In Part One last week we covered establishing your area of expertise, your location, and knowing what you’re worth.
Here we look at other factors that you need to consider when you take your first steps as a contractor.
Be willing to travel
If your family commitments allow for it, and you’re always up for exploring a new place, contract positions that require out-of-town travel can be very lucrative. It can be tiring living out of a suitcase, but if you can look past that, travelling for work can be a great way to see different cities or even different countries.
In addition to your hourly rate or project fee, you may qualify for a tax-exempt hourly per diem that covers your daily food, phone, Internet and transport costs while you’re away. In addition, you should also be compensated for time spent travelling – in some cases you’ll even be paid to enjoy a beverage in the airport business lounge.
Get the right the tools for the job
Your full-time employer might cover your phone, laptop, desktop computer, photocopier, scanner and even some of your work clothing, but if you’re a contractor, you’ll have to be prepared to foot all of this yourself. Some contracting gigs, such as maternity leave cover, will have everything set up for you, but others may only provide desk space, with you bringing in your own laptop.
Almost every job will require you to be contactable via phone and email, and when signing contracts, you’ll probably need to scan in signatures, so make sure all of your devices are in good working order, ready to jump into a role at moment’s notice. You might not have the guaranteed cash flow when you start out, but it will look very amateurish if your mobile phone runs out of credit on your first day and you are unable to return your client’s phone call.
The same goes for dodgy home Internet connections if you are not going to be heading into the office. Update your computer settings, upgrade your phone, switch to a more reliable Internet provider and maybe even buy a new printer-scanner if you think you’ll need one. Think of everything that could possibly go wrong with your technology, and provide a trouble-shooting solution, before you take on your first job.
So you’re on the cusp of telling your friends and business contacts that you are now contracting. How are you going to make sure that all those recommendations that are flying around translate to business?
There’s nothing worse than missing out on a great opportunity just because you didn’t check your voicemail or email. When the requests do come in, you’ll have to make sure you respond quickly, and arrange your schedule to fit in with the client’s if they ask to meet face-to-face.
You also need your prospective employers to be able to find you as soon as they realise they need to hire a contractor in your area of expertise. As well as updating your iContract profile, make sure your online profile across all social channels is clean and up to date. For more information on making the most of social media to secure contracts, please see the iContract social media guide.
It’s still worth printing a stack of new business cards and delivering these to your former colleagues and managers when you decide to pursue the contracting path. Keep a few on you at all times in case you meet someone who might need your services and you can also send introductory letters to people in the industry who are likely to employ contractors in your sector with your card attached.
Hire an accountant (and maybe even a PA)
There are so many great things about being your own boss, but the downside is that you don’t have the regular income and employee benefits (like holiday pay and insurance) of full-time employment. You also have to do your own tax, which is no simple task when there are tricks to declaring salary versus dividends against professional expenses in order to avoid being lumped with more tax than is necessary.
See iContract’s guide, Financial Matters, for more on managing your taxes.
When you’re busy servicing your clients, the last thing you want to be doing is staying up all night sorting out your accounts in time for the taxman, or worse, missing tax deadlines and then finding yourself on the wrong side of the law.
Unless you are naturally organised and are skilled in accounting, legal and tax matters, you need to appoint the right people to manage these for you, and establish a flow before the work starts pouring in.