
Ask HN: How did you move from a salaried job to contracting? - lucaspiller
Reading the poll about salaries in London (https://news.ycombinator.com/item?id=5804134) it seems  a lot of people working permanent jobs are getting shafted. Contract rates seem to be quite good though, so I'm wondering if anyone who has made the move from permanent to contract work could give some hints and tips on their experiences.
======
aneth4
Simple: Get a client.

As a developer, there is lots of demand. People will ask to hire you. Politely
decline and offer to contract. Eventually someone will accept. Then when they
want to hire you, politely decline again. Eventually they may even offer to
hire you at a fair salary, which you may choose to accept.

Keep in mind you need to be more than a developer. You are now a professional
with a private business, and you need to act that way. You need to be your own
boss, be accountable, communicate well, and hold yourself to a high standard.

If you are a cave dwelling developer who's bitter about managers and non-
technical people, you should probably stick with your salaried job.

I can't understand how a competent, experienced developer with basic
communication skills would have trouble finding contract work once they start
looking. That said, I've encountered plenty of incompetent or obviously lying
developers looking for contract work. If that's you, keep working until you
are competent and don't have to lie.

~~~
moakakala
You've advised "get a client" and "people will ask to hire you," but that only
works if people are already aware of you. What if you are unknown? Where do
you find these people people who will ask to hire you?

~~~
rcavezza
It takes time. My first accidental client came after a failed startup I was
pitching around NYC. Weeks after we closed shop, Someone asked if I knew a
developer who was looking for work on the side. I said yes, and I took on the
project.

If you are a developer, your friends should at least know that you are a
developer. Start from there. Giving talks at meetup groups is also a huge
plus. I think a key thing is that people need to know you do or are at least
looking for contract work. If your goal is to find contract work, I highly
suggest your linkedin profile list your job title as Freelance Software
Developer or something similar if your primary job doesn't monitor your
linkedin profiles.

------
TamDenholm
I did it accidentally without really knowing there was such a thing as
contracting. I was 19 years old, self taught PHP Dev and the highest salary
where i lived (Edinburgh, UK) was £22k. I had always wanted to go to London
and so i started looking for a job there. I got invited for an interview at a
place in London, went down, had already done a technical test remotely and got
told i had scored the highest overall in the test of all applicants (it wasnt
a hard test so i'm amazed they said that).

I got offered the job at the end of the interview and asked what salary i
expected. I hadnt a god damned clue and just pulled £30k out my ass thinking
that was a big ask even for London. In hindsight they probably would've given
me £45k at least because they bit my arm off saying that they'd happily give
me £30k with a raise of £5k in 1 year. I accepted and the HR person brought me
the contract, i started reading and got to a section i didnt like. It
basically said all code i produced both at the company and in my spare time
would be owned by them, i asked them to remove it, they refused and i walked.
BEST THING I EVER DID!

Coincidentally i had seen another job advert for a temporary gig elsewhere in
London the day before on a job board. After refusing the offer at the first
place at probably 11am, i walked to an internet cafe, phoned the advert, said
i could be there that afternoon, traveled across London, interviewed at
probably 1pm, got the offer at 3pm by phone, and started the next morning at
£250 a day, which was stupid money at the time.

I've been a contractor since and that was 8 years ago, i now charge £400 a day
and still do PHP work. PHP isnt cool, but i like it, it pays the bills and its
in high demand and ive got a pretty nice portfolio.

~~~
realtalker
what sort of experience did you have before you started contracting? I'm
surprised you were able to get a 250/day job as a 19 year old.

~~~
TamDenholm
I had a few freelance gigs and a small stint as a permie at an agency back
home but nothing near the kind of portfolio i have now. Luckily i was
interviewed by people that appreciated the fact that i taught myself and i
could demonstrate that knowledge.

------
dclaysmith
I recently stepped down from my fulltime position of 6 years. I picked up a
job fairly quickly and have work lined up through the end of the year. I would
recommend:

* Go to (and speak at) meetups involving technologies you work with. It's a great way to showcase your skills.

* Be charitable with your time. Be willing to meet people for coffee and provide free advice. These sort of meetings often directly or indirectly turn into work.

* Leave your company in good terms--they might use you as a contractor after you leave.

I would definitely recommend saving up 4-6 months of living expenses before
quitting. It gives you some flexibility in setting your rate and selecting
jobs.

~~~
lifeisstillgood
Saving 4-6 mths might seem like a dreamland only visited by flying pigs for
many. I would say that you spend at least two months _in control of your
money_.

\- have a spreadsheet of income and outgoings and update it weekly ( really
just download stmts from the bank works here). But go through it each time and
see if you can cut something

\- pay back your debt - know where it is, which is highest interest etx

\- sell stuff - declutger a lot

After two months you will feel in control and it will be a habit

~~~
Silhouette
_Saving 4-6 mths might seem like a dreamland only visited by flying pigs for
many._

Maybe that's a sign that contracting is not for those people.

Even if you're lucky, and you land a stable, long-term gig within say a month
of leaving your previous job and actually get paid according to your 30 day
terms, you're still looking at living off savings for a couple of months. If
that client, however honest and well-intentioned, turns out to be financially
insecure and fails two weeks after your first invoice goes in, you're probably
just another unsecured creditor who may not get much if anything out of them,
and you start the cycle again. Or you might have longer periods for your
payment terms, particularly with the more lucrative larger clients. Or you
might take a couple of months to find your first gig if you don't have much of
a track record or network yet. Or...

If you don't have enough financial security to survive for a few months with
no additional income, you should have no doubt that dropping a regular job to
go freelance is a big risk. Of course sometimes risks pay off, and if you do
land a well-paid gig quickly then once you've got an invoice or two under your
belt you can probably build that missing safety net quickly too. But sometimes
risks end in disaster, and if you've got kids to feed or a mortgage to pay or
other important financial commitments then you'd be brave/foolish to make the
jump without ensuring you have a plan B.

~~~
ownagefool
I'm a contractor from the UK and I tend to get paid weekly. This is common.

