Taking your first steps in the world of IT contracting

If you know what are you are doing, IT contracting can be a lucrative business ... photo by CC user small_realm on Flickr

IT contracting can be a great choice of career, giving you independence, flexibility and the freedom to work from almost anywhere you want. Anybody with a solid background in computing, whether it’s gained through work or study, can become a success in this area – it just takes hard work and determination. How should you start?

Before you start working

The first thing to do when you set out to be a contractor is decide how you want to run your business. You could set up a limited company, but this involves extra responsibilities and overheads, and is not always a practical choice. An alternative is to set up as a sole trader, with direct responsibility for your own accounting, tax payments, etc. Whichever approach you take, you should contact your local tax office to make sure you have access to all the right forms and understand your regulatory obligations. You may also find that stuff there can point you to useful sources of support.

Finding jobs

If you’ve worked in computing before, a good way to get started as a contractor is to use your existing contacts and start networking. If you’re new to the business, try doing some volunteer IT work for charities in order to build up a portfolio and get some positive testimonials. You’ll find various job boards online relevant to your area of expertise, and working to develop a specialty can give you an advantage. As you build a reputation, you’ll find that clients begin to approach you. Create a good website that advertises your skills and, if you find yourself facing a dry spell, consider signing up with an agency.

Managing finance

It’s important to keep accurate records of your business transactions and pay all your taxes on time to avoid facing financial penalties. Often the best tax advice for contractors is to sign up with an umbrella company, which simplifies everything by collecting your income, subtracting the taxes you owe and returning the rest to you. Although they naturally have to charge a fee to cover their own costs, their tax expertise means they can often save you money elsewhere.

Why go solo?

Contracting isn’t for everyone. Early on, it’s likely that you’ll be working long hours and not earning very much, plus you’ll have to spend a lot of time searching for each job you get. As you become more established, however, it will get a lot easier. Getting into a routine means you’ll be able to manage your work more effectively, you’ll get more clients, and gradually you can start to drop the lower paying ones or insist on getting better pay.

Working for yourself means you can focus on doing the work that you find interesting. You can choose your own hours and structure your projects to fit them around social events – this way you can get more out of your personal life. When you’re ready to take the plunge, contracting can be highly rewarding.