Are you looking to make the move from permanent employment to becoming a self-employed contractor? It’s not an easy decision to make by any means. No one wants to make a jump into the unknown, which is why it’s always a good idea to transition gradually from employment to contract work.
It is advisable to take on a few clients, or at the very least networking to line them up before you hand in your notice. But, there a few other factors to take into consideration before making the leap.
Read on to see what steps you can make to ensure the transition period is as seamless as possible…
Evaluate the pros and cons
There are several pros and cons when comparing self-employed contract work to full-time employment. These factors range from higher pay, flexible working arrangement and saying goodbye to office politics to the thrill of sourcing and landing your clients. You’re in full control of what you do (or do not) work on and that is important for many.
Of course, there can still be risks. Contracts come and go and there’s no guarantee that you’ll always have regular work. There’s a great deal of competition out there, plus you’ll be in charge of your own upskilling – you are your own boss now after all. Contracting also comes with added pressure. If your work doesn’t impress, then it’s likely you won’t be given another chance.
Once you’ve fully evaluated the pros and cons, if you still have your heart set on becoming a self-employed contractor then your next step will be to honestly evaluate your skillset. What are you great at? Where do you excel? Be sure not to overlook important ‘soft’ skills though, as these are incredibly important to have as a contractor.
What soft skills are important?
Everyone needs to identify their main selling point, which is a lot of cases are not ‘soft’ skills. But you must know every aspect of your skillset. As a contractor, you’ll go through many interviews, have to negotiate your rates and organise lots of business admin. If you fall short at any of these, you’re going to have a bit of trouble.
Valuable soft skills include problem-solving, networking, sales (you have to sell yourself at the very least), attention to detail (vital for contracts) and ability to take constructive, and sometimes negative, feedback.
Are you the best that you can be?
Working out your skillset is only half the battle, once you’ve identified your strengths – and weaknesses – you need to act upon them. Are your strengths as good as they could be? How can you improve your weaknesses? As a self-employed contractor, you’ll have to ensure that you’re maintaining your skills and knowledge to the highest level. This is vital for making yourself appeal to future clients.
Being aware of the latest industry news, technology, best practices and any other developments are also important.
Do your research
One of the most valuable things you can do is reach out to those who are already working contractually in your field. They’ll be able to give you advice, or at the very least, share their experiences with you so you can get a detailed idea of what you’re heading into.
It’s also handy to have a look around at what people are looking for in a contractor. If you’re seeing a lot of job descriptions that you know you could do well at, you’re on the right track. If not, you’ll at least have an idea of what you need to do or learn before making the move.
How to handle the transition
It’s always advisable to take your time in this transitional phase. Where possible, avoid making any rash decisions and acting impulsively. You don’t want to be left in an unfavourable financial position because you’ve rushed into things.
Plot out a resignation plan, if you’re in full-time employment then you should have a set notice period that you’ll have to work. You can find all of this information in your employment contract. A well-thought-out notice period will serve you well in the eyes of your current employer and it’s always best to leave on good terms.
If possible, flexibility with your notice period is ideal. This could include an option to cut it short or undertake a phased handover. This would be where you move from full-time to part-time work before eventually transitioning into life as a contractor.
Before you act, be sure to go over your employment contract explicitly. Don’t just look for the terms of your notice period but keep an eye out for any limitations that may be in place for a time after you have left. These could include restrictions on liaising and canvasing clients that work with your current employer.
As a self-employed contractor, there is one big choice that you’ll have to consider. Do you register as a limited company, or do you go down the route of an umbrella company? Again, there are pros and cons to each of these.
Limited company
From higher financial rewards to extra expenses available for you to claim, registering as a limited company is seen as favourable by many. You’ll have protection for if things go wrong and some clients prefer working with those who are registered. This is because some companies see you to be more credible.
Umbrella companies
Umbrella companies take the pressure off of contracting. They aim to give you the independence that you would have as a contractor, whilst maintaining a level of convenience that full-time employees receive.
They’ll take care of your paperwork. And, if doing your own taxes was off-putting, this will be music to your ears. Umbrellas will also take care of invoicing your clients for you and then they pay you as if you were an employee.
This option allows you to focus on the work at hand, helping you find more time to deliver fantastic results with the headache of invoicing.
