What are the pros and cons of being an independent contractor?

Question

Justin Parker · Accepted Answer

The pros and cons of being an independent contractor are the freedom to choose jobs, networking opportunities, and below-average job security. Here are the top pros and cons of being an independent contractor:

Pros:

Freedom to choose jobs. One of the biggest benefits of being an independent contractor is the freedom that comes with these types of work.
Independent contractors can choose projects based on interest and other factors, like the specific client. Some can even choose when and where to work to varying degrees.
Networking opportunities. Independent contractors can work with and for many different types of professionals and companies, resulting in an ever-expanding Rolodex of relevant professionals and companies.
It helps with job referrals and opens an independent contractor to more lucrative opportunities.
Many areas of specialization. There are many different types of independent contractors, and they often specialize in different areas. Here are some common independent contractor types:
- HVAC. HVAC contractors work on installing, repairing, and maintaining systems and equipment associated with cooling, heating, and ventilation.
- Landscaping. Landscaping contractors have experience with the design and maintenance of both gardens and lawns. They provide services to commercial business properties and residential properties alike.
- Carpentry. Carpenter contractors are those that provide woodworking services. They are available for residential and commercial use and often contribute to a structure's skeleton or more specific internal structural needs, like furniture, cabinets, and tables.
- Plumbing. Plumbing contractors work with water and sewage systems at commercial and residential properties. This includes issues with toilets, sinks, water heaters, etc.
These are just a few areas, but there are many more.
Most types of independent contractors do not need business licenses. An independent contractor does not need a business license in most cases. This holds for the majority of states in the US, but laws can vary in specific cities, counties, and regions.
Business licenses are normally required for independent contractors that work in the following industries:
- Medicine or medical care
- Law
- Nursing
The only states that require all forms of independent contractors to obtain business licenses are:
- Alaska
- Washington

Cons:

Fewer options with taxes. Most companies that employ independent contractors do not take income taxes, pension plans, or other deductions from a contractor's compensation.
Fewer benefits. Most independent contractors cannot purchase medical coverage plans or other vital employee benefits that traditional workers can access.
Less than average job security. Unless already linked into a network where a steady stream of contracting jobs will be coming in, some in this field have difficulty finding another project after completing one. Making a stable income is challenging for some in the field.
Career advancement. Though independent contractors can expand their skill set, resulting in more work opportunities, they don't have a traditional career path for advancement.