Budgeting as a first time contractor

26th October 2017

Article written by:

Chris from iContract

When starting out as a contractor, despite the high day rates contractors can enjoy with their work, it might be a while before you’re fully on your feet financially. Naturally you’ll have to tighten your purse strings a little and budget carefully.

Of course the overall cost of setting up as a contractor can be pricey as it can be the equivalent of setting up your own business. There’s general admin and running costs, marketing costs, and equipment purchases, not to mention the various insurance policies you have to take out.

Fear not though, there are numerous smart ways that can help you count your pennies so the pounds will take care of themselves. Here’s some good starter points to help you budget more effectively as a contractor.

Keep it simple

Some initial costs (that of course can potentially be deductible down the line) for starting up as a contractor can be a business phone, a platform for advertising your service, business cards, and so forth. Think smartly about these, for instance, you’ll want to keep your personal and business phone lines separate. For a new phone, go with the most basic package you can find – do you need internet at this stage? Don’t shell out unnecessary money on a shiny new handset as it might not be worth it.

When marketing yourself, again the key is to think simple and cost-effective. Don’t invest a great deal of money into developing a website from someone else. Although they are a professional, their services will be costly and it might not even be the final product you want, and could cost you more to amend things. There are plenty of good web platforms that are easy to use which can set you up with a basic website to begin with, and of course a number of free profile led platforms such as iContract from which you can market yourself from.

Make your office adaptable, and what you need…not what you want

Contracting can take you all places with your work – one week you’re working out of a plush office in the City, next you’re working remotely from home, or within the hustle and bustle of a cafe abroad.

That means your office can be anywhere your work takes you, and with that you’ll need to ensure your office is adaptable to this. A home office is a necessity at times but only needs to be filled with the very basics of what you need. For equipment, look at clearance sales and see what bargains you can get. A printer for example, only needs to deliver well on its core function, printing! Everything you buy, always question whether you truly need it at this stage in your contracting career and whether you think you’re getting a good price for it.

Find out what’s deductable

If you’re starting out as a contractor, it’s perfectly understandable to not be clued up on a few things and be slightly wet behind the ears when it comes to general knowledge about the contracting industry. You may not know that there are certain things that can be tax deductible, travel expenses for instance, and it pays to have a good accountancy provider who can advise you on these things, and to hold on to everything that you can account for, even if you’re uncertain.

Shop around

Shopping around is a general rule of thumb for most things you’ll deal with as a contractor, but it pays to shop smartly for things such as insurance providers, accountants or mortgage providers.. There are a number of service providers for the contractor community that can work with your budget and look to provide a tailored service to you, and aren’t simply just interested in winning you as a client. There’s a great deal of support and co-operation within the contractor community and it pays to look into them.

If you’re starting out as a first time contractor, why not give iContract a try? A free platform for contractors where you can advocate your services online and reach out to contractor peers for support and advice, as well as connect with recruiters and employers for the latest contract opportunities in finance, legal and tech.