freelancers and independent contractors who in turn are working for other bigger businesses, who also take that 45 to 60 days or more to remit payment. If you want to tax someone, tax those bigger businesses who are costing us little guys our homes and our livelihoods.
No, not all clients are slow payers. Some of us are lucky to have those clients that work hard to make sure we are paid. We all understand the trickle-down economy and how patience is needed. We all know how hard it is when we are waiting for the “check is in the mail” economy (http://wp.me/pLEiA-39) to turn around. We value our clients, but more, we value our work. And we continue to do the quality work that our clients demand.
So, please, to all you high paid suits who feel the need to continue to financially harass the true small business, freelancers, and independent contractors – think about it. If you kill our business, who are you going to turn to the next time you want the job done right?
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