~~~
Silhouette
Weekly payments are certainly possible, but I challenge your claim that they
are common, at least in software development. It's just a personal anecdote,
but I have literally never seen it in my entire career, not in my own contract
work, not when any client or employer I worked with brought on someone else,
not even in a job ad on any serious contracting forum. Unless you're doing
either a lot of very short-term or fixed-price jobs, I would think the
overheads of sorting out invoices and tax records so often would make it too
much hassle for a lot of contractors anyway, but maybe if you're used to it
and have all the tools and shortcuts in place it's possible for some people.

Edit: Also, I'm talking about working directly with clients here. What goes on
with agencies or other intermediaries involved might be a different question.

~~~
ownagefool
I tend to work with agents. It turns out a bit more expensive for the clients,
but I'm garunteed to get paid, and it's often how I find out about the jobs.

Do you find direct clients from avenues other than word of mouth?

~~~
Silhouette
Fair enough, that probably explains our very different experiences then. As
you suggested, we generally do find clients via networking and referrals one
way or another.

------
jetblackio
Recruiters. I had a salaried job and was contacted by recruiters. They were
recruiting for a company that is about 50/50 salaried/contracting. Other than
that, nothing special.

One thing that I didn't see being brought up in the thread you mentioned is
the fact that a recruitment agency bills a rate different to what I get payed.
For example, my agency is likely billing out at $80/hour or more, yet I only
get $55/hour.

So I'm curious if others were entering amounts that agencies were billing out,
rather than what they were being payed.

~~~
nknighthb
> _my agency is likely billing out at $80/hour or more, yet I only get
> $55/hour_

Wait, what? Where are you? Please tell me you're a regular employee of the
agency on paper, getting benefits and not paying self-employment tax?

~~~
nopassrecover
Doesn't seem that far off what I've seen. Example would be $130/hr billed,
$80/hr paid to a contractor or $50/hr paid to a FT employee. We don't have any
"self-employment tax" though (beyond standard income tax).

Juniors on the other hand get pretty exploited in the name of "earning their
stripes" - I've seen a few accounts over the years of billing at $80-150/hr
and the employees getting $15-25/hr..

I think the local average for recruiters and agencies (usually one and the
same here) is 15% of first-year wage for FT placements, or $30/hr margin for
contract work.

~~~
nknighthb
Who is "we"? You're apparently in Australia, for example, which is of key
importance to understanding the numbers in your comment, because of both its
unusually high cost of living, its tax structure, and the provisioning of
social services.

If jetblackio is in California, he's getting ripped off (doubly so if he's a
1099 and/or pays any substantial amount for his health plan). If he's in
Wisconsin or Canada, he's probably doing OK. If he's in a country that doesn't
use a currency called "dollars" but he's incorrectly using the dollar sign
anyway, that throws everything completely out of whack.

This is why I asked where he is.

~~~
nopassrecover
Right, was just providing a point of context, although clearly forgot to
anchor it (Australia is correct).

------
JangoSteve
I'll give my experience in case it helps, but I'd start out by giving some
advice. If the reason you want to move from a permanent salaried position to
contract work is to make more money, don't.

If you don't want to read my advice and just want my experience skip to the
next section.

There's a reason contractors make more money; it's because it's a _lot_ more
work. The way I think of salaried employment is that it's an exchange. The
salaried employee agrees to work for less than the market rate, and in
exchange the employer agrees to subsidize your down time. In other words, you
don't have to worry about constantly finding the next thing to do just to get
paid. You get to focus on the work.

You'd be amazed how much work is involved contracting. You must go to
networking events and startup meetups constantly for years in order to build
up your identity. You must actually create your own portfolio website and keep
it updated. You must keep your LinkedIn and Twitter profiles updated. You must
do your taxes and send out W9s to each of your clients every year and follow
up with them if they don't respond (and then talk with them more when they
send you forms that don't match your records). You must meet with a lot of
people and talk about their projects before figuring out that only 50% of them
are even relevant to what you do, and of those maybe 50% actually get to the
quote/estimate stage, and of those maybe 50% become paying contracts.

I'd say, when I was just contracting to support myself, maybe 50% of my time
was billable; closer to 75% when I actually had a big contract that could keep
me busy for a few months without worrying about lining something else up right
away. So, if my billable rate was $100/hr, my effective rate was closer to
$50-$75/hr. And then here in the US, taxes would take about 30%, so closer to
$35-$45/hr.

On top of all that, you can never count on the work you have. You may have a
need for X hours per week to sustain yourself, but that doesn't mean your
clients will require X hours. They only need what they need. And being a
contractor, what you need is officially not their problem. Of course, you
could always work out deals with clients that guarantee X hours per week, but
they'll only agree to it if they think they actually need more than that, and
as soon as they stop needing it, they'll end the contract.

You could be living the high life with one awesome client, your bread and
butter, for months or even years, and then suddenly wake up to an email saying
they no longer need your services. Maybe the project they had you do is
finished. Or they decided they were spending enough with you to justify a
full-time employee to do it in-house. Or maybe the CEO of the company just
found out his nephew does programming, and he can do it instead of you. Maybe
their decision to cut you is a good decision for them. Or maybe it's a really
bad decision that you can't prevent them from making. Doesn't matter. All that
matters is that, as of this morning, you now have no paying work.

I could go on and on, as these are only the most pertinent warnings that come
to mind. Hopefully I've sufficiently scared you. Cool. Now here's how I did
it...

