As a developer, there is lots of demand. People will ask to hire you. Politely decline and offer to contract. Eventually someone will accept. Then when they want to hire you, politely decline again. Eventually they may even offer to hire you at a fair salary, which you may choose to accept.
Keep in mind you need to be more than a developer. You are now a professional with a private business, and you need to act that way. You need to be your own boss, be accountable, communicate well, and hold yourself to a high standard.
If you are a cave dwelling developer who's bitter about managers and non-technical people, you should probably stick with your salaried job.
I can't understand how a competent, experienced developer with basic communication skills would have trouble finding contract work once they start looking. That said, I've encountered plenty of incompetent or obviously lying developers looking for contract work. If that's you, keep working until you are competent and don't have to lie.
If you are a developer, your friends should at least know that you are a developer. Start from there. Giving talks at meetup groups is also a huge plus. I think a key thing is that people need to know you do or are at least looking for contract work. If your goal is to find contract work, I highly suggest your linkedin profile list your job title as Freelance Software Developer or something similar if your primary job doesn't monitor your linkedin profiles.
Frankly this is just negative self talk and excuses.
Basic communication skills may not be enough, since you have to overcome the 'market of lemons'.
https://en.wikipedia.org/wiki/The_Market_for_Lemons
If there is a glut of bad developers (as you've observed), good developers will be penalised for that just the same - until clients are fully convinced that you are not one of the bad ones.
You've described a nice way to overcome that, but I don't think that is a straightforward process.
Keep in mind you need to be more than a developer.
Both very true. Also remember that as well as the being your own boss stuff, you are going to be running a business, and that incurs overheads in both time and money for which no-one is going to pay you directly any more. This is part of the reason that contract work is charged at a higher rate than salaried employment: the fully loaded cost of employing someone in the UK is maybe double their salary and as the contractor you're now going to be taking on a lot of that burden directly. There is a lot more flexibility in how you price your services as a contractor, but whatever you do, don't make the mistake of trying to translate salary directly into some sort of hourly/daily/weekly rate.
Also, if you're going to do contract work in the UK, you should definitely learn a bit about tax and employment law and in particular IR35. The latter is a tax rule designed specifically to demonstrate how apparently reasonable ideas to fix apparently significant problems can in practice become bureaucratic nightmares that impose a significant burden on an entire industry and occasionally randomly destroy the careers of people who as far as they knew had done nothing wrong. There is a lot of fear-mongering about IR35, particularly from organisations that make money "protecting" you against it, but there is at least some risk here and you should understand it so you can make informed choices about it.
I got offered the job at the end of the interview and asked what salary i expected. I hadnt a god damned clue and just pulled £30k out my ass thinking that was a big ask even for London. In hindsight they probably would've given me £45k at least because they bit my arm off saying that they'd happily give me £30k with a raise of £5k in 1 year. I accepted and the HR person brought me the contract, i started reading and got to a section i didnt like. It basically said all code i produced both at the company and in my spare time would be owned by them, i asked them to remove it, they refused and i walked. BEST THING I EVER DID!
Coincidentally i had seen another job advert for a temporary gig elsewhere in London the day before on a job board. After refusing the offer at the first place at probably 11am, i walked to an internet cafe, phoned the advert, said i could be there that afternoon, traveled across London, interviewed at probably 1pm, got the offer at 3pm by phone, and started the next morning at £250 a day, which was stupid money at the time.
I've been a contractor since and that was 8 years ago, i now charge £400 a day and still do PHP work. PHP isnt cool, but i like it, it pays the bills and its in high demand and ive got a pretty nice portfolio.
Good on you!
Ruby and Python contractors go for ~£500, Java, ~£600. You've got a pretty impressive portfolio, if demand really is high, you should be able to charge a good deal more. If the demand really isn't higher than £400, teach yourself Ruby and/or Python.
* Go to (and speak at) meetups involving technologies you work with. It's a great way to showcase your skills.
* Be charitable with your time. Be willing to meet people for coffee and provide free advice. These sort of meetings often directly or indirectly turn into work.
* Leave your company in good terms--they might use you as a contractor after you leave.
I would definitely recommend saving up 4-6 months of living expenses before quitting. It gives you some flexibility in setting your rate and selecting jobs.
- have a spreadsheet of income and outgoings and update it weekly ( really just download stmts from the bank works here). But go through it each time and see if you can cut something
- pay back your debt - know where it is, which is highest interest etx
- sell stuff - declutger a lot
After two months you will feel in control and it will be a habit
Maybe that's a sign that contracting is not for those people.
Even if you're lucky, and you land a stable, long-term gig within say a month of leaving your previous job and actually get paid according to your 30 day terms, you're still looking at living off savings for a couple of months. If that client, however honest and well-intentioned, turns out to be financially insecure and fails two weeks after your first invoice goes in, you're probably just another unsecured creditor who may not get much if anything out of them, and you start the cycle again. Or you might have longer periods for your payment terms, particularly with the more lucrative larger clients. Or you might take a couple of months to find your first gig if you don't have much of a track record or network yet. Or...
If you don't have enough financial security to survive for a few months with no additional income, you should have no doubt that dropping a regular job to go freelance is a big risk. Of course sometimes risks pay off, and if you do land a well-paid gig quickly then once you've got an invoice or two under your belt you can probably build that missing safety net quickly too. But sometimes risks end in disaster, and if you've got kids to feed or a mortgage to pay or other important financial commitments then you'd be brave/foolish to make the jump without ensuring you have a plan B.
