Tag Archive | "CV"

Back to the drawing board with the electric pencil again


Start the year as you mean to go on. Not a bad maxim, of course. Except that I’m starting with the prospect of being out of work at the end of the month. Not, I hasten to add, that I hadn’t seen it coming; the current gig is to fill in for a full time guy who’s been off on a specific project that he has now completed and is returning to business as usual. So no hard feelings. Honest…

Obviously I’m not all that worried; if you want to be a freelance you know that you’re going to finish contracts and you plan for it. There’s money in the corporate war chest so just focus on finding the next exciting opportunity and move on.

Except for an awful lot of contractors, it’s not that easy. These are the ones that don’t understand the risks of IR35 properly, or who have always worked in a world where IR35 is hanging over their heads. Quite rightly they take the low risk option and either declare themselves inside IR35 or work through an umbrella (or, if you’re a real hero, one of the strange offshore things…). That means you take out all, or almost all, your income as taxed earnings and leaves you with no reserves in the company to tide you over. And that is one of the hidden but very real negative impacts of the IR35 legislation; Cameron wants a vibrant, flexible economy but insists on cutting off its base material at the knees.

Then again, I am slightly appalled at the number of contractors who blithely accept they are IR35 caught in the first place, usually quoting conditions that we disposed of years ago. It’s not like there isn’t a huge amount of material out there but too many seem happy to roll over and pay taxes they probably don’t owe in the interests of a quiet life.

Their decision, obviously. But it does irritate.

The other side effect of finishing the gig is that I’ve had to take notice of the recruitment trade again. Never something I enjoy. The first step is to dust off the CV of course. I’ve already seen a couple of roles that I know are within my range and experience so a quick cover letter and attach the latest edition and sit back and wait for the phone to ring.

Which it hasn’t. Bugger…

So back to the CV with a more critical eye. It’s not a bad one in terms of things achieved, though I say so myself, but I re-read it properly and I have to say it needs a bit of work. It’s kept up with the recent contracts I’ve done, but I have been lazy and not re-engineered the whole thing, simply adding on the last contract each time. As a result, it’s all got a bit unfocussed and a couple of years too long. So this weekend it’s back to the drawing board with the electric pencil and re-write the thing to tell the world how good I really am.

Let’s face it; there aren’t that many roles out there at my kind of level that are close enough to home to make them feasible, and there are an awful lot of good people on the market. So the CV has to fill two completely different roles in one document; tick all the boxes that the “recruitment consultant” (for which read ex-sporting goods salesman turned sales researcher) thinks I can do all those funny things that the client absolutely has to have while being literate enough to persuade someone who does know what they’re doing that I know what I’m doing. But hey, I write stuff for a living, ranging from complex technical analyses to fully architected service designs to this blog, so how hard can it be? Well, actually, pretty damned hard. Wish me luck!

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2012 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Voting Screen – Cartoon by DonkeyHotey

Posted in alan's blogComments (0)

Time to change the world of recruitment methinks


You have to laugh, you know. I never cease to be amazed at the number of posts I see about contractors claiming all sorts of problems with, variously, notice periods (don’t need them, as I’ve said before), IR35-safe contracts (fine as long as they represent reality), the AWR (don’t start me on that one again) and the infamous opt out from the Agency Regulations (opt out if you can but it makes little real difference). Plus, of course, the running complaint about the agency’s percentage of the contractor’s rate: except, of course, as ony fule kno they don’t get the percentage, the contractor does.

However there is a common theme to these various complaints. The agency.

We have to be fair to the poor agents themselves though. Increasingly they are run by accountants targeting sales figures and maximising margin. Little details like serving both sides in the contract have zero relevance to their business model. The individual agents are given achievement targets and so have no time for the niceties if they want to pay the mortgage. And of course it is much more cost effective to employ minimally experienced drones to handle the phones and use software to do the pattern matching between CV and job description.

