Being a contractor or a full-time employee?

Working as a contractor versus regular employment?

I regularly see the fear about working as a contractor. Lately I was part of a discussion that started like: could it be risky for any subsequent 9-to-5 career? I strongly disagree: being a contractor is interestingly a warranty for me to find again a new job in case I fail as a contractor! In my opinion, it will indeed help most careers, as I an employer I would favor people that took the risk to try, whether they were successful or not. Contracting both provides and requires skills at the same time, more than any regular 9-to-5 job.
I feel like I can handle all sorts of professional blows, like being fired. And first of all, well, I will not be fired as long as I am my own boss! This is because I feel each day insured by varied and evolving professional experiences together with a growing professional network.

Here is a post about how I ended up as being a very happy contractor, after having been a state employee, a full time engineer in a small family-owned company, then in a stock-valued much larger company, then a CEO and a CTO in a start-up (silly names), and a very well-paid part-time employee in a startup... before I flew on my own in the naked simplicity of a contractor in a cooperative, with no mess.

Disclaimer: my experience is all in the so-called "new" technologies, but it may still help beyond.

My very nature is to keep on doing things I did not before. Call it curiosity, I do not know, but I do know it is very useful both for my work and for my pleasure. This is not optimally lucrative, as I do not stop much to try and monetize what I can do, e.g. with products of my own. But I join the two ends while I manage to fulfill my hobbies to a good extent (days are certainly too short to achieve that completely).

When I am asked the main difference between work and hobby, I do not say that work is paid, but that work has to be delivered. Hobbies can be put on hold indefinitely, which is a pity by the way!
Sponsorship is probably a very good thing that can happen to a contractor, but here again it may end up eating all your other hobbies. As for me, I would not like it for long periods, and I would highly favor co-operation (i.e. help to develop a product at no cost or so, and a client sells it, with royalties).

Things to know and value about being a contractor (in my opinion)

Here are the main points I would stress out. They come for my years of being a happy contractor and I would be glad whenever someone finds a few ideas or avoids a pitfall thanks to this post.

Check and assess your professional network first!

I would say that you must know if, when and where you may help companies you already know. I was already working for a decade in my city before I switched to being self-employed. I had a lot of contacts with tens of companies with my former start-up and before that, with my former jobs. It made me confident both about their needs and about my relationship with bosses and employees alike.

I cannot say how incredibly useful to have been on both sides of the fence and to understand all points of view. This includes: state employee "vs" private sector, bosses "vs" employees, small businesses "vs" large ones and so, which are all fake. The cursor, as always is in the middle of all this.

In fact I started my contractor work securely with a 3-month long pre-defined contract for a known client. I had a second one afterwards for an independent and friend of mine. It was much easier as it was for people and companies I used to work for or with formerly, so I did not have to feel the pressure to prove something.

For this same reason, I would say that moving to a new town is extremely harmful if it matches the time where you decide to be a contractor. Unless you are a really god marketing guy and know how to sell your work (I just do not, I let my former clients be my advocates!).

Working for remote clients becomes increasingly easy when your own clients tell about your good work to within their own network. Interestingly, I even once worked for a client I never ever saw (that was for a prototype of a payment terminal based on an embedded linux and a barcode scanner).

Don't be uselessly secretive: competition or cooperation?

Most startups are paranoids. They think others would steal their "intellectual property", but they do not realize they are exactly alike: their founders spent years ahead on they own idea and they have no time to steal the idea. And major companies will crush you whatever you do, unless you target the sky (as too many do, only to realize how much chance plays a role in the end).

I have the same attitude towards work as a contractor: I know a (few) contractors who may do some specific work that I could possibly do also (most notably, image analysis, since I no more do web development).

But I talk and I consider them as resources more than competitors, i.e. people I could work with. Many start ups and companies do not think about it. Some do, and I work with them, mostly by contracting their R&D under and NDA, so they do not have to hire me full time.

Some projects are just too big for one single contractor anyway. We even answer together to one complex proposal and we are friendly to each other. When I have no time for such a job, I would handle it to him. I guess he would most probably do the same to me. Once again: know the others and do to others as you would have them do to you, it is a win/win.

Now, I have many skills that he does not have, so I can work on stuff that he would not like nor can work on, and reciprocally. This is easier to handle than to consider he may be eating parts of "my" market. Good for him when he gets an interesting job :)

Be curious and be well aware of your skills

You need to be very conscious of your existing skills, and what you like to learn. Be as knowledgeable as you can, because it will help you know what you want, and it will give confidence to your clients that if something happens during the work, you will know how to deal with it, or where to seek outside help.

