When it comes to contracting as a career path, there can be as many benefits as there are pitfalls. Though on the plus side you get to call the shots, be your own boss and have a better work-life balance than many full-time peers, your relative lack of employment benefits and job stability will be off-putting for some. That said, if you’ve weighed the pros against the cons and came to the conclusion that you do want to kick-start a career as a full-time contractor, you do want to be smart about it.
Make no mistake: the life of a contractor is not automatically easy street. There will be challenges ahead, and you should fully understand and prepare for all aspects of entrepreneurship in order to avoid unpleasant surprises down the road. Here’s a check-list to get started.
1. Get your financing in place
When transiting to contracting work from a full-time job, the first thing that ceases to exist is a steady income. So before you officially begin your journey as a contractor, figure out your finances.
From accounting and finance to project management and technical support, there are a dozen different types of contractors out there, and all of them have different financing needs. If you are looking to be an architect for hire, there is very specific software you’ll need to purchase, which are likely going to cost hundreds, if not thousands of dollars.
Next, you have to think about business and personal expenses. Even if you already have a steady stream of clients, it can be months before you get paid. As such, it’s important to perform a complete review of your finances and estimate your needs and costs as closely as possible.
Personally, as a contract editor, financing is not as big an issue. I can essentially run a home-based consulting business with a laptop, a mobile phone and an active WiFi connection. Yet even then, there’s some specific software I need in order to get my business up and running, such as basic transcription tools like Simon Says or invoicing apps like Invoice Simple. While software and services don’t cost as much as other professional tools, it’s an investment nonetheless.
2. Make it official
Even after your finances have been reviewed and sorted out, you’re not quite ready to open your doors to business just yet. The next thing you want to do is to decide how your business will be legally structured. You want to make a call on whether the business needs to be incorporated, or if you want to be a sole proprietor — and this applies even if you are a one-person concern.
There are pros and cons for each option depending on the country, but the basics are similar: incorporating your business means that you might be eligible for financing and government programmes. Some larger corporations will only hire incorporated contractors, thus giving you a leg up. On the other hand, a sole proprietorship means you have 100% ownership, the hours are based on your schedule, and taxes and accounting are often more streamlined.
3. Be your own accountant
Part of being a contractor, at least at the beginning, is to handle your own bookkeeping. Unlike a full-time position, where there’s someone to do the paperwork for you, this is something you want to learn as early as possible.
To get you started, there is affordable cloud-based accounting software to help track everything from invoicing and expenses to report generation. Some even have mobile versions of the applications, so you can keep track of your finances on the go.
However, if you want to save a bit of money, that’s not impossible either. Since you are your own accountant, you want to develop a habit of safekeeping everything, from invoices and expenses through to project briefs and contract agreements. Make sure everything is down in writing before, during and after a project. As a contractor, filing taxes can be a pain if you are not diligent with your bookkeeping. This then, will certainly come in handy when it’s tax season.
4. Market your business
When starting a new contracting business, a major hurdle to cross is usually securing the first wave of paying customers. If you are transitioning from a full-time job to contracting work within the same industry, you may have the advantage of having a solid foundation of clients who already know your work. Even if they don’t necessarily require your services right away, at least you won’t have to convince them from scratch when they do need your help.
If you’ve existing clients to work with, reach out to them instead – though do be mindful of not poaching business that’s already secured with your previous firm. Nothing will slow your momentum like unethical behaviour (or worse, a lawyer’s letter) from the get-go.
Ideally though, start with your friends, family and former business contacts: even if it means cold calling them to let them know you’re open to take on new contracts. Personally, I got in touch with former colleagues who had left the company, to take on full-time positions elsewhere. Just like former clients, former colleagues, too, can vouch for your work and might even supply you with jobs along the way. Don’t be to proud to ask.
Word of mouth is not the only way to get your name and new business out there. Here’s an example: I know a lot of professional photographers who left their full-time positions at studios to start businesses of their own. Many have two things in common: they have online portfolios that showcase their past works, as well as a strong social media presence.