All of which is fine if you’re dealing with a commodity market like general development, operations and service management roles. But it’s a serious problem for all sides if you are a little more senior, or have niche skills in some area or another. Or even if, like many, you aren’t a specialist in any given field, just a good, solid all-rounder who can make a success of any contract they’re given.

In effect you start from scratch every time you need a new contract. No matter how good you are, you still have to get through the auto-pilot box-ticking recruitment business we have these days. The one that says the agent gets a new role then stands there waving a piece of paper in the air to see who might be interested: usually several hundred, often hopelessly under qualified people on average. The signal to noise ratio in recruitment is actually appalling. How much cleaner if he had the resource to hand when the role comes in.

So how do we change the paradigm (see, I can do business speak as well…). The answer is surprisingly obvious.

The contractor pays the agent, not the client. Shock, horror…

Seriously, it would work. I have many skills but selling isn’t one of them, nor is cold-calling to find work (actually that’s just cowardice, but the result is the same). So why not outsource that part of the business to someone who does it for a living? The agent goes to the client with a zero margin deal. The contract would have to be B2B and, legally, you would have to be opted out of the Agency Regulations, both of which would appear to be good ideas. You know, solid in business indicators, no IR35, no AWR, no secret upper contracts…

There would be no hint of you being anyone’s employee either, since you’re at the top of the contract, not the bottom.

The agent would have to know who you are, what you can do, what you are worth and what your history is. He would be able to sell you actively and be incentivised to find you repeat business, since that’s where his margin comes from. He could specialise in given areas and build up a stable of people with the relevant skills, or he could be the one to fill the awkward jobs from his knowledge of his customers.

Best of all, you set the gross and the agent gets the percentage.

So what’s not to like? If you’re big enough and strong enough to build and justify a working reputation, and be able to be sold into an open market, why not go for it? I’d happily pay for that level of access and support, which has to be better than fighting your way to the top of some disinterested minion’s in tray to get noticed.

All we want is a couple of good agencies with the courage to bite the bullet and disregard the way they’ve always done it.

Ah. That might be a problem. Anyone know any brave, risk-taking agency FDs…?

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: SmiAl – Sad by Al aka pintofeggs

Posted in alan's blogComments (0)

How to bid for freelance work in a fog of ignorance


Have you ever thought that contracting is about the only job where you have no idea how much you should be charging? You go for a job, you talk to the agency advertising it (assuming you can find them at their desk…) and you have a two minute chat about the work required. With a bit of luck (and some smart questions) you will know where the job is based, roughly what’s to be done and what the agency believes the key issues are (there’s always issues in my experience!).

What you don’t yet know, usually, is who the client is and quite probably not even what their line of work is. That’s because if the agent decides you’re a waste of his time, he doesn’t want you calling the client and offering your services directly, so he’s only protecting his own business.

But on the basis of this rather minimal information you will be asked how much you would charge. And that’s where it gets difficult.

Personally I have a clear idea in my head about what I would like to charge. The answer, oddly enough, is not “as much as I can” although that is certainly one of the parameters. I know what I need to live and I know my routine overheads, so I can work out how much I need to earn a year to pay the mortgage and keep the dog in biscuits. Working on the assumption I’ll probably work seven months a year (OK, that’s a bit low, but I’m getting lazy in my old age) I can set a base day rate.

To that you add the cost of getting to the job. Daily commutes are either so many miles at 40 pence per mile or the rail fares. Staying away I usually cost at £100 a day (slightly more in the Smoke, but that’s usually commutable). Either way I add that amount to the day rate; while I do an all inclusive deal for my labour, I also aim to recover all my costs.

Finally I add a fiddle factor, based on the seniority of the role (it costs more if I’m managing people, for instance) and something I call the risk factor, which reflects how hard the job is going to be and how much damage I could do if I get it wrong. Then add 15%: after all, I aim to make a profit at the end of the day.

