By Martin Nash
Freelancing or contracting, whichever one you prefer to call it, can be a wonderful, freeing way to work. It provides you with more flexibility as well as more control over how and when you work, and more variety in what you work on. It means you are your own boss! So this also means you have more responsibility over things such as managing your own time, handling your own income related taxes and charges, ensuring you are compliant and making sure you deliver on work that you have committed to.
In this guest post by seasoned contractor Martin Nash, he takes us through his experiences as a contractor and what he feels are the Pros and Cons of contracting to help you start exploring whether contracting would be right for you.
What is contracting?
Contracting is different from freelancing in that you tend to work for one or a much smaller number of clients at a time, applying your trade to deliver a specific project or fill a temporary need in a business. Contracting seems more popular in the IT, Accounting or Project Management roles, but can apply to any role.
Typically, your time or effort is tracked, and payment is made via Invoicing. In the UK contractors usually are sole traders (often the arena Freelancers operate in), work under Umbrella Corporations (called PSC’s in the UK) or running their own Limited Company. There are pros and cons to each, with more information available on each than I can cover here.
What are the pros of contracting?
I run my own Limited Company. This means (not exhaustive):
- I am my own boss and can control all aspects of my business.
- You can control the type of work you want to do.
- I can work as much or as little as I want to enjoy a better work/life balance (with some conditions, see cons).
- I can allow for things that I may have had to fight for (or grumble about) in previous permanent roles, such as having money for training, taking time out to attend conferences, have the appropriate equipment to do my role or enjoy the benefits I want (such as private medical insurance)
- The option is there to grow my business as much or as little as I want.
- You will learn more than you ever would in a permanent role; often, no two roles are the same, and the challenges are different enough to keep the work ‘fresh’.
What are the cons of contracting?
Contracting isn’t for the faint of heart. There are several things to be aware of when moving into this style of work. Again, not exhaustive:
- First, you need skills that are in demand in the contracting market. A search on the Internet will quickly show the skills in demand.
- While remote working is becoming more acceptable every day, you may need to travel to get the contract you want.
- Often (particularly in IT), work is done in bursts; you end up doing long hours to deliver to tight timescales and then have periods between work or roles. Being disciplined with your finances to ensure you are covered between roles is essential.
- Sometimes a role isn’t 9-5, particularly if you are working with people or doing work for organisations in different time zones. Flexibility may be needed to deliver.
- You need to hit the ground running so be prepared to start delivering value from day one with little or no grace-period
- You may need to upskill rapidly on new technology to provide benefits, often researching or testing in your own time.
- You are responsible for your own time, including holiday and sickness. It is easy to get caught up in working every day in a contract so you don’t miss out on a day’s pay, to then have your contract extended and then repeating the cycle. Before you know it, you may have worked months without any real time off. Burn out is real.
What work have you done through contracting?
I’ve been contracting since mid-2016. In that time, I’ve worked for some very well known organisations and done some fantastic things that I would never have been able to do, had I stayed in a permanent role.
- Designed and delivered a complete IT infrastructure, exactly to need, while also managing the budget, managing the communication, any migration activities and then carrying out knowledge transfer to the onsite IT team.
- Helped get people quickly working across a complicated IT organisation following a huge merger.
- Worked on projects involving people and sites all across the world, working in virtual teams, delivering in Australia, China, India, Germany, France, UK, South Africa and North and South America
- Designed, delivered and handed over a brand new cloud-only service to meet an immediate need.
- Helped control licensing to save the organisation significant money every month.
- Designed, planned and moved data centres.
- Worked in Silicon Valley in the US to help set up the IT infrastructure in a brand new regional headquarters.
Is contracting right for you?
Where I am at the moment; contracting and running my own business, focusing on the technical rather than management, works for me, things may change in six months. That is one of the benefits of running your own business; you have flexibility.
On contracting, I have worked with people who have been contracting for twenty years and would never consider going back to a permanent role. I have also worked with people who have tried contracting for six months to two years who found this style of work too much and moved back to a permanent role. It can be both empowering and financially beneficial while also introducing worries about where and when your next role will be or making keeping your skills current an essential aspect of your life.
If you are interested in contracting*, you want to minimise the amount of time needed to run your business and focus on generating the cash using your skills. The best advice towards this end is, select a good accountant. I can recommend the ones I use if you operate in the UK (message me for more information) who can help with the speciality skills of running the finances and handling tax and compliance, leaving you to manage the aspects you are good at.
(* Note: if you are operating in the UK, there are new changes planned in early 2020 which may significantly impact the tax rules around contracting, so investigate thoroughly and seek legal advice if you need to before making the move.)
Martin is an IT professional with 20+ years’ experience within IT Technical Change and running of infrastructure! As a contractor, his work covers architecture, design, project management, technical delivery, communication & training, with a focus on security and industry best practices. You can follow Martin for more tips and updates on Twitter at @mjn_it or visit mjn-it.com!