First Ever Contract.......scared.....

**Saddo** · 20 September 2010, 20:47

It's always a worry starting up on your own. I was a permie-turned-contractor and faced the same issue. But I discovered that my fears were irrational, and that I was actually more secure as a contractor than I had been as a permie. Reason being that you can plan ahead for when the contract is expected to end, and put some money aside to pay for a break between contracts. Whereas when you are a permie you tend to spend 110% of what you earn, and if redundancy strikes you have a major problem. Plus, if you figure you want to change jobs you've got a notice period before you can get out - and employers tend to like to have people who can start next Monday.

With regard to setting up, get some IR35 protection insurance in place so that if Hector makes a call you can hand it over to an organisation that will make it very difficult for Hector to proceed. Hector does NOT have rights relating to you having to respond to his questions (though he might make it sound that way) - so let the insurance buffer deal with answering questions. Furthermore, beware Hector making a request for a salary inspection review or some such - these "reviews" have a nasty habit of turning into an IR35-review.

Good luck on your new venture.

**NorthWestPerm2Contr** · 20 September 2010, 21:15

I used to think the same thing when I was permie.

I have had 2 extensions and am coming up to 9 months now at my first gig. I used to see it as:

"Is it a good choice" or "am i doing the right thing".

Now it's:

"There is no other choice" and "I can't, I won't go back permie".

Living on 30k a year permie salary after tax, national insurance, expenses makes life not worth living. It means you are always in debt and struggling. Contacting opens your eyes to the real world and let's you make a Plan B and Plan C because of the avenues it opens up for you and the way it makes you think...

Having said that, I am finding it near impossible finding my next contract. They are cutting all contractors where I am working and I am one of the last 2 left. The market is dead. So I can imagine I will be out of work for a good few months at least after this contract finishes (if i get to the end of it).

**d000hg** · 21 September 2010, 07:22

I don't particularly think I'm happier on £400/day than I was on £27k a couple of years back. A bit, perhaps, mainly since we are living someplace nice now, but it's not a major deal.

**filthy1980** · 21 September 2010, 07:26

yeah only been in the game a couple of years, and i think until you have done 3/4 contracting roles you always have that tentative feeling

on my 3rd role now and the 1st two was bricking myself constantly thinking if they get rid of me tomorrow then "i haven't got enough money saved and not sure if i can land another gig due to lack of experience"

but as your experience grows so does your confidence and nest egg . . . my advice would be to have short, medium and long term goals in mind and try to remain focused on achieving those

**Scrag Meister** · 21 September 2010, 07:35

Originally posted by d000hg View Post

I don't particularly think I'm happier on £400/day than I was on £27k a couple of years back. A bit, perhaps, mainly since we are living someplace nice now, but it's not a major deal.

WHAT!!!!??? That is so crap d000hg.

Its contracting that pays for the enhanced lifestyle and your nice house.

If I had still been perm, I wouldn't...
1. Be living in a nice house in London AND still have my house in Devon cos I paid the mortage off.
2. I wouldn't be driving a Nissan 350Z, major grin factor

3. I wouldn't have bought the wife a new motor.
4. My wedding in June would have been no where near as good as it turned out to be.
5. I wouldn't have honeymoon'd in Hawaii
6. I wouldn't be able to pop over and see family in Denmark at a whim.
7. I wouldn't be able to assist my kids with things they need.
8. Be taking spontaneous weekends away on the motorbikes.
etc
etc
etc
.
.

I look forward to doing stuff that is enabled by the fact that I am a contractor.

**chef** · 21 September 2010, 07:39

<Chef in "harsh love" mode>

Do you have savings? i.e let's take worst case scenario and 1 week after the first contract they "let you go" for whatever reason and then let's say that you don't get any more contracts for a while given your little contracting experience (i.e 2 weeks) and your 3 years real world experience (assuming this is your first job out of uni)..

Anyway, so, how long can you live for with no further income other than what you have now?

If your answer is anything less than 6 months I would seriously think twice before taking the great leap. Mainly because this isn't such a good time to be joining the contract market right now and anything less than 6 months "war chest" is a gamble (in my opinion) that the 1st contract you get will see you through. There are plenty of other contractors out there with years of experience and sat on the bench waiting for something to come up and if they're up against you unless you're some kind of hotshot in your field they will get the position over you.

If you don't like the above paragraph then think to yourself, given the savings I have now how long would I need to work on my average daily rate to build up a warchest of 6 months+ given my current outgoings? Now compare that x no. of months with the likelyhood that you will have continuous work for that period. Forget what it says about notice period on your contract, there will also likely be a clause that states you only get paid for work completed and so if they want to get rid of you quickly they'll give your notice and then state that there is no more work for you, no work means no signed timesheet to prove you worked, no timesheet means no pay so having 1 day or 6 months notice usually is irrelevant.

If you do have substantial savings (and you're not in the ITSM bespoke development field

) then I'd say take the leap of faith and good luck to you. If you do work in ITSM development then f##k off there's too many of us already as it is..

All the best

Chef

p.s tough love respects payment, reputation can be given by clicking this star here
<----------------------------

**ratewhore** · 21 September 2010, 07:41

Originally posted by Scrag Meister View Post

WHAT!!!!??? That is so crap d000hg.

Its contracting that pays for the enhanced lifestyle and your nice house.

If I had still been perm, I wouldn't...
1. Be living in a nice house in London AND still have my house in Devon cos I paid the mortage off.
2. I wouldn't be driving a Nissan 350Z, major grin factor

3. I wouldn't have bought the wife a new motor.
4. My wedding in June would have been no where near as good as it turned out to be.
5. I wouldn't have honeymoon'd in Hawaii
6. I wouldn't be able to pop over and see family in Denmark at a whim.
7. I wouldn't be able to assist my kids with things they need.
8. Be taking spontaneous weekends away on the motorbikes.
etc
etc
etc
.
.

I look forward to doing stuff that is enabled by the fact that I am a contractor.

Indeed. Contracting is the thing you do in between all the fun stuff, so you can afford to do all the fun stuff (if that makes sense?)...

**v8gaz** · 21 September 2010, 08:00

Get of to Home | PCG and download the free guide to freelancing. Tells you almost everything you need to know.

**Rivendell** · 21 September 2010, 08:04

blimey - I'd written a response to the first 2 replies and before I know it there's a load more! forgive me for not replying in turn at this point - so..

Saddo / NorthWestPerm2Contr

Thanks - a few things in your posts to both give me confidence and again make me nervous:-

Saddo - I don't know who Hector is - should I? I guess you mean HRMC? I will look into the insurance you mention; IR35 seems a minefield.

NorthWestPerm2Contr - your second to last para reminds me of why I need to be contracting

Your last para reminds me why I need to be in a perm role!

Thanks again

First Ever Contract.......scared.....