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6 THINGS YOU SHOULD CONSIDER WHEN BECOMING A CONTRACTOR

6 THINGS YOU SHOULD CONSIDER WHEN BECOMING A CONTRACTOR

6 THINGS YOU SHOULD CONSIDER WHEN BECOMING A CONTRACTOR

Life as a contractor can be very joyful, you manage financially by yourself and the sense of the freedom. You can have while being your boss. But the truth is that not everyone can be a contractor, but for those who move away from permanent work. The vast majority never look back. Before you choose to become a contractor, ere are 6 things you should consider.

Do your research

Before taking the first step to becoming a contractor, you’ll need to find out what’s the market for your skills. And what contract rate you will be able to command.

6 THINGS YOU SHOULD CONSIDER WHEN BECOMING A CONTRACTOR

Figure 1. Have detailed research before you decide to become a contractor

The best way to do this is by using powerful research tools on the web. You can also understand overall market strength by reading updates on many contractor industry sites and social pages. You’ll also get more of a feel for your earning power when you start researching possible contract positions and speaking to agencies and other contractors.

Don’t have any benefits.

Working for yourself with no organization gives you any benefit. You should forget the annual leave, health insurance, car park, or any other perk that might be coming with that stable, permanent role.

Yes, you can earn more, choose the project to work on and learn to take care of yourself.

Affecting your lifestyle

When thinking about taking a contractor position, the impact on your lifestyle, especially when you have a family. Should be one of the essential things you consider

Depending on the location of the job, the type of role, and the contract length (some contracts can be up to two years). You should consider it because your lifestyle can be different. And even some contracting roles might be outside commutable distance. If you have to live away from home, you’ll need to consider both the financial cost and the impact on home life.

Upgrading while being a contractor?

The hardest thing for most contractors is to upskill themselves and keep their skills relevant and sharp in a very competitive market. One of the negative aspects of being a contractor is that companies don’t want to invest in training for them. Because the contractor will leave when the job is done.

6 THINGS YOU SHOULD CONSIDER WHEN BECOMING A CONTRACTOR

Figure 2. You need to self educate when being a contractor

So contractors have to make time to continually progress themselves which is a further cost they have to carry if they aren’t able to get that exposure on the job. And if they don’t, they will probably do the same job with the same income or even worse, be ejected from the job market.

Are you set up as a limited company or use an umbrella company?

When you’re a contractor, all the benefits you used to receive as a permanent employee you now have to manage yourself. But using an umbrella company is one-way contractors can get help sorting all these issues. You pay them to handle things like tax, pension contributions, and holiday entitlement. However, obviously, all this comes at a cost, and the umbrella company could take it as much as 15% of your salary through their fees.

The other option for contractors is to set up as a limited company. Yes, you’ll take home more money, but you’ll be responsible for things like your own pension plan and submitting your tax returns. To avoid getting into trouble with the law, you may need an accountant to help deal with the financial and other important stuff.

Will you find your customer directly or through a recruiter?

It may seem obvious, but if you are not working through a recruiter and you are the right candidate for the job, you can probably take all your income that would have gone to the recruiter, if not all of it. 

However, if the opportunity has been brought to you by a recruiter and it is a job you want, you may need to be flexible on your hourly rate to be considered for the role.

But finding a job through a recruiter is recommended while you’re new as a contractor; they will help you find the correct position. But when you’re famous, have the trust of many companies, you should work with your clients directly, so you can take all the income you have.

Conclusion

Becoming a contractor is a significant business decision. However, it’s necessary to consider the various factors listed above to ensure it’s a decision you’re ready to make.

Source: Internet

Read more: ALL TYPES OF SERVICES THAT ACCOUNTING STAFFING AGENCIES IN HO CHI MINH CITY CAN PROVIDE

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