So then I have a base price. Sadly, so does the agent, driven by what the client tells him the budget is and his own margins. If we’re really lucky the two will coincide. If we’re even luckier, the agent will be willing to beat the client up to what I want, since he gets more money that way as well. These days, though, that’s increasingly unlikely.

One problem is that the clients have a very clear idea of what they want to pay, Unless you are a serious specialist, there is very little chance you can name your own price any more. Most clients have a rate card of their own which they use to cost their own internal budgets: it’s a brave manager who will deliberately put in an overspend on his own budget. Then there are the companies who have no idea, who set the budget by dividing the permie’s salary by 260, who set the rate stupidly high – councils are good at that one – or even do a kind of Dutch auction, asking for three CVs and saying they’ll take the cheapest (oddly enough they are also the ones wondering why their delivery record on projects is so poor…).

Of course it would be good if we could delay the rate discussion until the interview stage, but that would expose the agent’s margin which would never be allowed. Or we could go in with a per diem and a percentage share of any resultant savings or client income growth depending on the role. (Someone I trained did exactly that: offered to do a job for 10% of the first year’s savings then proceeded to save his client £2.4 million…)

But at the end of the day you are having to bid for work in a fog of ignorance. This probably explains why my rate now is usually within 10% of what I was on 15 years ago when I started out.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited<

Image: vector scuba diving by ?ukasz Strachanowski

Posted in alan's blogComments (0)

My new year resolution


Is not to lose weight (a lost cause, I fear) or cut down on booze (shudder), but something that’s far better for the heart rate: to stop being get annoyed with Recruitment Agencies any more. I will try to see them as being more like my dog; smart by the standard of his peers, keen to do well but not really sure how to achieve it. The reason being that having cunningly avoided the worst of the snow by being terminated three weeks before Christmas – serve me right for delivering the project early! – I start the New Year looking for the next challenge.

This means I’m back in the commoditised world of modern agencies, where speed is of the essence and box ticking is the required skill. And that is why most of the time my 30-odd year career is being assessed by someone with a job history measured in months and that has successfully managed to avoid any contact with IT at all. Still it’s not their fault, so no point getting worked up about it, is there?

One positive thing I have done is to get my CV reviewed by a couple of people who know about such things. I thought it wasn’t too bad, to be honest, and followed all the usual recommendations, but clearly not. Nobody said so explicitly but I got the feeling they all thought it a bit clumsy, a bit wordy and just a little unfocussed. Come to think of it, that describes me pretty well so what’s the problem…

Anyway, it’s had a revamp and it’s being rewritten to suit each role I’m applying for to ensure I’m highlighting the relevant bits of my skills. And it seems to be working. I’ve even had agents call me back on receipt, which is almost unheard of.

It’s also encouraging that there seem to be a lot more jobs out there right now. Mind you, every single one is demanding that you have a million year history in their business and nobody else need apply. That’s fair enough in finance, which is a world of its own, and some of the regulated industries, but quite often it is a terribly blinkered way of looking at it.

The worse culprits are the Public Sector. These are organisations that are looking at having to make savage savings, they need to get the best value from every penny they spend, and they need to explore all sorts of alternatives to survive the year.

So what do they do?

Firstly, they outsource their recruitment to people like Commensura, who are very good at supplying standardised bulk skills like cleaners at minimum effort (and usually minimum rate), but hardly appropriate for finding a specialist. Then they offer some frankly mad rates, either way under market rate or well above it. Then worst of all they exclude everyone who isn’t already in a Public Sector role. Which I think is unforgivable.

Think about it. One of the key things they can do is to share services, consolidate common functions and infrastructures and even outsource some areas so as to minimise overheads and maximise economies of scale. That is not a trivial exercise, and it’s not something that most public bodies have really tried (there are some notable exceptions, of course). So why do they think they have to disregard people with extensive business knowledge in this area and that have made it work, simply for doing it in industry. Apart from having to understand the dead hand of OGC procurement policy – which is easily learned in a day or so – those people are exactly what they need. But will they hire them? Nope, let’s stick with people who know all about how we work now and nothing about how we can work better.

