Contracting is a work model where you "lease" your skills to a company in exchange for a salary. You’re hired to do a specific job or project for a limited amount of time. Because you’re not an employee of the organization, your compensation is different.
For the most part, contractors find work in one of two ways: They work with an agency that finds projects and clients, and are paid a portion of the fee the agency earns. Or, they work their own channels, in which case they receive 100 percent of the negotiated fee. While contractors don’t get benefits like health insurance, retirement savings, vacation or sick pay, they do have flexibility, freedom from office politics, and larger earnings.
To succeed as a contractor, you need the right skills and temperament. You have to look beyond your technical strengths and weaknesses to understand what makes you tick. You need a realistic view of your people and marketing skills, in addition to your technical knowledge base. In addition, you have to understand the market and how you fit into the world of work.
To help determine whether you’d be happy – and successful – as a contractor, ask yourself these questions:
Can I manage an inconsistent flow of income?
As a contractor, there will be income fluctuations depending on the flow of the work. It is very important that you have good budgeting skills and are able to account for boom and bust periods. If you are someone who can handle an inconsistent income stream, you will be able to handle contract work better than if you prefer the same paycheck every two weeks.
Additionally, when looking for work and setting your fees, you will need to account for more than just the actual hours you are performing a given task for a company. You will not be paid for vacation time, sick time, bank holidays or time looking for your next assignment. You need to account for this time yourself, and figure these blocks of time into your rates.
Finally, you will need to have a broad lens when looking at billable hours. Many people don’t make time to network, as they see it as competing against billable hours. However, if you don’t take the time to continue to build your network of contacts, when your contract is over, you may find yourself without a next job and no income.
The bottom line: You have to balance time working with time looking for work, and factor both of these into your fees.
How good are my marketing and communication skills?
You have to be comfortable with self-promotion. You must be able to promote yourself, to communicate to others what you’ve accomplished, and get them to understand your value.You need to look closely at what skills you possess or can develop beyond your technical knowledge that will allow you to communicate comfortably with others.
You have to be comfortable selling the product "you" to others. You must utilize the same skills to market yourself that you would use to promote a company’s product or service. However, you are now the entire company performing all of the marketing functions.
The bottom line: You are your own marketing firm.
What is my marketability?
Often, people both under- and overestimate their abilities. In today’s marketplace, it’s important to have a realistic view, to understand what technology is hot and which companies are using it. It is helpful to get honest feedback from friends and colleagues about the compatibility of your skills and work style with the current state of the industry.
A careful analysis of how you fit into the needs of the industry will allow you to see if there are areas you need to improve to make yourself competitive with the marketplace.
The bottom line: Know your skill set, and be prepared to add to it.
Do I take initiative?
Contractors need a mindset of initiative, perseverance, and determination. In many ways, you need to be in constant job search mode. You have to be willing to go to networking groups, stay connected to other people in your industry, and remain knowledgeable about the news within your industry.
Additionally, you must be in charge of your own learning and development.You will be expected to be independent, self-motivated and self taught at work. Companies will want you to learn on your own time and they will not invest in your training and development.
The bottom line: You are always running your own job search.
What motivates me to do good work?
If you command a high enough wage to cover your benefits and account for time spent looking for work, you can make a good living as a consultant. However, other factors besides money might motivate you, such as avoiding crazy bosses and office politics. Or, time flexibility, or the excitement that comes from being exposed to many different environments, industries, technologies and people.
Since you won’t have performance reviews, validation for a job well done has to come from your own personal satisfaction that you’re doing good work and making the right trade-offs.
The bottom line: Your satisfaction needs to come from within.
Do I have decent time management skills?
You need to balance your time working with time off. You need to build in time to network for future jobs as well as make time for ongoing training and development. Ask yourself if you are someone who may have difficulty working from home. Can you buckle down and structure your time well, or will you get distracted by watching TV, surfing the internet, or texting friends?
The bottom line: You’ll need to crack the whip on yourself.
How important is it to me to have colleagues?
You aren’t part of the company or part of an ongoing team. For many, contracting can be lonely, especially if you are someone who needs connection with others. However, if your self-esteem comes from getting the technical aspect of the job done – as opposed to being social and connecting with others – you will be better off. Ultimately, you need a thick skin, and you can’t worry if people like you or donÂ¿t like you.
The bottom line: You’re a hired gun, not one of the townspeople.
How do I view my contributions?
Do you need to see projects through to completion or is it enough to know your individual contribution was well done? As a contractor, you will be working on one piece of a larger project. You most likely will not have a say in the development, nor see the people use the code you wrote.You probably will be working on term projects, and won’t see a them through to fulfillment.
The bottom line: You need to be happy with only pieces of the puzzle.
Can I tolerate ambiguity and risk?
Are you the kind of person who’s willing to live with a level of uncertainty? As a contractor, you rely solely on yourself. You have much more flexibility and freedom, but you are on your own. When you are an employee, there is a larger entity that supplies support and a degree of predictability.
If you have a family, are they capable of supporting you through the ups and downs of contract work? Can you ride out the slow times with a degree of calm and certainty?
The bottom line: Can you survive hard times?
What environment do I do my best work in?
Are you energized by the kind of risk, change and undefined rules you would find working for a start-up – or do you prefer stability and structure? Do you want to work as part of a problem-solving team, or do you want to be independent? Do you need the buzz of an office environment or the ease of working from home? By identifying the work structures that support or stifle you, you’ll be able to seek out opportunities that allow you to be most productive and happy.
The bottom line: Are you looking for security or adventure?
Do I have good negotiating skills?
Negotiating is often difficult for people. It’s one thing to know what you want, but it’s another thing to ask for it. From childhood, people have been conditioned not to be greedy or pushy. You may fear that if you ask for too much, a company won’t want you. If you’ve done your homework, know your value and the going rate for the type of work you do, negotiating will be much easier.
The bottom line: You need to ask for value to receive it.
Contracting is a complex work commitment with its own pluses and minuses. By taking an inventory of yourself beforehand, you will be going in with your eyes open and you will have a better chance of success.