Independent Contracting: How to Get There

The concept of self-employment is appealing for many technologists, but the path to getting there isn’t always clear. Independent contractors may cite several attributes of their work that they find preferable to traditional employer/employee relationships. The allure of money is obvious, but independents may also be drawn to project variety, an emphasis on new development over maintaining existing projects, and additional control over work/life balance.

Independent contracting has historically been a trend primarily among the more senior and advanced in the profession, but today it’s not uncommon to hear intermediate or even junior level developers in pursuit of independent work. Often the decision to become an independent isn’t premeditated so much as it is circumstantial. A lucrative contract offer is hard to refuse, and once a new level of compensation and freedom is reached it is difficult to accept a return to lower salaries. These ‘accidental contractors’ sometimes find themselves wholly unprepared for what skills and knowledge are required to build and operate a sustainable business.

Many seem to think that technical strength is the difference. Technical skills are clearly part of the equation and in unique situations superior skills can trump everything else, but many strong developers have failed as independents. Those that are thinking about exploring the independent contractor lifestyle in the future should start considering the topics below well before signing any contracts.

Communication skills – Independents need the ability to acquire clients, either through direct interaction with the client or through a broker/recruiter. Once a client is made, maintaining their business will depend upon clear communications regarding expectations, schedules, delivery, etc. Using brokers can help those with communication or social skills issues.

Varied skill set / independent learning / research – A skills inventory with some variety (languages, tools, frameworks) is fairly common with successful contractors, although advertising an unrealistic variety will hurt credibility. Independents have more incentive to invest off-hours learning new skills and keeping an eye on trends in the industry.

Comfort with interview process – For those in the salaried employment world, one great interview can result in years of work. Depending on contract durations, independents can find themselves in some form of interview several times a year. Anyone hoping to be successful in contracting must overcome discomfort or anxiety in interview settings.

Relationships – Successful independents usually know (and are known to) a number of people spread across various employers. Senior level contractors may have developed hundreds of relationships over time without any targeted networking efforts, while younger entrants will likely need to reach out to strangers. A lack of professional contacts is a barrier to entry for junior technologists and will negatively impact sustainability for senior contractors.

Basic sales – Advanced sales skills are unnecessary, but an understanding of what a close is and learning a few different ways to close will be helpful.

Basic marketing, brand management – Contractors have a brand, though many don’t think of it that way. Independents should pay attention to making their brand more attractive. Speaking engagements, tech community leadership, and publication/blogging are a few ways to increase visibility and potentially become a recognized authority.

Focus on billing – Independents become frustrated when they realize that running their small business is more than just writing code. Taxes, insurance, contract review, time sheets, invoices, and expense reporting eat into time that would be better spent as billable hours. Successful contractors try to maximize billable time and often outsource (or automate) tasks when possible.

Negotiation – When using a broker it is customary that they handle negotiation with the hiring entity, but an independent will still need to negotiate rates with the broker. A sum as small as a few dollars per hour quickly adds up over long client engagements. Negotiations for salaried positions can be easier due to the number of components that a company may be willing to adjust (salary, bonus, stock, etc.), but for contractors the negotiation is almost always a single figure.

One comment

  1. fredstluka

    Dave,

    Good article! I always tell people that a successful independent
    consultant needs 4 things, even to work with an agency like yours
    or the other agency I’ve used:

    1. Competence/Marketability

    You must be competent in currently marketable technical areas like
    Java, SQL, .NET, Web, XML, JavaScript, Ajax, etc. If you don’t
    have the right skills, they can’t place you at a client, so you
    don’t make any money.

    2. Confidence

    You must be confident enough in your own skills and your own
    marketability that you will sleep well at night when the end of
    a contract draws near and you haven’t yet been renewed. Some
    people are happier in a more “permanent” situation. Take into
    account the confidence of your family also. Don’t cause them to
    lose sleep.

    3. Training

    You must take the right attitude towards training. As an employee,
    I worked in the current technology, and assumed my employer would
    train me in the next technology in time to use it on the next
    project. As a consultant, I bill the client hourly for time spent
    working in the current technology, and I spend my own non-billable
    time learning the couple of new technologies that I am most likely
    to need on my next project, at the same or a different client. If
    you don’t enjoy learning new technologies on your own time, this
    is not for you.

    4. Financially conservative/responsible

    You must be financially conservative and responsible enough to
    build up a large enough cash buffer during the good times to carry
    you through the bad times. When I first started, the economy was
    great. Then the job market got tight in 2001 or so. Fortunately,
    I worked at the same client from 1999 to 2004, in a role where my
    value was constantly reported, by the client to its own senior
    management, in terms of how many millions of dollars my software
    was saving them. By the time I chose to leave that client, the
    economy was booming again. However, not everyone was so lucky.
    I know a lot of consultants, even some at this agency, that went
    unpaid for a couple months during that time. It helps to build up
    a cash buffer as quickly as possible during your first assignment,
    if you don’t already have one.

    –Fred Stluka
    fred@bristle.com

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