Edit: Also, I'm talking about working directly with clients here. What goes on with agencies or other intermediaries involved might be a different question.
Do you find direct clients from avenues other than word of mouth?
"Be charitable with your time. Be willing to meet people for coffee and provide free advice. These sort of meetings often directly or indirectly turn into work."
This is so true.
In 'Smarter Selling' by Keith Dugdale & David Lambert, which is mostly aimed at sales people, I took away one nugget (I'm paraphrasing here):
"Don't position yourself on just trying to sell something to the customer, because, they might be pressured and they'll eventually buy it. But they'll wait until the end of the contract and then go to somebody else.
Instead position yourself as somebody who is helping them and give them a real solution. The relationships that you build that way will take longer, but they will be the ones that will last a long time, where the client will keep coming back to you."
When I thought about it, I was doing this anyway, this just made it obvious.
One thing that I didn't see being brought up in the thread you mentioned is the fact that a recruitment agency bills a rate different to what I get payed. For example, my agency is likely billing out at $80/hour or more, yet I only get $55/hour.
So I'm curious if others were entering amounts that agencies were billing out, rather than what they were being payed.
Wait, what? Where are you? Please tell me you're a regular employee of the agency on paper, getting benefits and not paying self-employment tax?
Juniors on the other hand get pretty exploited in the name of "earning their stripes" - I've seen a few accounts over the years of billing at $80-150/hr and the employees getting $15-25/hr..
I think the local average for recruiters and agencies (usually one and the same here) is 15% of first-year wage for FT placements, or $30/hr margin for contract work.
If jetblackio is in California, he's getting ripped off (doubly so if he's a 1099 and/or pays any substantial amount for his health plan). If he's in Wisconsin or Canada, he's probably doing OK. If he's in a country that doesn't use a currency called "dollars" but he's incorrectly using the dollar sign anyway, that throws everything completely out of whack.
This is why I asked where he is.
I'm in Colorado and I do not get any benefits. The company I'm contracted to only works with this recruitment agency, so to get hired at all, I had to go through them. The agency obviously takes a cut, and from what I've gathered from some of the employees, the agency is taking around $80+/hour while my bill rate is $55/hour.
As I stated, there are no benefits, I pay my self-employment tax and have to cover my own medical expenses. There is no paid time off, holidays or otherwise.
I'm not sure if this is considered normal or not. But I don't really like the situation and have been working towards permanent employment with the company.
As a side note, this is a great company to work for, and employees have great benefits. But it does sound like contractors may be getting shafted.
FTE software engineers in Denver should be $80k minimum.
4 weeks vacation/sick time + 10 paid holidays, $80,000 + $9,230 = $89,230
Medical, $89,230 + $3600 = $92,830
Self-employment tax, $92,830 * 1.0765 = $99,931
That by itself calls for almost $50/hour. Add vision/dental, retirement plan, and whatever else regular employees get, plus the fact that you spend more time on your taxes, and do it throughout the year (you're remembering to pay quarterly estimated tax, right?).
Now, where's your risk compensation? The company is hiring contractors because they're easily disposable. You could be dropped at any moment.
Where's the compensation for the value of the flexibility you're providing the company?
Contracting as a 1099 calls for a 2x multiplier over nominal FTE rates. At least. You should be getting $80+/hour just for breathing.
And would you really only be worth an $80,000 salary? Just how junior are you?
You're right on the risk compensation, though this company is known for hiring contractors for long periods of time (some contractors here have been here longer than 5 years). So though it is a very real risk, I'm not as worried about it as I would be otherwise.
If you don't want to read my advice and just want my experience skip to the next section.
There's a reason contractors make more money; it's because it's a lot more work. The way I think of salaried employment is that it's an exchange. The salaried employee agrees to work for less than the market rate, and in exchange the employer agrees to subsidize your down time. In other words, you don't have to worry about constantly finding the next thing to do just to get paid. You get to focus on the work.
You'd be amazed how much work is involved contracting. You must go to networking events and startup meetups constantly for years in order to build up your identity. You must actually create your own portfolio website and keep it updated. You must keep your LinkedIn and Twitter profiles updated. You must do your taxes and send out W9s to each of your clients every year and follow up with them if they don't respond (and then talk with them more when they send you forms that don't match your records). You must meet with a lot of people and talk about their projects before figuring out that only 50% of them are even relevant to what you do, and of those maybe 50% actually get to the quote/estimate stage, and of those maybe 50% become paying contracts.
I'd say, when I was just contracting to support myself, maybe 50% of my time was billable; closer to 75% when I actually had a big contract that could keep me busy for a few months without worrying about lining something else up right away. So, if my billable rate was $100/hr, my effective rate was closer to $50-$75/hr. And then here in the US, taxes would take about 30%, so closer to $35-$45/hr.
On top of all that, you can never count on the work you have. You may have a need for X hours per week to sustain yourself, but that doesn't mean your clients will require X hours. They only need what they need. And being a contractor, what you need is officially not their problem. Of course, you could always work out deals with clients that guarantee X hours per week, but they'll only agree to it if they think they actually need more than that, and as soon as they stop needing it, they'll end the contract.