And going back to the professionalism of the average agency. I just got an email from one of the big ones. Do I fancy applying for a Help Desk role paying £15 an hour on a three shift system in North Yorkshire? I may have to think about that one….

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited<

Image: Just the Grocery List by KTVee

Posted in alan's blogComments (0)

Bring on Utopia


I finished last week by saying that we really need to start to think about how the contractor recruitment market needs to change if we are to get away from the commoditised, one-size-fits-all, dystopian model we are currently stuck with. That model works quite well for the recruiters but it’s not helping a lot of contractors and perhaps also isn’t really helping the end clients. Time for Utopia perhaps?

First though we have to accept that the contractor market – or at least the IT/Telecoms market where I work – is increasingly split into two discrete areas. One grouping – probably the largest by far – contains all the bulk, generalised but still important skills. The other grouping is rather more varied, and contains people who have either specialised or senior skills (or both!).

For the former group the current market does actually work. Well, it does if you ignore the increasing pressure to offshore such roles. The only real problem is the old one of persuading the agents that these skills are actually transferable across industry verticals, but let’s not get too optimistic. Generally speaking these guys don’t have that much of a problem assuming there’s work for them to do.

However the other group present a different challenge, the one I was talking about last week. Too often these are the guys who get stuck because the agents don’t know who they are and what they can do. The ones where keyword matching has little effect and who have to pray the agent has enough wit to read and understand their CV.

So how do we persuade the agents that these guys need a different approach and need to be sold proactively rather than hit and hope?

How about they pay the agent rather than the client? Just like actors do already? “Ah hah!” I hear you cry, “You can’t charge work seekers for finding them work”. Well no, you can’t, that’s enshrined in the Agency Regulations. But what if the Agency Regulations don’t apply? Say, for example, by the worker (and their company) opting out of the provisions of the Agency Regulations altogether? Then the agent stops being a work-finder and becomes an outsourced marketing operation

So how does that help?

For one thing, the better the agent knows the contractor, the more likely he is to be able to sell them when an opening appears. When filing a new role, rather than waiting for the right CV to appear through Jobserve – along with two hundred useless ones – he will have a stable of good people and will be able to suggest one (or two) to the client right away. Also he can go to the client with a zero margin offer. Also he has to look after his contractors for a reasonable cut of the gross and keep them fed with work or they’ll simply go elsewhere. The more high-value contractors you have in work, the more money you make – but without the tedious rework and box-ticking that goes on at the moment. You might even specialise in a given discipline so clients look to you first when they need someone special.

Of course there are agents out there who work that way at the moment (albeit charging the client rather than the contractor) but they are rare beasts. The increasing use of sites like LinkedIn to bypass the agency by a lot of senior contractors says to me that the agency model as is does not offer them the right support and marketing. This kind of change is desperately needed.

Snag is, the average agency is too risk averse to try it. Utopia may have to wait a while. Heigh ho…

Alan Watts can found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: San Miguel Strong Ice Beer by Roro Fernandez

Posted in alan's blogComments (0)

Everyone’s an expert


Another frustrating week in the hunt for the next contract. It’s clear that there is still a fair bit of work out there for the taking. Sadly it’s also clear that there are an awful lot of people out there trying to take it and competition is very strong. But it seems to have had at least one side-effect; you must only apply for a job if that’s the job you’re already doing.

You can accept that if the role is in say Finance, then clearly you do save a lot of issues taking on someone who already works in Finance, since they would know the regulatory and business environment. Actually it turns out an awful lot of openings are in Finance since the only people with the money to spend are the banks. Wonder where they got it all…

Anyway, I digress. Taking someone already in an industry vertical, while frustrating to the outsiders looking in, is quite understandable. However, the market now sees to be taking this to a whole new level which is what causes the frustration: no matter how good you are at what you do, if someone doesn’t want you to do exactly the same thing for them that you’re doing now, then you have a problem.