\--------------------------------------------------------------------------------------------------------------------------

First of all, I started contracting way before I needed to, just because it
was fun, and it served as a way for me to get paid to learn how to do what I
enjoyed and to become better. For years, I'd get up at 5 or 6am, go to work,
come home around 5 or 6pm, make dinner, and work on my own projects until 2 or
3am. Having built your own projects is by far the best way to convince the
first few clients to actually pay you (once you've done enough networking to
meet them). I'd estimate I spent probably a couple thousand hours building my
own projects, or building things in-kind for friends and family before getting
someone to pay me straight up cash. I did this from the time I was a freshman
in college to the time I was a senior (full-time student + job + side
projects) before getting a paid contract I think, and then continued to do it
for another year or so after college.

You may not have this problem if you're already salaried doing the same kind
of work that you want to do contracting. I, however, was a mechanical and
electrical engineer who wanted to build software. WIthout a relevant degree or
official work experience, I had to teach myself and build stuff. After a few
years building my own stuff, I also started doing a _lot_ of open source work.

Eventually though, I had to start charging. This was hard. I started out, as
anyone, low-balling some projects. Hopefully you only do that once or twice
before you realize how unsustainable it is. Once I realized this, I started
asking for more. I remember how guilty I felt at first, as I couldn't imagine
that some site I could build would be work over $1,000 (!!!). It's actually
funny to look back on it now, and realize how unsustainable even that was. I'm
glad I listened to the advice or others at the time and didn't insist on such
rates for long.

Like I said before, I continued to contract on the side, also spending tons of
time grooming my own portfolio website, building side projects, working on
open-source projects, and going to networking events (sometimes calling in my
paid personal time to go to really good ones during the week), for several
years.

I never considered quitting my job though until I knew I had enough work lined
up to make the same amount I was currently making at my full-time engineering
job. With student loans and whatnot, this wasn't really even an choice I could
make. At times, it felt as though this would never happen. I couldn't conceive
of a world where enough contract work existed that I could possibly line up.
But I continued (I think this is where a love for what you do plays a strong
role).

Eventually, through networking, I met someone who owned a web development
company, and I discovered the world of sub-contracting. They had a lot of work
and not enough people to do it. They wanted to hire me, but I knew I wanted to
contract on my own. So we worked out a deal with me sub-contracting, and they
could guarantee my at least 30 hours per week for the next 3 months. At our
agreed upon rate, that was enough to beat what I was making as an engineer. I
figured worst case was that I now had 3 months to find more work, and I put in
my 2 week's notice. That was the scariest thing I had ever done (and in fact I
wrote an article about it that became one of my first popular posts on HN at
the time: [http://www.alfajango.com/blog/if-youre-nervous-about-
quittin...](http://www.alfajango.com/blog/if-youre-nervous-about-quitting-
your-boring-job-youre-sane/)).

Once I was contracting full-time and setting my own schedule, I was able to
kick my networking into high gear. Meanwhile, my new friend's company kept me
on as a subcontractor beyond those few months. They actually ended up getting
a big client that insisted after a couple months that I was the only one who
could lead development of their project. Due to networking and word of mouth,
I ended up getting a few clients of my own, one of which was big enough to
sub-contract several developers myself. Thankfully by that time, I actually
knew some developers who'd do it, developers whom I had met networking and
working on open-source).

And the ball has been rolling ever since. I now own a company that builds
startups full-time. We are a sort of CTO + dev team for hire; or a software-
consultancy-meets-VC if you want to think about it that way.

It's much more awesome than my engineering job. So, I'm not saying don't set
off on your own. Just that it's a lot of work, and that none of it is
guaranteed to ever pay off. Right now, I'd say my team and I live comfortably,
but it's still a lot of stress day-to-day. If I had taken all that time and
effort that I spent to be able to contract on my own, and instead channeled it
into getting a better job, I'd probably have a lot more money than I do now.
But it wouldn't be what I wanted to be doing. That's the real reason to start
contracting, for personal growth.

In other words, it takes a lot of work to build a lifestyle as a contractor.
If you took all that effort and time, side projects and personal branding, and
channeled it instead as leverage to find a better job, that'd probably be a
much quicker path to making more money than contracting. So, I wouldn't
contract for the money, I'd do it because it's what you feel like you must do
to be happy.

 _EDIT: I should also note that, reading through some of the other comments
that say "it's as simple as getting a client, going to meetups, etc." I was
tempted to say that at first too. I sometimes forget how much time I spent
going to meetups and building experience before any of this really started
becoming "simple" for me. It's easy to look back on the past 9 years I've been
doing this and forget how much work went into each actual year, or how long a
year really is._

~~~
peteretep
It sounds like you're describing freelancing, rather than contracting.

~~~
JangoSteve
When you're starting out from a salaried full time job and asking HN how you
do contracting, they're the same thing.

If you already have clients lined up where you can do work as or within a
company without first freelancing, then you're probably not in HN asking how
to do it.

~~~
peteretep
No, they're not. You can get a contract role by talking to a recruiter or
going on a recruitment website, without any kind of online portfolio or
presence. For the freelancing stuff, you need to go through the dance you laid
out.

~~~
JangoSteve
I suppose that's another way to do it. But I can only speak to my experience,
and I admittedly don't have much experience with recruiters. I've never used
recruiters for either freelancing or contracting and I have a freelanced in
several years.

