ok, IT geeks.. who's a contractor

[scooterSST]

I'm wanting to get into contracting on my own... without going through a recruiter..

any advice...

Some background (yeah I edited this)

I'm a ColdFusion Developer, it's a web application development language owned by Adobe. CF sits on top of Java, and generates java byte code on the backend. I've been doing it for about nine years now. It speaks to almost every enterprise database via JDBC, and can do all of the cool stuff that PHP and .NET can do. I can do alot of the hardware stuff, and have done tons of server setup and configuration.

I'm coming of a W-4 contract that I got through a recruiter, my wife has excellent benefits through her company so health insurance and such isn't an issue. I like the idea of being able to kinda set my own hours, and having more control over my destiny. Plus I have a better chance of landing another telecommute position. Most of the recruiters in the Raleigh area want to land me into a direct to hire or temp to perm position.

 

[lady_space]

I'm wanting to get into contracting on my own... without going through a recruiter..

any advice...

Whatchoo got against recruiters???

Seriously, though, you can often get your foot in the door with a staffing/recruiting agency, or sometimes companies will have postings for contract positions through their Web sites, but you're quite likely to have to deal with a recruiter at some point. I work for Spherion so I may be biased--we are one of the top staffing & recruiting firms in the world--so if are curious about anything I might be able to tell you from the recruiting side, let me know. (We also have several people on our own team who work for us on a contract basis as well, so I see it from both sides to an extent.)

Good luck!
Shaye

 

[nailz]

why would you want to do contracting?

 

[shreddy]

Whats your area of expertise going to be, hardware, software, networks, telephony, etc..

There is going to be lots of work to get yourself properly setup as your own consulting firm, first off your not going to be able to handle every aspect of the business from, sales, purchasing, support, billing, marketing and lastly which areas of IT are going to be able to specialize in. You should find a couple partners to start off your own business, you might be great with hardware but what happens when you go to a potential client and they start talking about databases and transactional SQL scripts also you may have a client who will want you to purchase hardware, do you have a TAX ID? Typically selling IT services to regular people can be simple work but when you get to the corporate level its very hard to get into you'll need someone who is a great salesperson. Finding partners that specialize in other areas of knowledge that your not familiar with will be very helpful.

I've been in IT for over 15 years and I prefer getting the weekly paycheck and insurance. But with that said if you have highly marketable skills you could rake in $200 an hour. My last job had an application/database developer that they couldnt afford to pay anymore they had to hire him, then he left a couple months later and was back charging them consulting fees on stuff he didnt finish.

Ed

 

[Yippee38]

I've been in IT for over 15 years and I prefer getting the weekly paycheck and insurance. But with that said if you have highly marketable skills you could rake in $200 an hour. My last job had an application/database developer that they couldnt afford to pay anymore they had to hire him, then he left a couple months later and was back charging them consulting fees on stuff he didnt finish.

At my old company, they paid a guy from CA to fly in every week, paid for an apartment, a car, expenses, plus $300/hour for 4 years. He was a solo consultant. He did Oracle DBA and Analysis. When he left he told me that I should do it. He guessed I could be getting paid $150/hour my first year.

 

[Diamond45]

But working on your own means a couple of things:

1) No safety net. You're all on your own. Some people like this, others don't.

2) You have to pay all of your expenses. All of your insurance, retirement, benefits, Social Security, FICA, etc. Gotta factor this into your equation. Sure, you may get paid a lot per hour, but that doesn't include all your benefits. More than double what your hourly rate is, maybe almost triple that amount in some cases. For example, my take-home hourly rate is about 1/3rd what my employer actually is paying me - but I don't necessarily see that in my paycheck.

3) You have to have time to do the "back end" business. This means you do all the work that other people in a regular business would do for you. Contracting, paying the bills, etc. Sure, you can use software like Quicken and the like to automate the work, but you still need to take time away from your job to do these things.

So weigh the pros vs. cons of going out on your own. It isn't as easy as you may think.

 

[lady_space]

But working on your own means a couple of things:

1) No safety net. You're all on your own. Some people like this, others don't.

2) You have to pay all of your expenses. All of your insurance, retirement, benefits, Social Security, FICA, etc. Gotta factor this into your equation. Sure, you may get paid a lot per hour, but that doesn't include all your benefits. More than double what your hourly rate is, maybe almost triple that amount in some cases. For example, my take-home hourly rate is about 1/3rd what my employer actually is paying me - but I don't necessarily see that in my paycheck.