I also had work experiences that proved I could also develop software products on my own if I had no contracts, but I never took the time since!

Obviously it also depends on your skills and existing network.  If you are part of a large aerospace company and you design satellite positioning software, it may be harder to work as a stand-alone contractor... If you are a web developer, you will have to fight harder with competitors, and it will be harder to keep only a few clients as I do.

If I had to give only one advice to parents, it would be this one: teach insatiable curiosity to your kids and you are done with education. OK, you get the picture, respect to the others, to the nature and to self, or the joy to achieve a good result is as important. But curiosity pays so much :)

Be opportunistic, and pragmatic. Let things happen: future is unpredictable!

As I often say, contractors are not companies, at all. Actually, even very small companies are better opportunistic or they die. Business plans and market/prospective analysis are mostly to buy investors.

As an example, a colleague and friend of mine tried Angular JS, earlier than others and out of curiosity. He became one of the first google certified expert of this technology, and he is now teaching it all over France and beyond all year long. He did not even come to our cooperative with this job in mind, and he certainly can work on something else.

We all see opportunities one time or another. I would say it even becomes easy to provoke some with time. Reciprocally, who knows what the future is for independent contractors in new technologies?

I have no clue for myself. As long as it is something I still like, I am fine with it. It may be bee keeper, who knows (I have yet to wait to see them come and populate the box though).

Seriously, who knows what the world will be in 2 years? Admittedly, there are some amazing skills that date back to centuries and which will not change anytime soon. Non-technological jobs are less prone to changes, but so few jobs are not force-fed with technology nowadays!

Money is a wrong way to measure your happiness

I do not consider money as a good indicator, even though it is all around us. Keeping a so-so job in the same company for years always end in never-ending wage disputes between employees and chiefs. And when the company collapses, so many have money income as the first and prominent way to select their next job.

I love my work, and there is just no money that can buy this. Working on your own may or may not pay a lot. I guess it may be a pain, and sometimes I admit I hardly sleep.

But I get in touch with more and more clients ... and possible future employers! I see more opportunities than with a single long term contract with a single employee. I prove my value to would-be employers by my work as a contractor. Hence, being a contractor may also simply be a temporary situation and very efficient way to find a better job in the end, because the employee and the employer already know about the other and the work to do.

Still, obviously be cautious about your income requirement.

So far, I never accepted lucrative but uninteresting work. I even did not have to look for clients since my start as a contractor... I would ask to be paid more, but my family needs are small, I managed to pay my house with my former well-paid jobs as an employee, my other half has a steady job and I have some money saved in case I become a useless moron. Actually I even check my bank balance only every two months may be (boo)!

If ever I cannot get more interesting work, I could first try to try to raise my price on less interesting ones. Or I would apply to "senior" positions here of there, or as a regular developer in a startup. But I hope I would also accept any work, including non-qualified one if I have to. Now, I used to work hard at school without having this idea in mind, but I am glad I have many diplomas. In this respect, France is a place where your scholarship follows you everywhere you go, and it is a great injustice to self-made men.

Now, I talk about safety... Regular so-called "permanent" jobs are going to be something of the past. An average career nowadays goes through multiple jobs, because companies go bankrupt, because you get fired one way or another. E.g. the office closes and you are asked to move far from your place, family and kids. Or a nasty boss gives you only boring jobs so you go by yourself...
Being a regular employee is less and less a professional safety, with the additional "risk" of being stuck on narrow profiles. This in turn may be a problem when looking for another job, while in my case, I could probably apply on a dozen of profiles with proof of past experience, so I feel much more confident than ever if I had to find a new job.

Know and learn how to say no.

With time, I more and more often say no. It is one of the hardest part of being a contractor. Know yourself, and realize that every work is not always good to catch. Example: each year, more people come to me with fuzzy ideas of undefined products. I used to spend time with them to refine it into something that could become a product, that I could work on. Now I consider that if the guy does not know what he wants beforehand, then there is no time for me to waste. The making will keep on changing also ("oh, actually it would better be blue", then "I talked to X and he says it would better be red"). Actually, I could better be paid to help him shape his fuzzy idea into something usable. And even then I would unlikely be the one to make it anyhow.

No. It is very hard to say no as a contractor, especially when you put money in the balance.
I still have much trouble saying no, and I end up overwhelmed with work. Well, at least it is interesting work :)

Establishing boundaries between work and play?

Working as a contractor from within the comfort of a cooperative

Also, an excellent but unknown idea is to go, find and work from within a cooperative of contractors.

