Many contractors feel they have secured their dream job – they have become their own boss. For this reason and many others, contracting is a very attractive prospect for the right person.
As a contractor, you could earn more money, gain a wider range of working experiences, take on greater professional responsibility, make many new contacts and pay less tax. Nevertheless, contracting does present some obstacles which full time employees do not have to face. Here are five key ways to know if contracting is right for you:
1. You enjoy working independently
As a contractor, you have the freedom to pick and choose the work you most want to do, out of your available options. If you do not want to take on a particular project, there is no-one who can force you to.
Moreover, with this increased independence usually comes increased pay – contractors tend to earn more per hour than full time employees fulfilling similar roles, for two main reasons. Firstly, your client does not have to pay employer’s National Insurance on your pay or other employee benefits such as holiday pay – therefore, the company can afford to pay you more. Secondly, if you have negotiated an hourly rate, you earn for every hour you work, whereas many full time employees earn nothing more for their unscheduled overtime.
2. You want to broaden your professional experience
If you are a proactive person who likes to seek opportunities, rather than wait for them to be presented to you, then contracting could be the right fit for you. The increased freedom offered by taking on a variety of contracts for various clients can significantly increase your range of skills and broaden your portfolio.
In turn, these new opportunities provide you with further networking opportunities and naturally, any new contacts you make could offer you work in the future. Furthermore, should you decide one day to return to full time employment, you will be more marketable than when you first left, thanks to the new experiences on your CV.
3. You relish a challenge
As a contractor, you are hired as an expert, required to shoulder major responsibility on any projects you work on. To add to this responsibility, you also have to adapt to unfamiliar surroundings quickly – the project could require you to work in an office you have never seen before and with people you have never met before. Yet as an expert, you are also expected to hit the ground running.
Apart from the challenge of contractor projects themselves, there is also the challenge of finding enough work to make ends meet. Life as a contractor can be full of uncertainty if you struggle to find a new project, or if work is cancelled at short notice, or if a regular source of work is not renewed. Contracting rewards the highly ambitious – the more you work, the more you earn. However, on the flip side, there will be no-one to pay you when you go on holiday, or fall ill.
4. You form new working relationships quickly
Adapting to new client relationships quickly can set you apart from the competition. On short projects in particular, you don’t have long to make your impression. Earning a renewed contract could depend on your ability to act professionally throughout your work, letting employees benefit from your expertise and staying on good terms with everyone you encounter.
Your new relationships will also play a role in helping to prevent loneliness. The independence of the job often brings the flexibility to work regularly from home – this appeals to many people, but this much time out of the office can also take some time to adjust to. Therefore, when you do have the chance to work directly with someone else, it is important to make the most of it.
5. You are efficient
Aside from your project work, since you are running your own business there will be quite a few administrative responsibilities to fulfil. However, you do not want to eat into too much time that you could be billing to clients by working on their projects, so your ability to complete these tasks efficiently will be put to the test.
On the plus side, this efficient way of working offers another great benefit – efficient tax savings. Contracting through your own limited company can reduce your overall tax contributions and therefore increase your take home pay. In addition, you can also offset your business expenses against your earnings to decrease your tax burden even more.
Contracting could be right for you if you like the idea of being your own boss or being in charge of your own professional development and if you feel you have reached the right stage of your career to seek an exciting new challenge. The work is very flexible, so you must be too – be prepared to adapt to new surroundings and new projects, as well as get on with new people quickly.
The advantages are certainly appealing, particularly the prospect of increased earnings and a reduced tax bill. For more information on how you can make long-term tax savings as a contractor, please call us on 02070996477 or email us at firstname.lastname@example.org.