I’ve talked before about the whole agency candidate-finding process being reduced to a box-ticking exercise in an attempt to get the flood of applications down to manageable levels. This also saves them a lot of money themselves of course, since the bulk of the work can be delegated to fairly junior researchers who don’t actually need to understand the role or the candidates.

So getting a role is now totally dependent on what it says on the CV. And that is where it all starts to go a bit wrong.

If your CV is to stand a chance it has to be a very close match to the original requirement. Sadly, however, with the laziness of the average agent, a lot of the job specification doesn’t make it to the advert; probably takes too long to cut-and-paste it in to Broadbean or whatever they use to set the adverts up. Given a career history like mine that is pretty wide ranging, I then have to work out which bits to highlight in the first page summary on my CV – no agent bothers to read the detailed job history any more – to stand even a vague chance of getting past the first filtering process at the agency, never mind getting passed on to the client. And if the advert misses a key bit of information, then you fail at the first hurdle.

As an example, I put an application in yesterday evening and around midday today I finally got to talk to the agent about the role. Too late! It seems the role was largely about recovering a programme of work that was not delivering and needed a total shake up. “But you didn’t ask for that, and as it happens that’s what three of my last four roles were mostly all about, fixing and successfully delivering broken projects” I pointed out. One of which, incidentally, was worth around £250 million.

“Ah but”, was the reply, “You didn’t state that explicitly so I didn’t pick it up. Sorry, but I’ve already sent in all the CVs I’m allowed to”. End of conversation.

So there in a nutshell is why good people are sat on the bench. This whole market needs a different approach. And that’s something I will talk about next week.

Meanwhile, anyone need an expert is anything?

Alan Watts can found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Experts Only by Ross Mayfield

Posted in alan's blogComments (0)

Let’s hear it for the cat herders


It’s been a fairly quiet week this week. There’s been nothing to get me throwing things at the TV or harrumphing over my breakfast newspaper. This is good in a way, of course, especially for the sake of the TV set, unless you have to try and find something interesting to write about…

There has been some good news, of course. The economy is still shaky but from my reading of the runes, it looks like it is slowly heading in the right direction. Although it won’t take too much to throw it all off course again.

One good thing was the PCG winning not one but two prestigious awards from the Trade Association Forum. One was for the revamped website, which has gone from being something of a logistical and visual nightmare to something really very slick. The other was to PCG’s Managing Director, John Brazier, who won the Leadership Award. This was in recognition for the work he has done in getting the PCG to where it is today (and which John sees as a reward to the whole team). Organising an association that is 99% independently-minded freelance contractors – you think I’m bad, you should meet some of my fellow members – was once described as being like herding cats. Clearly John and his team are now fully qualified cat herders.

Also, running on the back of the Coalition’s aim to reduce net immigration, a new consultation has been kicked off. This one is looking at Intra Company Transfers, and should they be in the scope of the overall cap on immigration figures.

This is actually something of a tricky one. Clearly the influx of comparatively low-skilled IT workers, brought in under ICT Visas in preparation for moving swathes of UK-based work out of the EU, is not something we want to perpetuate. On the other hand, you have to accept that companies do need to be able to move skilled specialists around the world. Plus, of course, it’s not all about IT and engineering; the reach is far wider, from medical staff to trained Thai chefs.

So an interesting challenge to come up with an fair solution. The survey can be found at the rather snappy website, surveymonkey.com (I guess they won’t be in contention at next year’s awards…). Please take a look if you want to contribute to the debate.

Meanwhile I’m still on the hunt for the next contract. I’m actually getting calls back from people and there are certainly more jobs out there than there have been, but it’s a slow old process. And a frustrating one; too many agents seem to have lost the ability to read a CV and relate it to a real job these days. If I have to answer seriously inane questions like “How many years as a Project Manager have you done?” one more time I’ll not be responsible for my actions.