Edit: also, many of the other comments here were, get a client, not speak to a
recruiter, so this was somewhat a response to that add well.

~~~
Nursie
I think they also missed the background discussion.

In the UK, permanent salaries are very low compared to other english speaking
markets. Several people (self included) mentioned contracting. This is
distinct from freelancing in that it usually for a company running a project
but in need of some specific skills for a fixed time at a daily rate, rather
than asking you to make something for a fixed price.

I see them as distinct career paths, and I'm pretty sure the question was
aimed at this.

------
Sakes
MY STORY

1) Do good work for your current employer.

2) Left to do a startup full time. It stalled. (Still working on it)

3) Second job opportunity came along while I was full time on my startup.

4) Went back to original company first, negotiated contracting position

5) Went to second job opportunity, negotiated contracting position.

MY ADVICE

1) Do good work for your current employer.

2) Find second employment opportunity.

3) Negotiate contracting position with current employer

4) Negotiate contracting position with second employer.

* Every time you get a new client, try and charge a higher rate.

* Always do good work for your employer/client

THE BEAUTY

The beautiful thing about contracting is you have multiple revenue streams. So
if one stream is not providing you with the opportunities that you need, you
are always in a position to renegotiate or trade up. You never feel trapped in
a position. You'll also naturally gain a better understanding of what you are
worth as a developer.

THE PAIN

There is a learning curve to becoming a contractor. But once you learn the tax
system, automate what you can for time tracking, invoicing, and taxes, it is
not a big deal.

------
peteretep
Looks like quite a few of these replies are mixing up freelancing, and
contracting, which in London are very different beasts:

* Freelancing - you're getting paid to do a project, and the risk is all on you

* Contracting - it's a very well-paid office job with no security

I've done both, and the latter is much much less hassle, much much more
lucrative, with less freedom.

~~~
Nursie
Absolutely. Contracting is well paid, and basically sacrifices security
(largely an illusion anyway IMHO) for cold hard cash. So far it's been little
different to permanent work, but with a change of location, teams and
technology every few months.

I find it quite stimulating.

------
outericky
One other thing to take note of is depending on your relationship with the
client, it may take a while to get paid...

If you are an independent subcontractor (in the US - 1099 status), you will
likely be working through a middleman not direct to the client. So you will
likely get paid on a regular payroll cycle (most likely).

If you incorporate yourself and work corp to corp (preferable in my opinion),
you can sometimes work direct with the client or still through a third party.
However, you'll end up billing them on a likely monthly basis on net 30 terms.
So you bill them at the end of a month, and they have another month to pay
you. So you may go 2 months without any compensation...

And don't forget the various insurances you'll need (at least in the US;
errors and ommissions, liability, possibly workers comp).

~~~
djKianoosh
I have two clients at the moment. One pays monthly, 30-45 days after invoice
and sends me a paper check. The other pays me twice a month, 15-21 days out
(weekly time submission), and it's direct deposit. Like clockwork. You would
think it shouldn't make a difference but I can tell you that it does
absolutely make a difference. It's just professionalism.

You're right also about liability and workers comp, though I believe every
state is different. Some states are more friendly to small businesses of
course. So it makes sense to get yourself an accountant, especially if you
calculate the amount of hours it would otherwise take you to do that work.
Those are hours you could be working.

------
revorad
Jacques Mattheij (jacquesm on HN) wrote a good series of posts on contracting,
which might help you - <http://jacquesmattheij.com/blog/categories/consulting>

Here's the HN discussion - <https://news.ycombinator.com/item?id=848370>

In case anyone is interested in getting more useful resources on a regular
basis to improve their contracting chops, I'm starting a weekly newsletter for
freelancers. Sign up here - <http://freelancers.getgini.com>

~~~
bdunn
FYI your newsletter has the same name as mine: <http://freelancersweekly.com/>

~~~
revorad
Woops! That was totally unintentional. I'm not attached to the name, so I'll
change it. I love your newsletter, and mine will hopefully be complementary to
yours.

------
pyre
I've seen this recommended:

[http://www.kalzumeus.com/2012/09/17/ramit-sethi-and-
patrick-...](http://www.kalzumeus.com/2012/09/17/ramit-sethi-and-patrick-
mckenzie-on-getting-your-first-consulting-client/)

The advice seems pretty generic to me, though. It's useful if you have a
specific specialization like SEO or marketing, because it's easy to take than
and turn it into, "how I can improve your company/bottom-line." On the other
hand, someone that is just a general developer with no particular
specializations probably will have to spend more time coming up with a pitch
for themselves.

------
readme
You can do contract work if you want. It's what I do. Like others are saying
it is harder. In the UK, I am not sure, but here it means you're responsible
for more stuff. We have to buy our own health insurance policies or go
without, for example. I'm sure you'd have to save your own taxes, instead of
withholding. If you've never done that before, I assure you, it's really hard!

The contract rates are higher because they are paying for the: fact that in a
few months you have to find a new job, so you're being compensated in advance
for that, fact that there won't be benefits, fact that you are going to do a
lot more work than a regular employee..

So, what's the good thing about contracting: Freedom. At least in the US, a
1099 employee can't be told: when to work, where to work, what to use for
tools, etc. In practice, they can still ask you to "agree" to these things up
front, but compared the level of control a regular employee is encumbered by,
it is much less. This is US specific, not sure what the UK law is.

You get variety. Some people like the experience of working with lots of
people and companies.

Finally, I guess the advice piece: you'll only be able to live off contract
work if you are absolutely fearless and totally independent. You'll have to
interview/find clients a lot. A client meeting is a bit less scrutinizing than
a job interview, but you'll have a lot more of them, and your success will
depend on finding work _often_

~~~
nicwise
He's in the UK. We have health covered. He would have to have liability
insurance tho, but it's not expensive (£300/year)

~~~
readme
lucky :)

------
peteretep
I ... just did it. Handed in my notice, and started looking for contracts.
Jobserve is a good place to look. Find people contracting in your field, or
places that hire contractors, and ask them which agencies they use. You'll
always get a better rate outside of agencies, but they'll get you started off
nicely. You'll make more if you start a limited company, but start off with
someone like <http://www.giantgroup.com/> to ease you in to it the paperwork.