You could be living the high life with one awesome client, your bread and butter, for months or even years, and then suddenly wake up to an email saying they no longer need your services. Maybe the project they had you do is finished. Or they decided they were spending enough with you to justify a full-time employee to do it in-house. Or maybe the CEO of the company just found out his nephew does programming, and he can do it instead of you. Maybe their decision to cut you is a good decision for them. Or maybe it's a really bad decision that you can't prevent them from making. Doesn't matter. All that matters is that, as of this morning, you now have no paying work.
I could go on and on, as these are only the most pertinent warnings that come to mind. Hopefully I've sufficiently scared you. Cool. Now here's how I did it...
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First of all, I started contracting way before I needed to, just because it was fun, and it served as a way for me to get paid to learn how to do what I enjoyed and to become better. For years, I'd get up at 5 or 6am, go to work, come home around 5 or 6pm, make dinner, and work on my own projects until 2 or 3am. Having built your own projects is by far the best way to convince the first few clients to actually pay you (once you've done enough networking to meet them). I'd estimate I spent probably a couple thousand hours building my own projects, or building things in-kind for friends and family before getting someone to pay me straight up cash. I did this from the time I was a freshman in college to the time I was a senior (full-time student + job + side projects) before getting a paid contract I think, and then continued to do it for another year or so after college.
You may not have this problem if you're already salaried doing the same kind of work that you want to do contracting. I, however, was a mechanical and electrical engineer who wanted to build software. WIthout a relevant degree or official work experience, I had to teach myself and build stuff. After a few years building my own stuff, I also started doing a lot of open source work.
Eventually though, I had to start charging. This was hard. I started out, as anyone, low-balling some projects. Hopefully you only do that once or twice before you realize how unsustainable it is. Once I realized this, I started asking for more. I remember how guilty I felt at first, as I couldn't imagine that some site I could build would be work over $1,000 (!!!). It's actually funny to look back on it now, and realize how unsustainable even that was. I'm glad I listened to the advice or others at the time and didn't insist on such rates for long.
Like I said before, I continued to contract on the side, also spending tons of time grooming my own portfolio website, building side projects, working on open-source projects, and going to networking events (sometimes calling in my paid personal time to go to really good ones during the week), for several years.
I never considered quitting my job though until I knew I had enough work lined up to make the same amount I was currently making at my full-time engineering job. With student loans and whatnot, this wasn't really even an choice I could make. At times, it felt as though this would never happen. I couldn't conceive of a world where enough contract work existed that I could possibly line up. But I continued (I think this is where a love for what you do plays a strong role).
Eventually, through networking, I met someone who owned a web development company, and I discovered the world of sub-contracting. They had a lot of work and not enough people to do it. They wanted to hire me, but I knew I wanted to contract on my own. So we worked out a deal with me sub-contracting, and they could guarantee my at least 30 hours per week for the next 3 months. At our agreed upon rate, that was enough to beat what I was making as an engineer. I figured worst case was that I now had 3 months to find more work, and I put in my 2 week's notice. That was the scariest thing I had ever done (and in fact I wrote an article about it that became one of my first popular posts on HN at the time: http://www.alfajango.com/blog/if-youre-nervous-about-quittin...).
Once I was contracting full-time and setting my own schedule, I was able to kick my networking into high gear. Meanwhile, my new friend's company kept me on as a subcontractor beyond those few months. They actually ended up getting a big client that insisted after a couple months that I was the only one who could lead development of their project. Due to networking and word of mouth, I ended up getting a few clients of my own, one of which was big enough to sub-contract several developers myself. Thankfully by that time, I actually knew some developers who'd do it, developers whom I had met networking and working on open-source).
And the ball has been rolling ever since. I now own a company that builds startups full-time. We are a sort of CTO + dev team for hire; or a software-consultancy-meets-VC if you want to think about it that way.
It's much more awesome than my engineering job. So, I'm not saying don't set off on your own. Just that it's a lot of work, and that none of it is guaranteed to ever pay off. Right now, I'd say my team and I live comfortably, but it's still a lot of stress day-to-day. If I had taken all that time and effort that I spent to be able to contract on my own, and instead channeled it into getting a better job, I'd probably have a lot more money than I do now. But it wouldn't be what I wanted to be doing. That's the real reason to start contracting, for personal growth.
In other words, it takes a lot of work to build a lifestyle as a contractor. If you took all that effort and time, side projects and personal branding, and channeled it instead as leverage to find a better job, that'd probably be a much quicker path to making more money than contracting. So, I wouldn't contract for the money, I'd do it because it's what you feel like you must do to be happy.
EDIT: I should also note that, reading through some of the other comments that say "it's as simple as getting a client, going to meetups, etc." I was tempted to say that at first too. I sometimes forget how much time I spent going to meetups and building experience before any of this really started becoming "simple" for me. It's easy to look back on the past 9 years I've been doing this and forget how much work went into each actual year, or how long a year really is.
Contracting is basically a full time job, but you own the company, can claim expenses / equipment / etc, and otherwise, it works like a normal paid job. You dont, EVER, bid on jobs, you get hired for a set period. Companies like this as it's an _operational_ expense not a HR expense, and chances are, they have a hiring freeze :)
If you already have clients lined up where you can do work as or within a company without first freelancing, then you're probably not in HN asking how to do it.
