Being the expert you’d pay for yourself
As a contractor, you are your own boss and, especially as you gain more experience, you get a greater choice in who you work for and earn more money than you would as an employee doing an equivalent job.
And there’s a reason for that – any company that gives you a contract does so because they don’t have a particular skill or the right member of staff. They need an expert, and that expert is you.
The best advice here is to not forget that you are an expert in your field – it will give you greater job satisfaction, and the confidence it gives will help you negotiate higher prices.
Getting paid what you’re worth
A higher take-home pay compared to being an employee is one of the biggest reasons for being a contractor. As an expert (see previous tip) you want to get paid what you’re worth.
Understanding the value you can bring to businesses is one of the easiest ways to achieve higher earnings, as you will be in a better position to negotiate if you can explain why you’re worth the money.
Still, you shouldn’t go too far, asking for more and more money, or you’ll scare clients away and then you’ll be earning even less money.
Have a look at other contractors in your market. How much are they charging in relation to their skill and experience levels? Use your research as a benchmark to setting your own fees.
Money doesn’t grow on trees
As an employee, the business you work for pays and provides you with any equipment you need. You probably won’t think much of it if they provide you with a new phone, for example.
It’s a lot different when you start contracting – usually, the business you run and you as an individual are one and the same.
So you’ll have to think carefully about any money you spend – if you spend more money than you earn, you’ll not only be putting the business at risk, but you also risk not being able to pay the rent or put food on the table.
Keep a diary
This isn’t about writing down your deepest, darkest secrets. It’s much more boring than that. As a contractor, especially once you’ve been around awhile and are getting multiple projects to complete simultaneously, it can be easy to forget what piece of work you have to do and when.
Write all your projects down in a diary, making a note of when you got the job and when it’s due. You could even break each project down into multiple steps, making it easier to work on different projects simultaneously, doing a bit here, another little bit there, and so on.
Listen to your gut
You can do all the internet reading and research on running a contracting business you want, but there are still plenty of situations where that isn’t going to work and you’ll have to rely on trusting your instincts.
For example, in the early days of contracting when you’re still struggling to find your first clients, you might get a contract offer that initially sounds amazing – a really fun job that’s well paid – but there’s something not quite right about the client. Maybe you think he’s hiding something from you, or you get the feeling you’ll do the work but never get paid.
You should listen to your gut and trust your instincts, especially when it comes to working with clients you do not trust.
When you start contracting, you can find useful information on the web, sites such as contracteye.co.uk which provide useful information and guidance on contracting and freelancers.
Shoaib Aslam is the co-founder of Pearl Chartered Accountants, a UK-based chartered accountancy firm that has multiple locations across London. They are experts in helping startups and established businesses with all aspects of growth, strategy, scaling up, accounting and tax planning.