Should I Get Into Contracting?

Hey guys,


 


Ive been working as a design engineer for about 12 years now, I've worked at a few different companies from automotive to petro chem to green industry and I've used a fair few 3d systems.  I'd say I'm a pretty good engineer.


 


I can see how much more money can be made by contracting but am obviously apprehensive on becoming a contractor and all the extra responsibility that comes with that.. But I'm of the mindset of just do it man... But before I take Nike's advice.. I wondered if there were any guys on here that made the jump from permie to contracting and any tips or warnings?


 


Thanks!!!


 \m/(>.<)\m/ www.trucke.co.uk - my rockband!! \m/(>.<)\m/

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Comments

  • StevoStevo Upgrade in Progress
    I've been contracting as a software tester for about 4 years. I love it, I'd hate to go back to permanent employment!

    I wrote a post about contracting here: http://www.thatstevenbaker.com/intro-to-working-as-an-independent-contractor/


    Here are a few lessons I learnt the hard way:

    - calculate annual pay at 46 weeks, not 52 to allow for holiday time, public holidays, sick time etc.

    - save 3 months of living expenses and put the cash aside

    - set aside money for training yourself in new skills

    - see a good accountant!

    - learn some negotiation skills


    It's made a huge difference to my family's life, but it's not for everyone. I'll try to think of some more tips.
  • Stevo has some good points, here is my take on it. I am not a contractor but my brother switched to it doing computer programming.


     


    First why do you want to become a contractor? Do you want to challenge yourself more? Make more money? More freedom?


     


    Because with those things come some negatives. You may be without coverage for health care, prescriptions, dental, glasses all of those things that come with an employer who covers your health care costs. I see you are in the UK so I don't know if that applies to you but it might.


     


    You may make a lot more money, but you will also now have a lot more expenses. Insurance, health care, purchasing things for your business. But at the same time you can write a lot of this off as an expense, same thing with your mortgage if you work out of your house.


     


    Like stevo said, save money in case you are unable to work for awhile. I would even suggest 6 months salary banked in the bank, unless your wife has a good job that can carry you in case you are unable to work. 


     


    If you do not have life insurance go get it, in case you pass away you know your family will be okay.


     


    And remember a day not work is a day not paid. No pension, no savings from the company, all the good things a company can do for you is gone.


     


    However, there is a huge upside to working for yourself, you are in control of the jobs you want to take, you can negotiate your own salary. Work mostly when you want, if you have a deadline that has to be made, you have to work. If its a per job basis, you can work hard and get it done early. However it may be harder then expected so you may end up working more hours.  And remember customers always change there mind, so be ready to deal with them and cater to their needs, even if you think they are wrong. They are paying you.


     


    So hopefully some of this made sense and helped.


  • StevoStevo Upgrade in Progress

    Some good points. I see you're in the UK, so medically you're probably fine (assuming the NHS counts as fine ;-)) Even private medical from Bupa is only like 40pounds per month.


     


    You will have to get over the fact that a day off is a day unpaid. I went to a friend's wedding in New Zealand for a week trip and I made the mistake of calculating how much I didn't earn while I was away as part of the trip. It can lead to you never doing anything and some people get too obsessed with it and work 7 days a week! 


    Its a means to an end. For me, even if I went permanent again, its still project work, and what do companies do when they run out of projects for you to work on? They make you redundant. 


     


    I can earn > 50% more money for doing the same job, which I justify as I can have more time off between jobs and be no worse off financially.


  • Great advice guys thanks!!


     


    I realise the implications of taking days off will be unpaid, the monetary boost should more than likely take care of that.. We have the NHS so I'll be ok, its always been fine for me!


     


    The reason I want to become a contractor is: I feel like Im good enough now, I used to be like ugh what if I dont know what to do.. But Ive worked in enough places to realise its never that difficult, plus there's a ton of resource out there.. I also can see the huge difference in pay, which always helps.,. being in control of my own work and destiny really.  Most other things like dental I go private anyway so theres not much change all round in that respect.. I also want to work abroad say in Canada or the US, saving money from contracting will greatly help my chances and add to my experience to leverage this! 


     


    But yeah all looks positive so far, Im looking at setting up a LTD company with me as the director... Apparently this is the best way to avoid the dreaded UK IR35 tax laws in which they can tax you up to 30% if they think you are more like an employee for the company your contract is with more than a company.. Saying that Id still be much better off.


     \m/(>.<)\m/ www.trucke.co.uk - my rockband!! \m/(>.<)\m/

  • StevoStevo Upgrade in Progress

    I've recently written a follow-up article on lessons I've learnt: http://www.thatstevenbaker.com/lessons-from-a-contractor/


     


    Let me know what you think!

  • What happened to your other blog posts, Steveo?


  • StevoStevo Upgrade in Progress


    What happened to your other blog posts, Steveo?


    I've had a lot of downtime at work recently so everything's getting a bit of a makeover, sig included :-D they're still there, I'll bring them back soon.
  • StevoStevo Upgrade in Progress

    If anyone wants to get more tips on contracting, I have written a book about it: https://www.amazon.co.uk/101-Contracting-Tips-Experienced-Contractors/dp/1523862564/

  • RekaReka ✭✭✭


    If anyone wants to get more tips on contracting, I have written a book about it: https://www.amazon.co.uk/101-Contracting-Tips-Experienced-Contractors/dp/1523862564/




     


    Is it domain specific, like only for those in the technology field, or general?

    It doesn't get easier... It's you who gets better.

     

    Is your social worker in that horse?

     

    Success has a price, not a secret.

  • StevoStevo Upgrade in Progress
    It's pretty generic for anyone who works as a contractor / temp in an office environment (vs construction contractors)


    There are a few things that are UK specific but I'd say 90% of it is relevant to anywhere.
  • DManDMan Master of Arts ✭✭✭

    As an artist it can be quite a challenge. The term starving artist is because there are so many of them. For artists working in house seems often times better than doing freelance. There is a huge difference depending on where you live in terms of companies, pay rates and cost of living... Germany is super expensive and the gigs usually underpaid. If you are located in Bulgaria and work for the next big Hollywood Blockbusters it's like you are the king...


    May you be well, may you be happy, may you be healthy, may you be loved.

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