Fixed term contract...? Heads up

[sdd]

I have been approached by an recruitment agency offering me a fixed term 1 year contract on an engineering project?

Having not worked on this model before, any pitfalls I should be wary off?

My biggest concern is the 1 year part.

Thanks in advance.

[Frikkenator]

So you're basically a contractor, nothing scary there! Contractors usually earn considerably more, but have no perks (i.e. medical aid, travel, pension fund). The difference in pay more than makes up for it though.

If you take the position and you like it there, make sure to chat to them after about 6-8 months to see if they want to renew your contract. Otherwise make sure you have another contract lined up after the 12 months.

[Mike Smit]

Go for it. I moved into contracting in 2006 and never looked back.
As mentioned, you do earn more. Quite a lot of you have decent experience to bring to the table.
In all this time, I was only without work for 3 weeks. This was because of the recession and clients were getting tight on budgets. Savings got me through though.

I currently have 3 contracts. They started as 3 or 6 month then just keep getting extended. If you perform well, the clients will renew.

[sdd]

Thanks guys.

I have been in permanent employ for more than 20 years so the move is a bit daunting for me.
I have to research this whole thing a bit further, especially the tax implications, etc.

As you have mentioned the money is better and I can easily build up a savings pocket for the slim chance that I out of work.

Just to confirm: Do I calculate my hourly rate like this?
(Gross monthly salary / 21.67) / 8

[Mike Smit]

Thanks guys.

I have been in permanent employ for more than 20 years so the move is a bit daunting for me.
I have to research this whole thing a bit further, especially the tax implications, etc.

As you have mentioned the money is better and I can easily build up a savings pocket for the slim chance that I out of work.

Just to confirm: Do I calculate my hourly rate like this?
(Gross monthly salary / 21.67) / 8

I was permanently employed for 16 years when I changed, and yes - it is daunting I was nervous for a few months. You get used to the change though.

As a contractor, I earn about 50% more than I would as a permanent staff member.
I also have a accountant that I pay about R900 PM to manage the finances and advise me.
Hope this helps you with working out your rates

[YingYang]

I currently have 3 contracts. They started as 3 or 6 month then just keep getting extended. If you perform well, the clients will renew.

Huh? How do you split your time up or do you work from home? If so in which field?

[Mike Smit]

Huh? How do you split your time up or do you work from home? If so in which field?

Software dev dude.
I sit on site most days, and put in hours in the evening. If too much to handle I use some of my own contractors to help out.

Depends on the client. Sometimes they want you on site, other times not.

[Sharan]

Software dev dude.
I sit on site most days, and put in hours in the evening. If too much to handle I use some of my own contractors to help out.

Depends on the client. Sometimes they want you on site, other times not.

How did/do you go about marketing yourself? What would you suggest for someone wanting to get into contracting?

[Mike Smit]

How did/do you go about marketing yourself? What would you suggest for someone wanting to get into contracting?

I started by creating a small website with just a few pages advertising my skills. I also came in at pretty low rates (around the same as a perm employee) and advertised that I only worked after hours.
Then while I had my day job I slowly built up with these little contracts. Pocket money basically. This was in 2004.

For 2 years I worked on small contracts in the evening and weekends, and had a normal day job.

In 2006 I had a large contract come along - work from home. That was my ticket to jumping full time in contracting and this is what killed my nerves. I did it anyway and resigned from my day job. It took about 6 months for me to settle down and get into this contracting thing.

The biggest mistake I made when I started contracting full time was I under sold myself.

If you can secure a full time contract for a period of a year this will help you to ease into it. Don't settle for less than this initially.
You MUST save though. Very important.

As mentioned above, you take care of your own medical, etc... I prefer it this way though. I don't like the companies to do it for me. I simply invoice them, they pay me, and I take care of all my own affairs.

[Fuma]

Make sure that you do not have too much debts and your spouse (if married) can support you when things don't work out.

It easier if you do not have too much financial commitments and single.

[sdd]

Its funny how when you open your mind to something (which usually you would never consider)so many opportunities suddenly crop up.

I've had 4 lunch requests in the last 2 weeks from agencies to discuss opportunities. It's been crazy! I respectfully declined until such point that my lovely wife and I decide that contracting is the way forward.