Edit: also, many of the other comments here were, get a client, not speak to a recruiter, so this was somewhat a response to that add well.
In the UK, permanent salaries are very low compared to other english speaking markets. Several people (self included) mentioned contracting. This is distinct from freelancing in that it usually for a company running a project but in need of some specific skills for a fixed time at a daily rate, rather than asking you to make something for a fixed price.
I see them as distinct career paths, and I'm pretty sure the question was aimed at this.
I'm getting the feeling that rather like employees who've never considered going independent, there are quite a few people posting here who work as contractors in the sense you're describing (which I'm not saying is incorrect, just incomplete) and don't realise that there is a wider world where maybe other contractors don't work the same way.
I've never done freelance (at least, not as a complete replacement for a full-time job) but the logistics and hidden "Misc." work-hours of what you have to do besides the actual contract work falls into that dangerous "unknown unknowns" category of things that people like me fail to consider, so your lengthy post is extremely helpful.
Have you measured your performance at various levels of sleep? Supposedly feeling "rested" isn't even sufficient to guarantee full performance.
This may be correct in some cases, but it's not universally true.
1. Yes, there are a lot of things contractors must do that salaried employees don't, but activities like developing and maintaining a portfolio and invoicing don't have to be a drag if you set up efficient systems and processes.
2. Pricing strategy is really important. If you're seeking an hourly rate of, say, $120 but only 50% of your time is billable, you might want to consider the possibility that you'd net more by reducing your hourly rate. In a lot of cases, contractors who struggle with billable hours don't realize that trying to maximize the rate they can get one or two clients to pay will often minimize billable hours. With the right rate, you can attract more clients more easily, allowing you to diversify if you so choose. You will also find that clients want to send you more work instead of getting you in and out as quickly as possible.
3. You don't need to have an "identity" to get business. Unless you're trying to be the top gun for hire who bills $200/hour with no resistance or limit your work to the most interesting or cutting edge projects, there are plenty of opportunities out there that don't require you to be "known." If you have a solid portfolio of work, are responsive and can communicate well, you can acquire clients without a Coca-Cola like branding process.
4. The reason self-employment is criticized from a tax perspective is that most people don't do three things: educate themselves, keep good records and hire a good accountant. As a self-employed contractor, your legitimate business expenses, including home office use, are deductible. Additionally, half of the amount you pay for self-employment tax is deductible as well. Throw in the ability to set up a solo 401(k) where you can contribute up to $17,500 of your earnings as an elective deferral plus 20% to 25% of the profit of your business as a employer profit sharing contribution, and being a contractor can actually be better for contractors at a certain point.
5. If you're constantly surprised by clients cutting your hours or ending the relationship without warning, you're not managing your client relationships well. Period.
> The salaried employee agrees to work for less than the market rate, and in exchange the employer agrees to subsidize your down time. In other words, you don't have to worry about constantly finding the next thing to do just to get paid. You get to focus on the work.
There are no guarantees when you're a contractor, and it isn't for everybody, but let's not pretend that salaried employment is a risk-free proposition either.
At the end of the day, no employer is going subsidize down time in perpetuity. If there's nothing for you to do, or the value that you're creating doesn't exceed what you're being paid by a wide enough margin, there's no reason you should assume that your job is safe. If anything, this is the great lesson you learn from being a contractor: time is money. If you want to be paid for your time, and paid fairly, your time eventually has to be seen as having the capacity to create monetary value for the person or company you're serving.
If you are looking for the sort of security that doesn't depend on an employer or a client paying you for your time, you need to create something that will generate income for you even while you are not working on it. At night. On the weekends. While you are working on something else. This could simply be a portfolio of investments. It could be a software product that you can license or sell over and over for a low marginal cost. But you won't ever get to this by just selling your time to someone else.
That applies if, and only if, your contract is set up on something like a time and materials basis. For fixed price contracts, which become an option when you're working freelance, you are very much not being paid for your time, but rather for the results you generate. How fast you generate those results and earn your pay is down to you, and therefore how many clients you can take on and where any upper bound on your earnings fall is also down to you. There may in practice be an upper limit to what you can get paid for your time doing bespoke contract work, but if there is, it is demonstrably multiple orders of magnitude greater than what you could earn as a software developer on salary.
Networking, meetups and LinkedIn all seem sensible straightforward things in all countries.
I'm in the Uk too and that's exactly what I am trying to do
1) Do good work for your current employer.
2) Left to do a startup full time. It stalled. (Still working on it)
3) Second job opportunity came along while I was full time on my startup.
4) Went back to original company first, negotiated contracting position
5) Went to second job opportunity, negotiated contracting position.
MY ADVICE
1) Do good work for your current employer.
2) Find second employment opportunity.
3) Negotiate contracting position with current employer
4) Negotiate contracting position with second employer.
* Every time you get a new client, try and charge a higher rate.
* Always do good work for your employer/client
THE BEAUTY
The beautiful thing about contracting is you have multiple revenue streams. So if one stream is not providing you with the opportunities that you need, you are always in a position to renegotiate or trade up. You never feel trapped in a position. You'll also naturally gain a better understanding of what you are worth as a developer.
THE PAIN
There is a learning curve to becoming a contractor. But once you learn the tax system, automate what you can for time tracking, invoicing, and taxes, it is not a big deal.