I spoke to Ahmad Iskandar, a professional photographer and a good friend of mine who has been largely running a one-man show, Ahmad Iskandar Photography, for the last seven years. Aside from weddings, his clients include Maybank, OCBC, Time Out Singapore, as well as Commontown, a Singapore-based co-living start-up.
According to him, platforms like Instagram, Facebook or even LinkedIn are popular among fellow photographers because photography, by its very nature, is visual. “For many photographers, social media and websites are powerful publicity tools. In fact, they help to achieve far more outreach in terms of finding potential clients,” he explained. If it’s worth doing, consider paying a little to these sites to boost the views that your best pieces can achieve.
5. Maintain relationships, build networks
Contract work can sometimes feel transactional. Your relationship with the company lasts for as long as the signed contract stipulates. If it’s a four-month gig, then that is as long as the relationship typically lasts before you part ways.
For Ahmad, this has definitely not been the case. While he sees social media as a key tool to increasing reach, he says it took him several years to launch his online portfolio. Only from 2018 did he print a proper set of name cards for himself. “I guess I’m very traditional,” he notes. “Interactions with clients are very important to me. Behind every business is the people, and I believe that connections with people are more important than connections with the company. It doesn’t matter where they go in their careers, they will always remember you.”
Ahmad also goes the extra mile when it comes to building relationships. For example, as a wedding photographer, he sometimes create gift boxes, complete with letters filled with well wishes. “That way, during future big moments of their lives, they are more likely to have you along as part of their journeys.” Ahmad works closely with Singapore International Foundation, a Singapore-based non-profit organisation. “When I do projects with them, I try to help them cut cost if possible,” he revealed. “On one level, I find value and meaning in the work I do for them. On another level, they help connect me with other programmes that [need my services], and the network expands that way.”
6. Become a real specialist
As a contractor, the last thing you want at the end of a contract is to be seen as disposable. You want your lasting impression — or legacy, if you will — to be a valuable asset to the team. One way to do that is to keep looking for learning experiences: opportunities to learn new tools and technology, as well as ways to keep abreast of industry developments.
Begin by deciding on what you need to upskill, such as upcoming trends and complementary skills in your specific industry. For example, as a writer, one area that I am currently attempting, is to not only write good content, but also ideally, search-engine optimised (SEO) content as well. After all, there’s no point in writing digital content if Google is not going to add it to one of its search results. So aside from learning the latest in SEO development, I’ve also been working closely with our in-house website manager to understand how it works.
There are many other ways to skill up as well, but the point is to embrace learning on the job, asking questions about processes and procedures and showcasing your value to employers in order to stand out. That way, even if a contract extension doesn’t work out, you can take your newfound skills and apply it to the next one.
● Set a schedule — and stick to it: When the line between your work life and real life blurs, it is easy to lose track of where one ends and the other begins. To develop some discipline, it’s a good idea to keep to a daily timetable. For example, set aside three hours before lunch for work, then deal with your errands for the next two hours before resuming — and make sure to keep to that schedule. This is particularly important where family members, kids especially, are concerned.
● Stick to the mission: Whether it’s a short- or long-term career move, there is a reason you decided to resign your full-time position to become a contractor. During tough times especially, it is important to remind yourself why you decided to be your own boss in the first place. If work-life balance was your reason, you owe it to yourself to make a point of maintaining some semblance of work-life balance as a contractor. It is not always easy, but being overwhelmed with work defeats the purpose altogether.
● Don’t say ‘yes’ to everything: Speaking of being overwhelmed, it is often tempting as a contractor to say ‘yes’ to just about every job that comes your way, especially when you are trying to hit a critical mass of customers. Yet when the work becomes too much to bear (or something screams problematic) don’t be afraid to outsource some of it to fellow contractors; or politely say no thanks. Personally, I have cut my losses with a particular customer before because the project manager I worked with was unreasonable and toxic (plus a lousy paymaster). While it’s hard to cut ties like that, especially when you have finances to take care of, your long-term peace of mind is more important.
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