3) You have to have time to do the "back end" business. This means you do all the work that other people in a regular business would do for you. Contracting, paying the bills, etc. Sure, you can use software like Quicken and the like to automate the work, but you still need to take time away from your job to do these things.

So weigh the pros vs. cons of going out on your own. It isn't as easy as you may think.

Very good points. Many of the reasons I decided not to do freelance work a while back. Also, it's advisable for you to have 6 months' pay in the bank before starting out what amounts to your own business.

 

[scooterSST]

Whatchoo got against recruiters???

Seriously, though, you can often get your foot in the door with a staffing/recruiting agency, or sometimes companies will have postings for contract positions through their Web sites, but you're quite likely to have to deal with a recruiter at some point. I work for Spherion so I may be biased--we are one of the top staffing & recruiting firms in the world--so if are curious about anything I might be able to tell you from the recruiting side, let me know. (We also have several people on our own team who work for us on a contract basis as well, so I see it from both sides to an extent.)

Good luck!
Shaye

I've dealt with Spherion in the DC area before, you probably have a resume or two from me lying around

 

[Rycher]

You'll probably need a commercial insurance policy for several reasons - not only to protect yourself, but also just to get in the door. Many companies collect Certificates (i.e. proof of insurance) prior to letting a contractor on their premises.

General Liability & Professional (E&O) Liability are a must. GL shouldn't be too expensive, but E&O could be costly.

 

[lady_space]

I've dealt with Spherion in the DC area before, you probably have a resume or two from me lying around

Ha... actually, so I have I. Based on my experiences, I hope you don't have a bad taste in your mouth. I see where you edited your intitial post, so I'm guessing that's a possibility.

I don't do the temp/staffing stuff--we do full-service, direct-hire recruiting on my side. I like it a lot better. I can only imagine how frustrating it is if you're looking for one thing and keep getting people wanting to temp you out. :b

Shaye

 

[zimbee]

He guessed I could be getting paid $150/hour my first year.

Ermmm... Not likely... But nice of him to say.

As mentioned, you will have to deal with a lot of stuff on your own. Unless you are paid under the table, you need to register a company. I highly recommend using a lawyer to do that for you because said lawyer will know all the requirements for your area. The lawyer will also have advice on what type of company to register. Then you must have an accountant - makes payroll, taxes, etc. so much easier!

You will be making more money than with a regular job, but there are all these added nuisances as outlined in Diamond45's post. Additionally, you have to make sure you keep business and personal stuff completely separate.

Being a jack-of-all-trades and master of all helps, too.

 

[Diamond45]

As mentioned, you will have to deal with a lot of stuff on your own. Unless you are paid under the table, you need to register a company. I highly recommend using a lawyer to do that for you because said lawyer will know all the requirements for your area. The lawyer will also have advice on what type of company to register. Then you must have an accountant - makes payroll, taxes, etc. so much easier!

Forming a "S" corporation is a smart way to separate your business assets from your personal ones. If for some reason your business gets sued, your personal assets are protected. But the best reason is for tax purposes.[/QUOTE]

 

[Michael TEOF]

But working on your own means a couple of things:

1) No safety net. You're all on your own. Some people like this, others don't.

2) You have to pay all of your expenses. All of your insurance, retirement, benefits, Social Security, FICA, etc. Gotta factor this into your equation. Sure, you may get paid a lot per hour, but that doesn't include all your benefits. More than double what your hourly rate is, maybe almost triple that amount in some cases. For example, my take-home hourly rate is about 1/3rd what my employer actually is paying me - but I don't necessarily see that in my paycheck.

3) You have to have time to do the "back end" business. This means you do all the work that other people in a regular business would do for you. Contracting, paying the bills, etc. Sure, you can use software like Quicken and the like to automate the work, but you still need to take time away from your job to do these things.

So weigh the pros vs. cons of going out on your own. It isn't as easy as you may think.