~~~
hackerboos
How many years experience from graduation would you recommend before 'taking
the leap'?

~~~
peteretep
How good are you? I started contracting at 22, but had been programming since
a young age, and could back it up. If you think you'll be one of the top devs
at most places, you're probably ready, if not ... You'll be one of these
contractors complaining they're out of work half the time! :-)

~~~
john_flintstone
Sorry, but I don't agree with that at all. You're propagating the myth that
contracters are supposed to be shit hot developers, the 1%, and that's simply
not true. While it might be true to a degree in the US, it certainly isn't in
the UK. Most contracting positions in the UK are for bog standard .net / Java
developers doing grunt work, not hit-the-ground-running/take-over-the-project
developers. An average/reasonably-ok developer with 5 years experience is
fully qualified to contract in the UK, and shouldn't expect any serious
downtime.

~~~
Nursie
That gives me lots of confidence because I am a hit-the-ground running type :)

------
petepete
I contracted for 3 years after my previous employer made the mistake of
putting all their eggs in one basket. Simply posted my CV on the various job
sites, sent of a few applications and took a few short Rails/Python bits and
pieces, then was lucky to get a couple of longer term ones. I recently went
back to permanent after I was made an offer I can't refuse. Already feel a bit
claustrophobic, I'll have to see how it pans out.

------
nicwise
I think a lot of people, especially @jangosteve, mistake freelancing for
contracting.

I've been in London for 6 years, I've contracted for 5 of those (architect
position at the BBC was "only available is it was full time". In hind sight, I
shouldn't have taken it). I've been out of work for a total of 6 days in 6
years (took a week to get a contract after a 3 month holiday). I started my
first contract within 6 days of landing in the country (nothing prearranged)

Freelancing is when you go from short term contract to short term contract, or
you quote/bid for work. They can be 2-5 days a week, for maybe a month or
less. For that I agree you need to pimp yourself like @jangosteve says,
because you are moving so much. You are basically a 1 (wo)man consultancy.

I don't do this (except for my "on the side" mobile stuff). Too inconsistent.

But if you are a back-end dev (or front end, just to a slightly lesser degree)
you can stay in the same place for _years_, or until you get bored of it. 3-6
months is a normal minimum, at least in the .net space which I'm in.

Unless you are useless. Then you're likely to get turfed out quickly.

Where I am at the moment, I've been there for 3 years (nearly). Last place I
was there for 2 including some as a full timer. I've done moonlighting (apps,
websites) at the same time. One of the guys I work with has been there for 8
years. I'm sure HMRC should have something to say about it, but no one is
looking.

I'd normally want to move on after 2, just to keep fresh, but I do the same
with FT jobs.

I'd be very hesitant about taking a FT position anymore. You can be fired with
1 months notice, and you get 4 weeks holiday, and maybe 75% of the wages _with
tax removed before you get it_.

Contracting, I get no notice (this has only happened once when the customer
literally ran out of money), but usually 28 days. I don't get paid if I'm
sick, but I keep myself healthy and allow for 2 weeks sick and 6 weeks holiday
a year. I have insurance to cover if I get REALLY sick.

I usually take closer to 8 weeks holiday a year. Sometimes between contracts,
sometimes during them (usually during, but not at the same time)

For me, contracting is an easy way to work. The paperwork overhead with a
system like freeagent is TRIVIAL if you have a half decent accountant (cough
mine is great cough maslins.co.uk). Make sure you have a bit of a buffer in
case you DO have issues getting work or a client pays late (if they pay late
consistently, fire their arse)

So: 1\. Get a limited company, and a good accountant 2\. Get indemnity
insurance (you need it anyway) 3\. Get used to being called by recruiters who
you'd like to slap with a fish 4\. DO IT

~~~
Silhouette
_I think a lot of people, especially @jangosteve, mistake freelancing for
contracting._

The way you're using the term "contracting" is not the way everyone does. What
you're talking about is short-term, fixed-term contracts, and otherwise sounds
a lot like disguised employment, and as you mentioned HMRC might have
something to say about that if they had time. However, there are plenty of
other models for contract work that don't have the structure and limitations
you described but are still clearly contracting rather than employment.

~~~
ayers
_The way you're using the term "contracting" is not the way everyone does._

Different locations refer to contracting differently and this is part of the
issue when people talk about contracting and freelancing. You need to work out
the location in which they are referring to.

In London and the UK this is indeed how people use the term “contracting”.
London has a whole market built around “contracting” the way nicwise
describes.

~~~
Silhouette
_In London and the UK this is indeed how people use the term “contracting”_

It's how _some_ people in London and the UK use the term and how some of their
contracts are set up. But plenty of other people would also describe
themselves as "contractors" despite having a different kind of contractual
arrangement, and since no-one has some magical authority to define the term I
think your generalisation is unfounded. If nothing else, a lot of boundaries
have been deliberately blurred since IR35 came along, so the whole permie vs.
contractor distinction hasn't been what it used to be for at least a decade.

------
eftpotrm
Honestly, no different from how I got permanent jobs; I sent CVs to recruiters
and talked to them on the phone. Since then I've been obsessive about building
up my contacts book to make sure I can get proactively in front of them as and
when I want to, but renewals have come in enough that it's not been needed
(though probably available from August - if you're looking for an MS stack guy
with heavy SQL in the UK Midlands from then, mail me on
greg.webb@alpinered.co.uk).