* Freelancing - you're getting paid to do a project, and the risk is all on you
* Contracting - it's a very well-paid office job with no security
I've done both, and the latter is much much less hassle, much much more lucrative, with less freedom.
I find it quite stimulating.
If you are an independent subcontractor (in the US - 1099 status), you will likely be working through a middleman not direct to the client. So you will likely get paid on a regular payroll cycle (most likely).
If you incorporate yourself and work corp to corp (preferable in my opinion), you can sometimes work direct with the client or still through a third party. However, you'll end up billing them on a likely monthly basis on net 30 terms. So you bill them at the end of a month, and they have another month to pay you. So you may go 2 months without any compensation...
And don't forget the various insurances you'll need (at least in the US; errors and ommissions, liability, possibly workers comp).
You're right also about liability and workers comp, though I believe every state is different. Some states are more friendly to small businesses of course. So it makes sense to get yourself an accountant, especially if you calculate the amount of hours it would otherwise take you to do that work. Those are hours you could be working.
That's a freelancer, not a contractor. Different ball game entirely.
Here's the HN discussion - https://news.ycombinator.com/item?id=848370
In case anyone is interested in getting more useful resources on a regular basis to improve their contracting chops, I'm starting a weekly newsletter for freelancers. Sign up here - http://freelancers.getgini.com
http://www.kalzumeus.com/2012/09/17/ramit-sethi-and-patrick-...
The advice seems pretty generic to me, though. It's useful if you have a specific specialization like SEO or marketing, because it's easy to take than and turn it into, "how I can improve your company/bottom-line." On the other hand, someone that is just a general developer with no particular specializations probably will have to spend more time coming up with a pitch for themselves.
The contract rates are higher because they are paying for the: fact that in a few months you have to find a new job, so you're being compensated in advance for that, fact that there won't be benefits, fact that you are going to do a lot more work than a regular employee..
So, what's the good thing about contracting: Freedom. At least in the US, a 1099 employee can't be told: when to work, where to work, what to use for tools, etc. In practice, they can still ask you to "agree" to these things up front, but compared the level of control a regular employee is encumbered by, it is much less. This is US specific, not sure what the UK law is.
You get variety. Some people like the experience of working with lots of people and companies.
Finally, I guess the advice piece: you'll only be able to live off contract work if you are absolutely fearless and totally independent. You'll have to interview/find clients a lot. A client meeting is a bit less scrutinizing than a job interview, but you'll have a lot more of them, and your success will depend on finding work often
(a) enough technical skills to do a good job, possibly without the kind of peer review and supporting framework you would have as an employee
(b) enough business skills and awareness of "how the game is played" to handle the commercial side of things and deal with non-technical people working for your clients.
These probably depend as much as anything on working in a variety of environments, with a variety of teams, on a variety of projects. In the absence of other factors, like having taken a year out during a degree to work in industry or being a long-term contributor to a major OSS project in your spare time, I'd suggest doing at least 2-3 different jobs as a permie before looking too closely at freelance work, even if you only stay for a year or two at each. This will probably be enough to start to figure out for yourself what works and what doesn't on real projects, and to understand how technical work fits into the bigger picture, and most importantly to figure out a huge amount of stuff you didn't know yet when you graduated and how to continue your professional development indefinitely under your own direction.
Obviously some people do go independent much earlier, but IMHO this is almost always a mistake. Lacking the kind of context and supervision that would broaden horizons and fill in missing understanding when employed as part of a team, premature contractors often don't even realise how bad they are and become textbook examples of the Dunning-Kruger effect. While many still earn enough as journeymen to pay the rent, most will never realise the potential they could have had if they'd spent a bit longer learning from others before branching out.
I've been in London for 6 years, I've contracted for 5 of those (architect position at the BBC was "only available is it was full time". In hind sight, I shouldn't have taken it). I've been out of work for a total of 6 days in 6 years (took a week to get a contract after a 3 month holiday). I started my first contract within 6 days of landing in the country (nothing prearranged)
Freelancing is when you go from short term contract to short term contract, or you quote/bid for work. They can be 2-5 days a week, for maybe a month or less. For that I agree you need to pimp yourself like @jangosteve says, because you are moving so much. You are basically a 1 (wo)man consultancy.
I don't do this (except for my "on the side" mobile stuff). Too inconsistent.
But if you are a back-end dev (or front end, just to a slightly lesser degree) you can stay in the same place for _years_, or until you get bored of it. 3-6 months is a normal minimum, at least in the .net space which I'm in.
Unless you are useless. Then you're likely to get turfed out quickly.
Where I am at the moment, I've been there for 3 years (nearly). Last place I was there for 2 including some as a full timer. I've done moonlighting (apps, websites) at the same time. One of the guys I work with has been there for 8 years. I'm sure HMRC should have something to say about it, but no one is looking.
I'd normally want to move on after 2, just to keep fresh, but I do the same with FT jobs.
I'd be very hesitant about taking a FT position anymore. You can be fired with 1 months notice, and you get 4 weeks holiday, and maybe 75% of the wages _with tax removed before you get it_.
Contracting, I get no notice (this has only happened once when the customer literally ran out of money), but usually 28 days. I don't get paid if I'm sick, but I keep myself healthy and allow for 2 weeks sick and 6 weeks holiday a year. I have insurance to cover if I get REALLY sick.
