Working as a contractor can offer a wide range of benefits. Not only do you get to pick and choose the projects you work on and take breaks whenever needed, but you’ll benefit from being self-employed, charging higher hourly rates than standard workers, and your earnings potential is substantially higher. But it’s not always plain sailing – below, we’ve rounded up some of the things you need to take into consideration before you enter into contracting.
Your finances and pay
Perhaps the most important thing to bear in mind is that working as a freelancer is very different from working as an employee of a company. You might decide to go self-employed, incorporate a limited company, or work under an umbrella contracting company to enjoy the benefits of PAYE and the benefits of being self-employed. Weigh up the pros and cons of each, and remember that you can change your financial setup as your business evolves.
Insurance and memberships
If you’re working for yourself, you’ll need to think about insurance and memberships. Some umbrella companies include liability insurance as part of your fee, whereas if you decide to work self-employed or under a limited company, you’ll need to think about the policy you’ll need to take out to win contracts. Speak with companies you’re working with for advice.
Saving and retirement
When you’re self-employed, you won’t necessarily be saving or paying into a retirement fund as you would be if you were employed by a company. Think about your future and set up a personal pension as soon as you can, and set clear savings goals so you have money set aside for a rainy day. The last thing you want to happen is to run dry and struggle to get by until your next contract; always be on the ball and have a few months’ salary put to one side.
Finding your next client
Next up, how are you going to find your next client? It’s all well and good signing yourself into a six-month contract with a business, but once that’s up, you’ll need to find your next job as soon as possible. Think about joining a recruitment or contractor agency, or doing it on your own by attending networking events and using sites like LinkedIn to find opportunities.
Managing your workload
Finally, think about how you’re going to manage your workload. Without a boss hanging over you, knowing what to work on and when to work can be tough. Though you’ll be tempted to work every day of the week to maximise your income, you should set aside time off so you can relax and unwind with your family. It’s important for your mental health and your ability to work at your best when you’re on site. If you struggle to wind down, turn off your computer and make every Sunday your rest day, heading to the gym and catching up on TV shows.
There’s no denying that moving from self-employment to contracting is challenging, but with the right strategy, you’ll adapt in no time. Whatever your circumstances, we wish you luck!