How to know if contracting is right for you
Contracting may sound scary, but for many it can have a wealth of benefits including a better work/life balance and financial freedom. If you are looking to escape the nine-to-five and have a skill that is highly sought after, then contracting could be for you.
Here are five qualities every budding contractor needs to make it a success when going self-employed…
You’ll be disciplined
One of the most appealing reasons for becoming a contractor is that you get to be your own boss, and while the thought of having no one to answer to sounds like bliss, this does mean you need to be strict with yourself.
Many contractors work from home or remotely from the organisation they are contracting for. You only have yourself to rely on so you must be motivated and driven to get the work done. If you’re someone who is super organised and happy working independently then contracting would work well for you.
Once you get into the habit of setting your own working hours to suit your lifestyle, then being your own boss is incredibly liberating and gives you the time to enjoy life the way you want to.
You’ll be a go-getter
While being organised is important, the work isn’t going to just fall into your lap, so you need to be motivated to go out and seek new contracts to keep the work coming in. Be prepared for rejection and dry spells – it happens to every contractor, which is why it is important to stay positive and calm when you hit a bump in the road.
They say your second contract is the hardest to find, so if you’re new to contracting don’t be disheartened if you’re struggling to find work. As with anything, practise makes perfect, so the longer you’ve been in the game, the easier it will become to know how to find new contracts to keep your business growing.
You’ll be financially prepared
That being said, should work dry up it’s recommended that you have a contingency plan in place to tide you over. If you’re taking the plunge into full time contracting then it is advised you have around 6 months worth of savings in the bank to help pay the bills should you have any gaps between work.
Remember, as you are not an employee of anyone, you won’t be entitled to holiday leave or sick pay (if you are, this may indicate you are working inside IR35. Find out what this means, here), so as a contractor, you need to keep some savings behind for those times when you’re not working.
You’ll be flexible
You’re leaving the nine-to-five grind for a reason, and this means you can pretty much work whenever you want. So if you’re an early riser you can get up and get your work done then enjoy the rest of your day. Or, if you’re a night owl, you’ll finally be able to have those much-needed lie-ins.
Contractors may often work anti-social hours should a deadline be approaching or if you have a client in a different time zone, and it can be easy to fall into the trap of always working. It’s important to be flexible but make sure you give yourself regular breaks and plan your time well to really create the work/life balance you desire.
You’ll be adaptable
The beauty of contracting is the wealth of experience you can gather. By moving from contract to contract, you have the opportunity to build a varied portfolio that will only make you more employable as you continue to build your business.
Be open to new contracts and projects that may be a little different from what you’re used to. Once you’re in a stable position, you don’t have to base all your contract decisions on money, so if you come across an opportunity that will look great on your CV, that can be much more beneficial to your business in the long run compared to taking similar contracts offering slightly more remuneration. Once again, as a contractor, the choice it totally down to you!
What else is there to consider?
You’ll need to decide whether you want to operate as a Sole Trader, Limited Company, or under an Umbrella company. There are lots of factors to consider when starting out as a contractor, but trading as a Limited Company is the most common route for a number of reasons. If you’re unsure, you can read our guide to venturing into contracting for a deeper understanding of the factors you’ll need to consider.
If you’re ready to take the leap as a Limited Company contractor, then our team of specialist contractor accountants can help you set up your business in no time. We offer a fully comprehensive service at Intouch Accounting, and you’ll have a personal accountant on hand to provide you with all the support and guidance you need, along with unlimited IR35 advice, so you’ll never have to worry about being on the wrong side of the tax man.
Give us a call today on 01202 069535 or get in touch via our website and we’ll be happy to help.
This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.