“Full-time Millennial workers make substantially less income than the national average ($40,356) and 20% less than Baby Boomers did at the same age, (USAToday.)” We’ve all heard theories as to why so I won’t regurgitate them but instead would like to introduce a solution you might not have thought of; contracting your work under your own Limited Liability Company (whether you consider yourself an entrepreneur or not). Some of the reasons the income of full-time Millennial employees can be so low is because employers deduct the cost of insurance, training, benefits and other expenses from the salary you would have earned. All of which are non-factors with contractors.
How I doubled my income through my LLC in 4 months.
1. Choose a Specific Career Title
No one is going to pay you six figures to be a ‘generalist,’ that does something anyone else can do. You must narrow down an area of specialization that demonstrates how you can add value to an organization in a way few others can. One way to do this is by ensuring your Career Title uses 2-3 words. For example, Business Analysts tend to make more than Analysts, Senior Technical Writers make more than Writers, Patent Lawyers make more than Lawyers, etc, etc.
- If you’re not sure how to narrow down your Career Title consider taking this personality test and choosing from the job recommendations you get.
2. Start a Limited Liability Company (LLC)
You should start an LLC even if you don’t consider yourself an entrepreneur. It’s far easier, faster (3 days) and cheaper (only $125!) than you might think and there are a plethora of benefits for doing so including:
- A company (even if it’s just you) can charge significantly more than an individual contractor can.
- There are tax benefits for organizing your work under an LLC such as writing off your expenses to reduce your taxable income (be sure to get an accountant’s help with this!)
- You can assign yourself whatever Career Title you want under your own LLC (use this to gain or augment experience in specific industries.)
- If you’re ever unemployed you can organize the time off under your LLC.
Here are step-by-step instructions on how to form your own LLC: Start an LLC in Pennsylvania (if you’re from another state just google: how to start an LLC in ‘your state’)
3. Customize Your Resume to Rank in Recruiter Searches
Companies hire staffing agencies to find employees and/or contractors for them. These staffing agencies often search for those employees/contractors online via recruiting websites. You can rewrite your resume so that recruiters find you in those searches and instead of presenting yourself as a candidate for hire just present your new LLCas a candidate for hire. Below is an article I wrote on how to rewrite your Resume to rank well in recruiter online searches.
- Here’s how to customize your Resume so it ranks high when recruiters search for candidates: 5 Resume Hacks to get You Hired Faster
4. Upload Your Resume Online
Once your Resume is optimized to appear in recruiter searches upload it online so they can find it. Recruiters will then email and call you with job offers.
- Upload your resume using my article How to get Recruiters to contact YOU with job openings
What do I say to recruiters when they call me?
Be sure to ask if the job they’re sourcing for is open to a Corp-to-Corp arrangement. Meaning the job would hire your LLC rather than you as an individual. Even if your company is just you, you can still charge significantly higher rates and reduce your taxable income by writing off your expenses.
How do I determine what rate to charge?
Ask another professional in your field whose billing companies under a Corp-to-Corp arrangement how much they charge/how they came up with that number. (Or ask me!) Then use that number as a starting rate when talking to recruiters and gauge its effectiveness based on how recruiters react (do they agree readily? Go higher! Seem put off? Reduce it a bit) until you find a number that works.
Won’t I lose my benefits as a Contractor?
Depends, some staffing agencies offer benefits while others don’t. I’m on my wife’s benefits but I know everyone isn’t married so be sure to take this into account when determining a rate to charge as you might have to buy your own benefits package.
Won’t I lose job security as a Contractor?
Depends on how you define ‘job security,’ toiling away for someone else who can fire you for no reason at any time is far from ‘secure,’ in my opinion. But be sure to save some of your extra cash from your Corp-to-Corp contracts just in case you have some time in between contracts.