Then I was promised two call backs from people promising to take a more proactive approach to selling me to the clients, rather than waiting for the right job to come along. You know, a bit like agencies used to do 15 years ago. Needless to say, neither has been in touch.

Actually the agencies themselves understand the current system is rather sub-optimal (to say the least). They are increasingly turning to networking sites like LinkedIn to find people. This, if you’re a bit of a dinosaur like me, leads to a degree of a culture shock. I’m really not too sure I can mix it wiv da kids in da cyberhood, man, innit.

Still, nothing ventured, nothing gained. Looks like I have some work to do!

Alan Watts can found found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: 3 Cat Cupcakes by clevercupcakes

Posted in alan's blogComments (0)

Looking forward, cautiously…


Been some rather contradictory stories in the press this week. Nothing new in that I guess, but it does make guessing what the job market is going to do a bit tricky.

There has been an unexpected drop in the numbers claiming Job Seeker’s Allowance, which is welcome news. Except that someone immediately countered that by pointing out a lot of people are taking on temporary or part time jobs. OK, but they’re still back in work, even if it is at a reduced level.

Then we get someone else pointing out that there are increasing numbers of economically inactive people out there. These are the ones who haven’t got a job and are not claiming benefits. And if you look at all the figures and not just bits of them, the actual shift in new people in work is tiny – around 7,500.

All in all, not a reliable way of seeing what’s going on…

What does seem to be clear is that work for freelancers is likely to increase as more and more companies realise the recession is bottoming out and get back to work. The PCG think the same if you read their latest press releases, that companies are turning to us freelances to get things going again. The general thinking seems to be that companies will still be nervous about the future so use temporary people that can be dropped if the economy goes back into reverse. Which it may, according to some (presumably) competent observers, who think we may still have the promised double-dip recession.

It’s a bit like climate change really. Two sets of experts taking the same data and coming to contrary opinions about what it means.

So let’s use a rather more empirical method. If I run a search for contracts available for my skill set, I see considerably more than I did before Christmas. Which sounds like good news. Or is it – a lot of them are in finance or public sector, which didn’t really suffer too badly anyway. And there still aren’t too many development roles, most are concerned with business as usual stuff. So how many of these “new” jobs are actually from agencies trawling for CVs in case the job market really does pick up? Which means there might not be as many jobs as at first appears: they may even be less.

All in all, I think I will simply wait and see what happens. That way, I can’t be accused of getting the forecast wrong!

© 2009 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: ( B ) positive by place light – flying not physically

Posted in alan's blog, newsComments (0)

8 ways to start up as a freelance contractor


Choose a Name: The name has to be unique, obviously, and not likely to be confused for someone else’s existing name. The best reference point is the Companies House website – www.companieshouse.gov.uk – which has a simple search facility so you can check your chosen version. Also, try to avoid names that are specifically related to your line of work, just in case you want to change careers later: imagine selling cars though a company called Al’s Bakery.
Decide on Share Ownership: Is this just you, or you and your spouse, or you and two or three other people? This is important, because it defines how to allocate the Ordinary Shares In the company. Dividends are paid in direct proportion to numbers of shares held. A husband and wife typically have 50% each, for example, but if one is already earning money, be aware of the impact of the share income on their tax position. Share allocation can be changed after the event. There are several variations on share management; but for anything other than a simple allocation of ordinary shares, get expert advice.
Register at Companies House: There is an online system you use to set up your company and pay the registration fee. It is fairly simple to use. One question it will ask is who the directors are. For a typical small contractor company you only need one but there’s no reason not to have more. Although not strictly necessary any more, it also helps to nominate a Company Secretary: this could be the same person, but it’s more sensible to have someone else, a partner or relative for example.
Register a Memorandum of Association: Something else to do while you are at Companies House. At its simplest this is a document describing what your company is for and how you wish to run it. You can do it yourself, but the document can have legal implications in a tax investigation so do some online research for a suitable template from sites such as www.simply-docs.co.uk or www.clickdocs.co.uk.
Set up a Bank Account: This has to be a business bank account. Banks are increasingly wary of new business accounts, so you will have to answer some detailed questions and it will help if you have some professional references and a signed contact to demonstrate you actually will have an income.
Register for VAT: You have to do this if your annual income is in excess of a set amount (currently £67,000 pa) but it Is advantageous to register anyway. VAT and the Flat Rate Scheme are discussed in more detail elsewhere.
And that’s it. It sounds complicated but is in fact quite straightforward. You can also take the easy way out; either use a company formation agent, or there are several accountants who specialise in contractors who will set up all if the above for you for a small fee, or even for free, as well as providing expert support. Finally keep track of all your various expenses setting the company up, since you can reclaim these once you start trading.