Honestly - the grass isn't as much greener as you might think. It's more
hassle, less security and holidays suddenly become horrendously expensive. But
if you fancy the lifestyle and think it's for you, give it a try. It doesn't
have to be any harder than permanent employment to get into our stay in (if
you use umbrella companies and are good enough), it does have its benefits and
if it doesn't work out, go looking for permanent work again, enough people
switch between them that you'll be fine.

~~~
ronaldx
> less security

Depends a lot - if you have one or a small number of big clients, you probably
have slightly less security than full-time employment.

If you have a large number of diverse clients, you have tremendous security -
even if some clients drop your services, you can easily manage this.

Not being dependent on one person's whim or one company's solvency is awesome
job security.

------
usujason
I just did this 3 months ago and I agree with aneth4, it's always best to
start with a client if you can -- just be careful that you aren't violating
any employment agreements you have with your current employer as you go after
that first client.

One of the biggest fears I hear from people looking to make the jump is "I
can’t take the risk to get started."

This one stops a lot of people from making the jump from full-time employee to
freelancer but you can do things to minimize your risk.

Depending on your current employment agreement, you may be able to do some
moonlighting in order to build up a client list before you make the jump.

Get a part-time job to help pay the bills.

Or, just do what I did, take the leap with confidence that you will quickly
sign a few clients and get things started.

For me, the most important part of freelancing has been my network. Make sure
you are continually making connections. Ask for clients for referrals or
recommendations. Word of mouth of your network is going to be the best
marketing you can buy.

------
um304
I am planning these days to leave my full-time job and switch over to
contracting. Since I don't have any real experience, so my thoughts might be
irrelevant, nevertheless, I would like to share a few things I learned from
other successful contractors in my area.

1\. Don't do everything. Find a niche, something that you are good at and stay
focused on it.

2\. Before signing up for a project, make a guess how successful it will be.
Having successful projects in your portfolio will help you grab new projects
more easily.

3\. Try to get initial projects through your personal network. This might help
both parties develop some initial trust.

4\. Favor longer projects over shorter ones.

5\. Don't charge for the all of the project at once. Divide requirements into
milestones, and invoice the client on completion of each milestone.

You may agree or disagree with points above, I would like to learn what you
think about them.

------
Nursie
Worked in various software jobs for about 12 years, including about six years
at big blue, two of those were in Australia.

Decided to move back to the UK, quit my job, registered a limited company and
basically started to apply for any and all suitable contract roles from
various job sites. Agents got my cv and started calling. 3 weeks later I had
my first contract. 3 months later I quit it and got another.

My advice - don't wait as long as I did, but do be prepared to go two or three
months before you get a paycheck. Also be prepared for a lot of useless phone
calls about the 'perfect permanent role', which you're not interested in
because yuck, perm! More advice on demand, but I'm only a year into this game.
Would not go back.

------
andrewtbham
I worked at a contracting firm for 6 years. that network of people has helped
me stay employed as an independent contractor for 7 years. a lot of them have
gone on to other places and email when they need contractors. always be
networking. keep up with people on linked in and go to networking events to
stay in touch. i also had a partner for the first few years so our networks
helped each other out. network with other contractors, they are a great source
of leads if they can't do a job.

also, the key is to get long term contracts. in seven years i have only had 8
clients. i usually go from one to the next. that is key to not have a lot of
"bench time"

------
tibbon
I actually started my career in programming by contracting.

A friend at my coworking loft needed the prototype for a project made. I told
him I had no clue what I was doing, but I'd give it a shot and he said he'd
pay me.

The prototype was super rough, but it was sufficient for him to raise money
on, and 4-5 years later its still rocking. And I was off to doing
contracting/freelance after that.

Really for contracting I find you've either got to get yourself in with a
consulting/design company who will hire you hourly, or be incredibly social
and just network your ass off. I've rarely had consulting gigs that were
because of some random email online- almost always people I've known.

------
mark_l_watson
I got into consulting/contracting about 12 years ago when my wife and I moved
to a very small town in the mountains, about 2.5 hours from the nearest large
airport. I transitioned to remote consulting work because going on business
trips is painful when you tag on 5 hours of round trip driving to an airport.

Here are a few things that help me in my business. I write a lot, mostly
sharing small bits of code that might save people some time; offer free
mentoring help (limited to 1 hour); some open source projects. BTW, the
mentoring has not lead to any business (nor is it meant to), but it is fun.

------
yesimahuman
I built a rough prototype of a developer tool I planned to sell that got some
interest from consulting companies. Since we weren't making enough revenue yet
but I was full-time at a normal job, I figured going into contractor work
would be a nice transition to going full-time on my company, plus the hourly
rate was about 2x what I was doing at my full-time job. They seemed happy to
have me help them out for a bit.

It worked pretty well and I only had to do it for a few months, but I learned
I don't really care for client work.

------
adrianscott
I made the move from salaried to on-site contracting to startup co-founding,
and am now doing remote contracting and/or part-time cofounding (heard that
term yesterday :).

I got into contracting by applying for a contract in the SF Bay Area from
Florida, did a phone interview,received an offer -- to contract at Hewlett-
Packard. I believe I found the contract on dice.com, which also helped me find
other contracts. I already had experience building software for my parents'
company, and had built some of my own sites, including CGI stuff that I had to
pay $125/month for a shared account for, back in those days! I didn't realize
what my market rate should be on the first contract. I then got recruited away
by a startup to help build the first online yellow pages site. HP asked to
make a counter-offer but I (foolishly) didn't let them. After some time at the
startup (which later turned down an acquisition offer from pre-IPO Yahoo,
doh!, and finally basically shut down), I returned to contracting, this time
to Schwab. Then I did some freelance, and then returned to help the same group
at HP for a short-time. Then contracting at Bank of America. Then a short
contract for a web dev shop, and then got into angel investing (Napster), and
co-founding startups (social networking pioneer Ryze).

Now several startups later, I've returned to a combination of remote
contracting and/or part-time co-founder (heard this term yesterday :). Some
