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Being a full-time worker without benefits. Many companies attempt to avoid paying for benefits and taxes by hiring contract workers instead of permanent employees. While this may be a good source of income for you, especially when you’re just starting out, you need to keep two things in mind. First, you are responsible for all your taxes and benefits (such as health insurance) and, often, your own equipment. These can add up to a lot of money. Consider these costs when you set your price or you’re going to have an unhappy surprise when it comes time to pay taxes. Second, you’ll be working for one “client.” If they decide to cancel your contract, you won’t get unemployment insurance or have any other protections.

Getting enraptured by stuff that is cool, but which can’t bring you sufficient income. As a techie, you probably like hanging out on the bleeding edge of technology. The reality is, most customers do not. They want to know that the product you’re selling them is stable, reliable, and proven. If you’re a VAR or consultant, this may mean focusing on products that are a generation or two behind the leaders—but that may be where the money is. Likewise, if you’re developing a product from scratch, make sure there’s a market for it in the “real” world—not just among other techies!

Obvious (and Not-So-Obvious) Business Choices for This E-Type

Software developer/engineer

Home theatre designer/installer

Network/system administrator

Environmental impact consultant

Structural engineer

Home appliance repairs

Technical support service provider

CAD designer

Tech startup entrepreneur

Value-added reseller

Product designer

Industrial machinery repairs

Software usability testing

Search engine optimizer

Undercharging. Many technologists don’t realize their own worth. This is because understanding and using technology comes easily for them—it’s natural. So they assume that everyone must find it easy and obvious. Of course, the reality is that technology is like “black magic” to the majority of people—just look at the number of VCRs out their with blinking clocks! So set fair prices for your services, and then be sure to charge them to your clients. In general, attracting customers by offering very low prices only brings in bargain hunters—who will dump you as soon as they find someone else with even lower prices.

Globalization. You’re undoubtedly aware of all the hand-wringing about technology jobs being “off-shored” to countries where employers can pay far less for technologists and engineers. You even may be one of those who lost their job to outsourcing. Consultants and independent contractors in this country still have advantages to those abroad: first, they’re here. Ultimately, people like to do business with people they can see, speak to, and trust. Second, you yourself might be able to take advantage of off-shore workers as you build your company. You may decide that you want to have your management and sales teams here, but do some of your design and development work abroad.

In any event, you will greatly enhance your chances of success if you work on those communication skills—it will be more difficult for developers overseas with broken English to compete with you if you’re able to communicate with customers and clients clearly, concisely, and in the language of their native tongue.