I usually take closer to 8 weeks holiday a year. Sometimes between contracts, sometimes during them (usually during, but not at the same time)
For me, contracting is an easy way to work. The paperwork overhead with a system like freeagent is TRIVIAL if you have a half decent accountant (cough mine is great cough maslins.co.uk). Make sure you have a bit of a buffer in case you DO have issues getting work or a client pays late (if they pay late consistently, fire their arse)
So: 1. Get a limited company, and a good accountant 2. Get indemnity insurance (you need it anyway) 3. Get used to being called by recruiters who you'd like to slap with a fish 4. DO IT
There are lots of 3-6 month contracts in London and it took me a week to get an offer for one.
If you're confident in your skillset and interview well then there's no risk in jumping but have a buffer (3 months' living expenses) just in case.
In fact, just start interviewing and when you've got an offer put in your notice and do the steps nicwise says when the contracts' signed.
I also use freeagent + maslins (common setup among contractors apparently) and am quite happy with that.
The way you're using the term "contracting" is not the way everyone does. What you're talking about is short-term, fixed-term contracts, and otherwise sounds a lot like disguised employment, and as you mentioned HMRC might have something to say about that if they had time. However, there are plenty of other models for contract work that don't have the structure and limitations you described but are still clearly contracting rather than employment.
Different locations refer to contracting differently and this is part of the issue when people talk about contracting and freelancing. You need to work out the location in which they are referring to.
In London and the UK this is indeed how people use the term “contracting”. London has a whole market built around “contracting” the way nicwise describes.
It's how some people in London and the UK use the term and how some of their contracts are set up. But plenty of other people would also describe themselves as "contractors" despite having a different kind of contractual arrangement, and since no-one has some magical authority to define the term I think your generalisation is unfounded. If nothing else, a lot of boundaries have been deliberately blurred since IR35 came along, so the whole permie vs. contractor distinction hasn't been what it used to be for at least a decade.
Honestly - the grass isn't as much greener as you might think. It's more hassle, less security and holidays suddenly become horrendously expensive. But if you fancy the lifestyle and think it's for you, give it a try. It doesn't have to be any harder than permanent employment to get into our stay in (if you use umbrella companies and are good enough), it does have its benefits and if it doesn't work out, go looking for permanent work again, enough people switch between them that you'll be fine.
Depends a lot - if you have one or a small number of big clients, you probably have slightly less security than full-time employment.
If you have a large number of diverse clients, you have tremendous security - even if some clients drop your services, you can easily manage this.
Not being dependent on one person's whim or one company's solvency is awesome job security.
One of the biggest fears I hear from people looking to make the jump is "I can’t take the risk to get started."
This one stops a lot of people from making the jump from full-time employee to freelancer but you can do things to minimize your risk.
Depending on your current employment agreement, you may be able to do some moonlighting in order to build up a client list before you make the jump.
Get a part-time job to help pay the bills.
Or, just do what I did, take the leap with confidence that you will quickly sign a few clients and get things started.
For me, the most important part of freelancing has been my network. Make sure you are continually making connections. Ask for clients for referrals or recommendations. Word of mouth of your network is going to be the best marketing you can buy.
1. Don't do everything. Find a niche, something that you are good at and stay focused on it.
2. Before signing up for a project, make a guess how successful it will be. Having successful projects in your portfolio will help you grab new projects more easily.
3. Try to get initial projects through your personal network. This might help both parties develop some initial trust.
4. Favor longer projects over shorter ones.
5. Don't charge for the all of the project at once. Divide requirements into milestones, and invoice the client on completion of each milestone.
You may agree or disagree with points above, I would like to learn what you think about them.
Decided to move back to the UK, quit my job, registered a limited company and basically started to apply for any and all suitable contract roles from various job sites. Agents got my cv and started calling. 3 weeks later I had my first contract. 3 months later I quit it and got another.
My advice - don't wait as long as I did, but do be prepared to go two or three months before you get a paycheck. Also be prepared for a lot of useless phone calls about the 'perfect permanent role', which you're not interested in because yuck, perm! More advice on demand, but I'm only a year into this game. Would not go back.
also, the key is to get long term contracts. in seven years i have only had 8 clients. i usually go from one to the next. that is key to not have a lot of "bench time"
A friend at my coworking loft needed the prototype for a project made. I told him I had no clue what I was doing, but I'd give it a shot and he said he'd pay me.
The prototype was super rough, but it was sufficient for him to raise money on, and 4-5 years later its still rocking. And I was off to doing contracting/freelance after that.
Really for contracting I find you've either got to get yourself in with a consulting/design company who will hire you hourly, or be incredibly social and just network your ass off. I've rarely had consulting gigs that were because of some random email online- almost always people I've known.
Here are a few things that help me in my business. I write a lot, mostly sharing small bits of code that might save people some time; offer free mentoring help (limited to 1 hour); some open source projects. BTW, the mentoring has not lead to any business (nor is it meant to), but it is fun.
It worked pretty well and I only had to do it for a few months, but I learned I don't really care for client work.