companies I've helped on a cash basis (hourly/weekly rate). In many cases, it
is combination of cash plus equity. I'm just wrapping up a contract where I
built out the server and dev-ops infrastructure and code for a new startup, as
well as helping w/ analytics, product, etc. (and where I continue to be a
senior adviser).

My experience has been that the on-site contracting market in the SF Bay Area
is quite efficient and dynamic, and networking is not necessarily needed.
Although I did a lot of networking in the early days, which has been great in
opening up opportunities over the medium/long-term, the networking was not a
factor in getting leads for on-site contracting. However, it led to some
resume bullet points that may have been helpful in landing some of those
contracts (e.g. landing the BofA contract was helped by my experience coding
some of the first Java applet ads for Symantec back in the day that was a
freelance project that came from networking).

------
orangethirty
Realize that the move to contractor will depend on your ability to sell your
services. Before anything, I would start marketing and then focus on making
the jump. Don't quit without doing so, because your marketing could take
months to start working (relative to your skills at doing so). If anything,
read my profile.

------
mbesto
Assuming you're based in London, feel free to get in touch and I can give you
a run-down about how it works here in London. (details in my profile)

I've been in and out of consulting for myself, for large companies (SAP for
example), sub-contracting, and developing. Both in London and the US. Happy to
help guide a fellow HN'r.

------
Sindrome
1) Quit job to start a startup with a lot of savings. 2) Met lots of people
networking for my startup. 3) Startup failed. 4) People start asking me to do
projects for them because they noticed how much I hustled when I was doing my
startup.

------
reinhardt
I'm also in the exact same position and would be very interested to know how
to get into remote/telecommuting contracting.

------
davewasthere
I worked overseas for three months for my last permanent job (back in 2007),
and really enjoyed the flexibility of being about to avoid winter. But since
that was a one off (and I was sort of planning on moving country), I quit that
job... then put some feelers out for possible contract work. And for the past
five years I've been completely busy with that.

I'm a full-stack, jack-of-all-trades sort of dev. Bit rubbish at design (but I
have a great designer I partner with when needed), but I do a bit of
everything, from infrastructure, networking, database, middle tier and front-
end html/css/javascript. Any specialist in any of the above will wipe the
floor with me skills/wise. But I'm pretty comfortable communicating with
clients and helping get the best bang-for-buck with them only having to
basically describe what they are trying to achieve.

My key bit of advice would be to fire difficult clients and only work for time
and materials. If a client is too high a maintenance, you may not be a good
fit for them, or them for you. In that case I try and transition them
elsewhere, recommending someone that may be a better option.

Equally, fixed prices quotes are almost never worth it in my experience. I'd
rather release early and often, then the client can then see how much business
value they've gotten for XX amount of hours/money. After which, they can make
the decision to either continue or to terminate, depending on whether they
feel they're getting value or not. It's normally a completely different way of
working for most clients, but I often offer a two week shared-risk starter
deal to ease them into it. If it doesn't work, I'll absorb half the cost and
we'll call it quits. But so far, every relationship seems to have worked out
well.

The biggest downside is possibly taking time off. I'm pretty flexible about
timings. I'll work when clients need it, and take breaks during slack periods
(of which there haven't been enough). But my ex wasn't supportive of me having
to work while on 'holiday'. It wasn't a lot (no more than 20 hours over a two
week holiday), but YMMV depending on how understanding your partner is/isn't.

As far as transitioning goes. Try sounding people out for possible side
projects you can do while keeping your day job. I worry that I'm not a good
networker, and that one day the work will completely dry up. But on the flip-
side, I kind of want that to happen, so I can focus more on projects that I
want to do myself. And it's hard to do those when you've got paying projects
to do. But if you can pick up a couple of side projects, once they're earning
almost enough to live off, you've no excuse to pack in your day job and do
that full time. I've got a couple of mates who started contracting this way.

Unless you mean just straight out contracting... as in, apply for a typical
contract and work there.. just like a day job. In which case, it's a piece of
piss... just start applying. But I find recruiters(pimps) rather distasteful
to go through, so I've avoided them completely. (There are good ones, but
they're few and far between)

Good luck!

------
andrew_wc_brown
how's it even hard to go to contracting? I always make twice as much as I
would working a salaried job.

------
dschiptsov
Become a known expert in what you do.)

------
j45
I started contracting when I was 19 and have never looked back. The only jobs
I worked were from age 12 to 19.

I outlined how I did it a little in a post yesterday:

<https://news.ycombinator.com/item?id=5805627>

This is two brain dumps in two days, maybe I should be putting this on a blog,
apologies if that's more appropriate. Apologies for typos or grammar, I'm
writing this in one pass before heading out.

To dig into the comment about finding your first customers.....

My formula, which I recommend you consider trying some or all of (and has
worked for friends making the jump):

\- Keep your job. You are not here to learn developer skills, but business
skills. You will build up your part time income to take over what you make
full time. Too much work? It's probably a fair comparison to how much work
getting and fulfilling contracts will be until you get the hang of it so dive
in. Just be prepared to work more to have the flexibility to do what you want.
There are some incredibly insightful tips in this thread overall, especially
the few at the top.

\- Business skills are something you will be learning forever, like coding.

\- The first business skill you need to learn is value. Then, creating it, in
a reasonably sustainable way that you can then start to rely on.

\- The second business skill you must do is come to some sort of working peace
with money if you have any issues with making it or issues with what your
professional value is. I regularly bully/coach friends into business for
themselves and can be available to give you a few words of advice. For me,
it's becoming like credits in a video game to do other thing I want on top of
interesting and meaningful work. I do some tougher work that pays better, so I
can spend time with a startup or idea I like at a discounted rate, or put in
more time than normal where you like.

\- My currency is respect and customers who know it get way more from me
without me being able to help myself. The ones who don't seem to filter
themselves out. This may or may not be for you but whatever it is for you, the
sooner you can get a sense of what it is, and develop it forever, the easier
you'll have a compass to know if something is right or not.

