4 Cons of Being a Consultant
By Victoria. Published on Monday January 16, 2023
As much as being a consultant is attractive, not everything appears as it does. There is a need to take into account the hurdles you may face as you join the gig economy or consultancy world. Here are 4 cons to consider when becoming a full-time consultant.
Being a consultant may mean not getting paid the amount you did as a consultant especially as you begin and build your craft. You may get n amount that allows you to pay your rent but not afford you other lifestyle choices. This is not to say you should be compliant and content throughout as this may demotivate you after some time and you may quit being a consultant and become a salaried employee. However, if you do both, being a consultant may be your extra source of income. It is also important to know your value and not be afraid to charge certain amounts. There is always a client who is going to pay you what you ask for.
Little or no health/retirement benefits
The chances of the company you are consulting with giving you insurance benefits are not guaranteed. This occurs as a result of opportunities being short term hence there is no need to factor in the benefits that employees receive. One way you can ensure your health is factored in is to conspicuously include health insurance in the amount you charge for consulting services – if possible.
In one year you could be consulting for more than five clients. How do you pay your taxes when the time comes? It will be crucial to always look at your contracts whether they factor in withholding tax and whether you will need to account for the amount you have received when the tax period sets in. It’s also important to understand the tax bracket – what amount gets taxed and how much the tax is within specific price ranges.
From transport to equipment expenses, most of these will be from your own pocket. Whether you need to print documents or do a presentation. In most cases, you must have your own phone, laptop and even internet bundles to facilitate your services. There are meetings with the clients and even making calls with the clients. When developing your overall budget, these are cost implications you need to consider in order not to fall short of the contract.