How to be a successful IT contractor

Having worked with hundreds of contractors over the years, the Company Bug team have identified many common characteristics that separate the most successful contractors from the rest.

Contract Work

• Keep in touch with other contractors and past clients, and use sites like LinkedIn to network with ease.
• Create a brief CV, and highlight your key skills on Page 1. Include a covering letter in all cases, as the role you really like could be handled by an agent with a penchant for the more personal approach.
• Create an online resume with the major social networking sites (such as LinkedIn), and follow specialist agencies who are using Twitter more and more to advertise the latest contract roles. Google+ may be the next network to watch.
• Take care when posting online in general using your real name, as recruiters are increasingly scanning the web for information about prospective job candidates, so try not to be indiscreet when using online forums and similar sites.
• Make a good impression at interview, and spend time finding out about the prospective client’s organisation.
• Don’t be afraid to negotiate your initial or renewal rate. Successful contractors will assess their relative bargaining power according to a number of factors including the competition for the role, how much the client needs their services, and the amount of commission the agent is willing to cut.

Tax and Finances

• If you are a limited company contractor, always appoint a specialist accountant who will be well versed in the particular needs of contractors.
• Remember that if you become a company director, you are ultimately responsible for the accuracy of your accounts, and for ensuring that all statutory documents are submitted on time. Read up on company accounting basics as a bare minimum.
• Always put aside any Corporation Tax, VAT and self assessment tax liabilities into a separate bank account.
• Make sure you have sufficient retained profits in your company before declaring dividends, otherwise they will be illegal.
• Make the most out of online accounting software where possible – you can save a lot of time and hassle compared to paper-based systems.

IR35

• Have all your contracts examined by an employment status specialist specialist.
• Ensure that your working practices match the terms of your contract, and where possible get a confirmation or arrangements letter drafted by your client.
• Act like a real business – create a business website, order business cards and stationery, and print professional-looking invoices.
• Take out IR35 insurance to cover the cost of representation, and even back taxes, depending on the type of policy you take out.

General Tips

• Be discreet when discussing your income with other colleagues, particular permanent staff.
• Become an ‘expert’ on your project team, and become indispensable when renewal time comes around.
• Don’t be shy of investing in training – you may command a higher rate if you possess the latest, cutting edge skills or qualifications.
• You must be prepared to take contract work which isn’t a perfect match in terms of skills required, job interest, or location.
• Keep on good terms with all of your clients and colleagues, and don’t burn your bridges. The contracting industry is relatively small.
• When times are good, be prepared to let an average opportunity go by, if you are confident that a more rewarding offer is in the making.
• Consider joining business groups such as the IPSE, which provides a wide range of benefits including legal cover, and networking opportunities.
• Keep up-to-date with the latest news via industry sites such as ContractorUK, where you can also find IT contract jobs.