You sound like someone who works for the government ;-)

Contacting is the way to go. You'll make 3x as much. Becoming a contractor and succesfully staring up is the hard up. Once you're there, all these counterpoints you're bringing up are laughable. He could take 1 factor of that 3xs as much he's making, put it in a savings account, and be better off for retirement. The other factor he could use for a nicer hotel when he comes to Prog Power next year... and perhaps for a few rounds of beer for his friends ;-) hahaha

The Michael

 

[Diamond45]

You sound like someone who works for the government ;-)

You caught me, fair and square. I've worked with enough independent contractors (real small companies - some as small as one person) so I have some background. Why? Because I asked these people how and why they left the government themselves. I've considered leaving the government several times, but after hearing the stories of not getting paid on time and borrowing money, I reconsidered. (Government will pay for a contract, but not necessarily very fast.)

Contacting is the way to go. You'll make 3x as much. Becoming a contractor and succesfully staring up is the hard up. Once you're there, all these counterpoints you're bringing up are laughable. He could take 1 factor of that 3xs as much he's making, put it in a savings account, and be better off for retirement. The other factor he could use for a nicer hotel when he comes to Prog Power next year... and perhaps for a few rounds of beer for his friends ;-) hahaha

Actually, I make enough money that I did upgrade to a better hotel for next ProgPower Got bumped up to the next pay level at my last review!

Contracting does pay more - you just have to weigh the pros vs. cons. Some people love it, others hate it and have gone back to the government. Its what you want - either better pay or better perks. Your call.

 

[MetalRose]

You'll probably need a commercial insurance policy for several reasons - not only to protect yourself, but also just to get in the door. Many companies collect Certificates (i.e. proof of insurance) prior to letting a contractor on their premises.

General Liability & Professional (E&O) Liability are a must. GL shouldn't be too expensive, but E&O could be costly.

A++++++++++

Depending on the business E&O isn't horrible. For someone running a website VS a Doctor, it's going to be vastly different. But you are right, it is an expensive necessity.

-Metal "The Insurance Geek" Rose

 

[Rycher]

A++++++++++

Depending on the business E&O isn't horrible. For someone running a website VS a Doctor, it's going to be vastly different. But you are right, it is an expensive necessity.

-Metal "The Insurance Geek" Rose

True, but any technology-related E&O policy is pretty pricy, especially with anyone that actually writes software. Depending on the value of annual sales, those can be over $30,000 in premium annually.

For other types of business, E&O policies usually start at a $2,500 -$5,000 minimum.

Never go into starting a business without researching the insurance costs.

 

[Wandrail]

At my old company, they paid a guy from CA to fly in every week, paid for an apartment, a car, expenses, plus $300/hour for 4 years. He was a solo consultant. He did Oracle DBA and Analysis. When he left he told me that I should do it. He guessed I could be getting paid $150/hour my first year.

What year was this?? Even with the Oracle expertise there's no way that can reflect current market demand. $300/hr is pre-dot com bubble burst money.

 

[MetalRose]

True, but any technology-related E&O policy is pretty pricy, especially with anyone that actually writes software. Depending on the value of annual sales, those can be over $30,000 in premium annually.

For other types of business, E&O policies usually start at a $2,500 -$5,000 minimum.

Never go into starting a business without researching the insurance costs.

I know, I was licensed to sell insurance silly. But I love that other people remind others without me having to sound like a broken record.

Although, to be honest, I didn't have a lot of dealings with E & O. My supervisor wrote all of those and I never dealt with an E & O claim. So my knowledge of the workings of those policies isn't my strong point. If you ask me about car insurance or home owners insurance rates, I could list the specifics down to the T what makes the rates change, with E & O- I can only give basic generic info. So it's really cool to know that those factors (sales, etc) can really change a rate.

Thank you for your helpful advice!

-MetalRose

 

[scooterSST]

I know, I was licensed to sell insurance silly. But I love that other people remind others without me having to sound like a broken record.

Although, to be honest, I didn't have a lot of dealings with E & O. My supervisor wrote all of those and I never dealt with an E & O claim. So my knowledge of the workings of those policies isn't my strong point. If you ask me about car insurance or home owners insurance rates, I could list the specifics down to the T what makes the rates change, with E & O- I can only give basic generic info. So it's really cool to know that those factors (sales, etc) can really change a rate.

Thank you for your helpful advice!

-MetalRose

Questions

1) What is E&O
2) I'll primarlily be doing offsite programming (I hope), do I really need it?

 

[Kaosaur]

E&O is Errors and Omissions. It's basically professional liability insurance. It's to protect you if someone tries to sue you for negligence or not performing your contracted duties.

And yes, it's needed. It is critical to protect your business.
http://www.techinsurance.com/ce_whatisEO.aspx