Many people get into contracting for different reasons. Some of those reasons I discussed in a previous post titled Guide to Successfully Working as a Consultant in the Healthcare IT Industry – Part One
However, what I see all too often are people deciding to leave the world of contracting because they are not able to master a few important concepts. If you can master these concepts, you can prolong your career in contracting and more importantly take yourself to a level only a few achieve.
So here are the three things you have to master:
Learn to budget your finances – This starts with making sure you are earning the right hourly rate for it to financially make sense for you to even consider getting into contracting. The right amount is an hourly rate, when multiplied with the reasonable amount of hours you can expect to work over the course of a year, that will pay for your personal expenses and commitments. Also, this amount should allow you to put money aside for your time in between engagements. With many contractors, part of the problem is that they do not receive enough compensation for contracting to make sense (given the amount of downtime they will have between projects). Also, for another group of contracts, they make great money, but do not save enough for the downtime. They are overly optimistic about how much time there may be between engagements. Because of this, some contractors deal with a level of stress in between contracts that could be avoided if they were able to budget for the downtimes.
Form alliances – It is really astonishing to me how many people are in contracting for 3 plus years and really do not have anyone to turn to that will go out and help them find their next contract. Getting each new contract for them is no easier than the first one. The reason for this is because they have never taken the time to form an alliance with one or two firms in the marketplace. If you don’t have anyone you can count on to find your next engagement, finding each contract can be like having to start from the bottom of 5000 foot mountain and climbing to the top. With a few alliance partners, the climb can start from the 3000 foot mark. If you want to have longevity in contracting, form alliances with a company where that can be a mutually beneficial partnership. This will certainly make things easier for you.
Create a client base – If you are good at what you do, people are going to want you back. The key is to get out there and do work for multiple clients so that you will eventually have a few organizations that will call you to do work for them. After you have been in contracting for 3 years, if you have had multiple clients, some of the clients you have done work for at the beginning should start to cycle around and have new projects starting up. The key is to develop a client base for yourself. If you have 2 – 3 client projects a year, you will have 6 to 12 clients you have done work for at the 3 year mark. Too many people I know have only been on 2 – 4 projects in the first 3 years. They like longer projects because they don’t have to deal with the process of getting a new project and they get comfortable with the places there are at. Although this can bring some short term ease, it really works against some of the concepts that will make and provide benefits of contracting in the long run.