The first thing is to think about why you want to go freelance. While permanent jobs are increasingly unreliable, the one certainty of freelancing is that you will be out of work at some point and you won’t have a formal support structure around you to help out.

Although, of course, that is exactly the way many freelancers prefer it. So having decided to go freelance, here are the steps you take.

Understand the Freelance Business: There are many good guides to freelancing out there, such as the one on the PCG’s website. Read as many as you can find so you understand what it is you’re getting into. You will be amazed at how much you don’t know, from expenses to the Opt Out.

Prepare a CV: A freelance CV is different to an employee’s one. You are only selling skills and achievements.  Career progression is now of minor interest, and details of education, hobbies and interests are largely irrelevant. Keep it focused and concise; it is your primary sales tool so spend time getting it right.

Resign your current job: Unless you are very lucky, it is difficult to get a contract if you have to serve out a notice period. Bear in mind you have no history as a freelance, and are in competition with people who can start tomorrow. You should build up as big a war chest as you can then take the plunge. You will have to survive a while with no income; even if you get a contract straight away, there will still be a delay before some money comes in so make sure the mortgage is covered.

Get a Contract: This is the really tricky bit. If you have a network of contacts, you may be able to find something by yourself, but mostly you will be using agencies through websites such as Jobserve and the like (there are around 1200 on them on the web these days). The basic process is find a job you genuinely can do, send in a tailored CV emphasising the key points for this job, then follow it up with a phone call. Be prepared to repeat that process many times

Decide how you will get paid: In reality there are two choices. You can use an Umbrella company, where you become their employee and they look after all the payments and taxes for you for a fee., or you can set up your own limited company If you’re using agencies, you almost certainly can’t work as a sole trader. Umbrellas are safe but expensive, Limited Companies are not that difficult to run but do require more work and decision making from you.

Get an accountant: If you are not using an umbrella, get a good accountant that understands the freelance business properly. They will be an invaluable source of guidance until you have enough experience to do it yourself; and even then you should still consider using one.

Get your contract reviewed: You should do this anyway, but if you are using your own company you have to pay attention to your IR35 status. This is discussed in another article.

Do the job: Sounds trite, but you are as good as your last contract. Do it well, don’t abandon it half way for something “better” and remember that you are the expert or they wouldn’t have hired you.

© 2009 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Baby by gabi menashe

Posted in mortgages for contractors, set up a companyComments (0)


  • Switch Accountants for FREE

    Switch Accountants for FREEAt K&B Accountancy Group we have introduced a simple and straightforward approach to changing accountants. We’re offering contractors, consultants and freelancers the opportunity to switch to K&B Accountancy Group for FREE without the need to pay for any ‘catch up’ or retrospective accountancy fees for the previous year’s accounts and corporation tax return* *T&Cs apply

our top 5 twitter posts

twitter

contractor accountants

contractoraccts



twitter Join the conversation
Free Telephone Advice