\- You're welcome to dive in to beat the statistics, but you will stand a
better chance if you start freelancing and slowly building it up by finding
long term customers.

\- SMB's want one guy to shoot. They don't care that it's the server's fault,
the isp's fault, a bug in the code, or a bug in the platform or framework.
They want the one interface who is like a department or interface to them to
get that wing of their business sorted out. They'll be ok if you find someone
and manage them for cost + 10% if they don't want it.

\- The more they think of you when they have problems that need solving, the
more you'll end up having long term customers for 4-10 years like I have. I
don't say yes to all the work, sometimes I help them hire, sometimes I help
them find a vendor, sometimes I hire the vendor for them and train them,
sometimes I sub them out under myself, it totally depends on the situation, my
availability and interest, but bottom line is I'm paid well for my time to
figure it out for them and monthly retainers become that much more valuable to
them

\- Many small to medium businesses may not have a full time position, but have
enough to afford $500-$1500 a month. Either this work needs to be right up you
alley, or trivial for you to do and deliver effectively and consistently. It
might be a technical retainer, or a certain amount of bug fixes, or features,
etc.

\- Don't have an ego. I started doing networking, IT support, fixing printers,
and then once I did the six month "network stabilization" the customer
naturally turned to software support. I wasn't above doing anything. If the
computer needed to be cleaned out from dust, I did it. That attention to
detail is what one day had me doing the replenishment orders for a billion
dollar retail company on a weekly basis by analyzing what they sold in the
past week and what they should try the next week as an experiment.

\- I'm a full stack guy though and it helped me a lot get in the door to fix
something trivial or figure out something finicky and after I did that, the
relationship was great. Being that person that came in and took care of a
small thing that was important is a great way to get in, most of my referrals
came this way too because business owners like showing off their people to
other business owner buddies. I recommend you be as full stack as your honest
interest allows. Along the way you will find the things that you love more
than others, and I lump them into necessary evil (complex hosting hosting the
projects I build) vs what I love (building the software that never goes down)

\- It is far more preferable to find 10 customers who will pay you $1000 a
month (that's 100 hours billable at $100/hr) than to look for all of it in one
place. If one dies, changes, or disappears, you won't sink. Chances are you
might find 4-5 customers that pay $2000.

\- Deliver monthly summary reports of the value you provided. Number of
requests, what you solved, what you looked into on your own initiative,
savings you helped create or increase, money you helped them make, etc. Attach
it to the invoice every time. It's the only permanent record you'll have when
you look back in 4-7 years.

\- One thing that didn't exist as much 10 years ago was remote development and
remote access. PCAnywhere was the king and it helped me learn how lay down a
remote developer life with visits in person as needed. What I did was to offer
not to bill customers for travel time, or a minimum on-site bill and instead
charge them by the quarter or half hour if they'd let me work with them via
screenshare (if it was necessary). It's a fair trade with the right customer.
Be open to learning how well screensharing as needed can work for you.

\- As you're starting out, reach out to small and medium size businesses like
yourself. They like the one on one, "I'm dealing with someone like me"
approach. They should not balk at expecting to pay $500 to $1500 a month for
something they need, or to have you on call.

If you want help crafting such a pitch, I can help you. I have helped friends
learn to win small contracts on CL, etc, and work their way up. I believe that
there's some level of business skills you learn here that here that are hard
to learn anywhere else. Once you know you can make a relationship and deliver
value, possibilities can open up.

Hope some of this was useful or at least interesting, if anyone has any
questions, feel free to get in touch.

------
jdhendrickson
I recently started a company providing contract system administration work,
honestly the first contract was a reference from when I was working for salary
and word of mouth caused it to spread from there. I think the key things to
think about are as follows.

0\. Do some market research, what does your competition charge? What do you
offer that they don't? If you don't have a way to differentiate yourself how
can you package what you offer to make it seem better than what they are
offering, if you can't dazzle with brilliance baffle with bullshit.

1\. What do your customers want? You know what they need, but what do they
want? Designers often seem to design to impress other designers, programmers
enjoy pulling neat hacks that other programmers admire, and system admins love
building cool stuff that integrates some of the latest automation, but are
these things what your customers want? If it is great! Just make sure to gut
check yourself when you put together what services you offer to make sure you
aren't just following your own fantasies of what you wish work was like. Now
that you know what they want figure out how to sell them on the cool stuff you
enjoy doing as well as long as it doesn't get in the way of the initial goals
they have. Yes you may know better than them in regards to what they need in
some respects but they know their business case better than you, if you can
meet in the middle you will get plenty of referrals.

2\. Advertise, advertise, advertise. I used a combination of spotify ads and
google ad words initially. The number one thing to remember about adwords is,
don't lock yourself into just the keywords you think should work. Find out
what business people would type into google when searching and target those
words.

3\. This is something a lot of people might disagree with but, I over book
myself, not to the extent that the work suffers but to the extend that my work
home life blurs and it's mildly stressful. You never know when a client might
flake out and having that cushion will save you when your clients nephew takes
a course on youtube and thinks he is now a $your_job_here. I make my money
over a 6 month time period and then take 6 months off. I have a much closer
relationship to my children and my spouse and over all I'm much happier, the
ability to travel is really nice as well.

Keep your main revenue stream until you can at least get a few paying clients
then shove off but remember you will need to think about health insurance if
you are in the U.S. (I infer from the title you are in London) if you do have
to worry about insurance and are in the U.S. you can look into
<http://www.freelancersunion.org/> consider it leverage when buying insurance.
Also keep in mind there is significant overhead from book keeping I was
shocked at the number of hours it took, I said screw it and automated the
whole process.

Also keep in mind they can pay contract workers so well for a few reasons,
it's results based, they don't have to pay for insurance or other benefits,
there is no training budget involved.

Still it's the best decision you can make, you are your own master though and
it feels amazing.

Good luck!

------
danbmil99
quit (or get fired)