I got into contracting by applying for a contract in the SF Bay Area from Florida, did a phone interview,received an offer -- to contract at Hewlett-Packard. I believe I found the contract on dice.com, which also helped me find other contracts. I already had experience building software for my parents' company, and had built some of my own sites, including CGI stuff that I had to pay $125/month for a shared account for, back in those days! I didn't realize what my market rate should be on the first contract. I then got recruited away by a startup to help build the first online yellow pages site. HP asked to make a counter-offer but I (foolishly) didn't let them. After some time at the startup (which later turned down an acquisition offer from pre-IPO Yahoo, doh!, and finally basically shut down), I returned to contracting, this time to Schwab. Then I did some freelance, and then returned to help the same group at HP for a short-time. Then contracting at Bank of America. Then a short contract for a web dev shop, and then got into angel investing (Napster), and co-founding startups (social networking pioneer Ryze).
Now several startups later, I've returned to a combination of remote contracting and/or part-time co-founder (heard this term yesterday :). Some companies I've helped on a cash basis (hourly/weekly rate). In many cases, it is combination of cash plus equity. I'm just wrapping up a contract where I built out the server and dev-ops infrastructure and code for a new startup, as well as helping w/ analytics, product, etc. (and where I continue to be a senior adviser).
My experience has been that the on-site contracting market in the SF Bay Area is quite efficient and dynamic, and networking is not necessarily needed. Although I did a lot of networking in the early days, which has been great in opening up opportunities over the medium/long-term, the networking was not a factor in getting leads for on-site contracting. However, it led to some resume bullet points that may have been helpful in landing some of those contracts (e.g. landing the BofA contract was helped by my experience coding some of the first Java applet ads for Symantec back in the day that was a freelance project that came from networking).
I've been in and out of consulting for myself, for large companies (SAP for example), sub-contracting, and developing. Both in London and the US. Happy to help guide a fellow HN'r.
I'm a full-stack, jack-of-all-trades sort of dev. Bit rubbish at design (but I have a great designer I partner with when needed), but I do a bit of everything, from infrastructure, networking, database, middle tier and front-end html/css/javascript. Any specialist in any of the above will wipe the floor with me skills/wise. But I'm pretty comfortable communicating with clients and helping get the best bang-for-buck with them only having to basically describe what they are trying to achieve.
My key bit of advice would be to fire difficult clients and only work for time and materials. If a client is too high a maintenance, you may not be a good fit for them, or them for you. In that case I try and transition them elsewhere, recommending someone that may be a better option.
Equally, fixed prices quotes are almost never worth it in my experience. I'd rather release early and often, then the client can then see how much business value they've gotten for XX amount of hours/money. After which, they can make the decision to either continue or to terminate, depending on whether they feel they're getting value or not. It's normally a completely different way of working for most clients, but I often offer a two week shared-risk starter deal to ease them into it. If it doesn't work, I'll absorb half the cost and we'll call it quits. But so far, every relationship seems to have worked out well.
The biggest downside is possibly taking time off. I'm pretty flexible about timings. I'll work when clients need it, and take breaks during slack periods (of which there haven't been enough). But my ex wasn't supportive of me having to work while on 'holiday'. It wasn't a lot (no more than 20 hours over a two week holiday), but YMMV depending on how understanding your partner is/isn't.
As far as transitioning goes. Try sounding people out for possible side projects you can do while keeping your day job. I worry that I'm not a good networker, and that one day the work will completely dry up. But on the flip-side, I kind of want that to happen, so I can focus more on projects that I want to do myself. And it's hard to do those when you've got paying projects to do. But if you can pick up a couple of side projects, once they're earning almost enough to live off, you've no excuse to pack in your day job and do that full time. I've got a couple of mates who started contracting this way.
Unless you mean just straight out contracting... as in, apply for a typical contract and work there.. just like a day job. In which case, it's a piece of piss... just start applying. But I find recruiters(pimps) rather distasteful to go through, so I've avoided them completely. (There are good ones, but they're few and far between)
Good luck!
I outlined how I did it a little in a post yesterday:
https://news.ycombinator.com/item?id=5805627
This is two brain dumps in two days, maybe I should be putting this on a blog, apologies if that's more appropriate. Apologies for typos or grammar, I'm writing this in one pass before heading out.
To dig into the comment about finding your first customers.....
My formula, which I recommend you consider trying some or all of (and has worked for friends making the jump):
- Keep your job. You are not here to learn developer skills, but business skills. You will build up your part time income to take over what you make full time. Too much work? It's probably a fair comparison to how much work getting and fulfilling contracts will be until you get the hang of it so dive in. Just be prepared to work more to have the flexibility to do what you want. There are some incredibly insightful tips in this thread overall, especially the few at the top.
- Business skills are something you will be learning forever, like coding.
- The first business skill you need to learn is value. Then, creating it, in a reasonably sustainable way that you can then start to rely on.
- The second business skill you must do is come to some sort of working peace with money if you have any issues with making it or issues with what your professional value is. I regularly bully/coach friends into business for themselves and can be available to give you a few words of advice. For me, it's becoming like credits in a video game to do other thing I want on top of interesting and meaningful work. I do some tougher work that pays better, so I can spend time with a startup or idea I like at a discounted rate, or put in more time than normal where you like.
- My currency is respect and customers who know it get way more from me without me being able to help myself. The ones who don't seem to filter themselves out. This may or may not be for you but whatever it is for you, the sooner you can get a sense of what it is, and develop it forever, the easier you'll have a compass to know if something is right or not.
- You're welcome to dive in to beat the statistics, but you will stand a better chance if you start freelancing and slowly building it up by finding long term customers.
