There are very few Full-time workers who have never dreamed of going to Contract basis. The advantages are obvious: more freedom, flexibility, no office procedures or politics, no suspicion that the effort you’re putting in isn’t justified by the rewards you’re taking out, better pay rates, and quite often the possibility to work from home
The IT/Tech business is particularly receptive to the freelance concept. There’s plenty of temporary work to sustain it and it often suits employers to have people working for them on a contract basis, so they don’t have to carry them as an overhead, especially at times when work goes quiet.
But it’s not all wine and roses. There are lots of elements that need to be considered before –and indeed after – you take the plunge and declare your independence. Let’s take a look at some of them.
First and foremost, freedom is great. The idea that you can select the projects you will be working on, and stay on it for 4, 6 or 8 months and then do something else is great. You don’t get bored. By working on shorter contracts you will gain experience faster, work on more varied projects and hopefully get some big-name companies on your CV. Also as a contractor you have the opportunity to learn, you meet different teams, several companies and amazing distinct culture. Plus, very often you have the opportunity to travel and work sometime abroad.
Based on real-time experience, many experts recommend that people who are thinking of taking this temp route should make the transition gradually. Rather than making a cold break, they suggest keeping a full-time job while building up a base of freelance contracts over the course of several months. Naturally, this effectively means doing two jobs in a day, putting in your time at the office then starting again once you get home. And don’t forget, while you’ve gained the freedom of being independent, you’ve lost some usual employee benefits like holiday pay and sick pay. So, again, you have to be ready to really put the hours in.
Then you have to consider how you’re going to get work. As we’ve said, there’s plenty of it around, but you can’t expect it to fall into your lap. You have to consciously devote time to trawling the various sources such as recruitment and freelance websites. You also have to be prepared to keep at it and not be disheartened by rejections or unsuccessful applications, because you will get some of them. That’s normal. It’s hard to put a precise figure on it, but if you get one successful response to eight or nine applications, you’re probably doing OK. It’s good to look for professional advice from companies like LynxPro.
It’s also worth making a concerted effort to pitch for business, developing a social media presence with extras such as blogs, podcasts and client testimonials, and making sure that presence gets seen by potential hieres. It’s not an overwhelming task and there are lots of guides and facilities to help you through it, but you have to factor in the time it will take and commit to doing it.
The next question is how to set your prices. A little bit of asking around and research, both word-of-mouth and online, would give you a reasonable idea of what you can charge hourly for your particular specialisation – and by the way, we strongly recommend that you do settle on a specialisation, rather than being a Jack of all trades. But once you have that idea of charges in your mind, you’re then faced with a dilemma over whether to stick to them through thick and thin, or whether you’re prepared to lower them. In the early stages, we’re strongly in favour of the second, more flexible attitude.
In fact we’d even suggest backing it with a money back guarantee if the client isn’t happy. Of course, this could spark a concern that the client may take unfair advantage of it, but in our experience it’s something that rarely happens. Having said that, if your instincts lead you to believe that you’re being offered work by a less than trustworthy employer, trust your gut and say no. Always look for the help of specialists to guide you on finding good contracts.
The time to start raising your prices is when you’re working at full capacity. You’ll know when that time has come. When it does, you can start estimating on a higher level for new clients, although your legacy clients may not be so happy to accept a new tariff. That’s a question of diplomacy, another facet you’ll need to develop. Undertaking contract work allows you to build business contacts and if a client likes your work they will be happy to hire you again or recommend you.
One last crucial thing, when leaving the full-time workforce to temporary/freelance is that your income doesn’t come so regularly. You will be getting considerably more money but it’s not uncommon to wait some weeks to be paid for a contract. This means that you need to be aware and prepare your cashflow.
To this end, we strongly urge you to prioritise setting money aside for income tax and national insurance. The old saying that there are only two inevitable things in life – death and taxes – is 100% true. One day, you will have to pay those dues. So always make sure you have the funds for them. If you don’t have time or experience to attend to them, you really should consider employing an accountant or book keeper to help you. Another option is to use an umbrella company that can help you with everything related to your contracts.
Balanced against it are the facts that you do have your freedom, which is a precious thing, plus the potential to increase your earnings and the immense, invaluable satisfaction that comes with the knowledge that you built this yourself.
Good luck and count on us!