- SMB's want one guy to shoot. They don't care that it's the server's fault, the isp's fault, a bug in the code, or a bug in the platform or framework. They want the one interface who is like a department or interface to them to get that wing of their business sorted out. They'll be ok if you find someone and manage them for cost + 10% if they don't want it.
- The more they think of you when they have problems that need solving, the more you'll end up having long term customers for 4-10 years like I have. I don't say yes to all the work, sometimes I help them hire, sometimes I help them find a vendor, sometimes I hire the vendor for them and train them, sometimes I sub them out under myself, it totally depends on the situation, my availability and interest, but bottom line is I'm paid well for my time to figure it out for them and monthly retainers become that much more valuable to them
- Many small to medium businesses may not have a full time position, but have enough to afford $500-$1500 a month. Either this work needs to be right up you alley, or trivial for you to do and deliver effectively and consistently. It might be a technical retainer, or a certain amount of bug fixes, or features, etc.
- Don't have an ego. I started doing networking, IT support, fixing printers, and then once I did the six month "network stabilization" the customer naturally turned to software support. I wasn't above doing anything. If the computer needed to be cleaned out from dust, I did it. That attention to detail is what one day had me doing the replenishment orders for a billion dollar retail company on a weekly basis by analyzing what they sold in the past week and what they should try the next week as an experiment.
- I'm a full stack guy though and it helped me a lot get in the door to fix something trivial or figure out something finicky and after I did that, the relationship was great. Being that person that came in and took care of a small thing that was important is a great way to get in, most of my referrals came this way too because business owners like showing off their people to other business owner buddies. I recommend you be as full stack as your honest interest allows. Along the way you will find the things that you love more than others, and I lump them into necessary evil (complex hosting hosting the projects I build) vs what I love (building the software that never goes down)
- It is far more preferable to find 10 customers who will pay you $1000 a month (that's 100 hours billable at $100/hr) than to look for all of it in one place. If one dies, changes, or disappears, you won't sink. Chances are you might find 4-5 customers that pay $2000.
- Deliver monthly summary reports of the value you provided. Number of requests, what you solved, what you looked into on your own initiative, savings you helped create or increase, money you helped them make, etc. Attach it to the invoice every time. It's the only permanent record you'll have when you look back in 4-7 years.
- One thing that didn't exist as much 10 years ago was remote development and remote access. PCAnywhere was the king and it helped me learn how lay down a remote developer life with visits in person as needed. What I did was to offer not to bill customers for travel time, or a minimum on-site bill and instead charge them by the quarter or half hour if they'd let me work with them via screenshare (if it was necessary). It's a fair trade with the right customer. Be open to learning how well screensharing as needed can work for you.
- As you're starting out, reach out to small and medium size businesses like yourself. They like the one on one, "I'm dealing with someone like me" approach. They should not balk at expecting to pay $500 to $1500 a month for something they need, or to have you on call.
If you want help crafting such a pitch, I can help you. I have helped friends learn to win small contracts on CL, etc, and work their way up. I believe that there's some level of business skills you learn here that here that are hard to learn anywhere else. Once you know you can make a relationship and deliver value, possibilities can open up.
Hope some of this was useful or at least interesting, if anyone has any questions, feel free to get in touch.
0. Do some market research, what does your competition charge? What do you offer that they don't? If you don't have a way to differentiate yourself how can you package what you offer to make it seem better than what they are offering, if you can't dazzle with brilliance baffle with bullshit.
1. What do your customers want? You know what they need, but what do they want? Designers often seem to design to impress other designers, programmers enjoy pulling neat hacks that other programmers admire, and system admins love building cool stuff that integrates some of the latest automation, but are these things what your customers want? If it is great! Just make sure to gut check yourself when you put together what services you offer to make sure you aren't just following your own fantasies of what you wish work was like. Now that you know what they want figure out how to sell them on the cool stuff you enjoy doing as well as long as it doesn't get in the way of the initial goals they have. Yes you may know better than them in regards to what they need in some respects but they know their business case better than you, if you can meet in the middle you will get plenty of referrals.
2. Advertise, advertise, advertise. I used a combination of spotify ads and google ad words initially. The number one thing to remember about adwords is, don't lock yourself into just the keywords you think should work. Find out what business people would type into google when searching and target those words.
3. This is something a lot of people might disagree with but, I over book myself, not to the extent that the work suffers but to the extend that my work home life blurs and it's mildly stressful. You never know when a client might flake out and having that cushion will save you when your clients nephew takes a course on youtube and thinks he is now a $your_job_here. I make my money over a 6 month time period and then take 6 months off. I have a much closer relationship to my children and my spouse and over all I'm much happier, the ability to travel is really nice as well.
Keep your main revenue stream until you can at least get a few paying clients then shove off but remember you will need to think about health insurance if you are in the U.S. (I infer from the title you are in London) if you do have to worry about insurance and are in the U.S. you can look into http://www.freelancersunion.org/ consider it leverage when buying insurance. Also keep in mind there is significant overhead from book keeping I was shocked at the number of hours it took, I said screw it and automated the whole process.
Also keep in mind they can pay contract workers so well for a few reasons, it's results based, they don't have to pay for insurance or other benefits, there is no training budget involved.
Still it's the best decision you can make, you are your own master though and it feels amazing.
Good luck!