I am part of Crealead, which is a long-standing network of co-workers, a rich and heterogeneous group of independent contractors within a shared and unique legal entity (180 of us right now, with a cumulated income of 3.5M€ last year). Activities range from passive energy experts, to house architects, software experts, photographs, designers... There, I certainly do not feel alone: we are able to help an teach each other, to have breakfasts, talks and restaurants altogether, and obviously to respond to bigger projects and needs when we feel like so. We also pay ten experienced employees for the paper and accounting work, which is something that would just kill me as a stand-alone contractor. I hate that, and they like their own jobs, the world is well made.

Here again it is a win-win for my clients: I spend 90% of my time working exclusively on my added-value, and I still can be as "pro" as it is possible regarding the legal and administrative work. Then, obviously, we pay ourselves independently with the money we bring in (and here is the trick: with the exact same status as a regular employee -- so I could benefit full social welfare and even unemployment benefit if/when I decide to quit, anytime). Five to ten percent of the income goes to pay the full-time employees, the longer you stay, the lower you pay.

Did I say such cooperatives are a democratically controlled business? I do have one vote, which is as much as the president of the cooperative and any of the numerous colleagues on the board. It does not depend on the number of share I have (which is the regular mostly broken plutocracy). So if my boss does something bad, we just fire him.

Obviously, you will understand that I cannot recommend enough to try and start within a cooperative if you want to be on your own, but without being alone.

Uncertainty: shall I say yes? Can I make it?

This is a state of mind. When I want to try a new skill, then I try it, either on hobby time, as a free bonus for a client, or within a contract.

Actually, I regularly tell it in advance: "I think I can do it, but I never did it yet as a formal job: as a client, are you trusting me enough for me to try here?"

“If somebody offers you an amazing opportunity but you are not sure you can do it, say yes – then learn how to do it later!” ― Richard Branson

Sometimes, I go as far as to cut the bill in half... Most of my colleagues tell me it is no good business. I do get their point: the client does not care whether you know or not, he just wants and pays for the results. So he could pay the same as if you knew how to do it before you start.

Now, I talk straight to my clients, it is much easier to handle than remembering what you may be hiding to one but not to the other and so. They know I also keep an interested eye on their product or give a hand to their team, and almost all of them come back to me after a contract, so I need only a few regular clients. The reciprocal is that they are smart enough not to abuse from my good will: I would stop working for them and switch to another task or another client. I just never worked twice for an annoying client (fool me once...)

I do not care that much for business actually. I never was refused for job proposal that require skills I do not have yet and even though I say so... Trust is everything. Obviously, it goes the other way: I would not foolishly answer to a call that is out of my reach, or out of motivation. This would mean hours of pain, which I already have with regular projects, sometimes (the real world of embedded electronics is way more troublesome than software).

Now, once I tried something new for a contract, I decide whether I add it to my explicit portfolio or no. In any case I will have more skills and to recycle than ever. Which gives me more opportunities to get more interesting jobs. Win again for everyone. For example, I proposed only once to 3D print an object. It is too time consuming, especially when the client wants to spare money by learning how to designing the object himself. Even paying by time and not material is something I will no more do.

Do I need to apply for grants or get funded?

It may or may not be a good idea. Some countries may probably be as bureaucratic as France, most probably in Europe.

When you need money, sure it's a good idea to apply for a grant, and there really are some useful ones. Say, when it is the regular grant you are given after losing a job in place of the unemployment benefits, it is also quite easy to handle, and very often totally worth the deal (actually looking for a job is just like building a new business!). I did it twice actually.

But some grants, are probably not worth though, especially for startups with big ideas. This is specially true for individuals working at home and with no hardware needs, or with already some sort of income.

Why? Because looking for, applying to, and reporting to the state and agencies may become a full time job. Really, e.g. one client of mine probably spends 80% of his time looking and handling these grants. He is very successful as the founder and head of a 10 person-company, but it is a game that needs to played fully or not... Half way means you will not tick the marks and be refused. Also it sometimes becomes local politics, when your papers need to be on top of the pile, not counting due dats and so...

I even know two small businesses which killed themselves because they had drown in JEI, CIR, AFT, AFC... grants and labels I know too well with my former startup and my existing clients.

Most notably, I had a former and early client who was rich enough to start on his own as he always did before (I remember him writing a check of 10K€ before I even started working on his prototype, wow!). Then a "business developer" (my former associate.......) urged him into grants and labels. It totally ruined his motivation and eventually killed his project. Originally, he was able to focus and move very fast. When he got registered in the "business innovation center", he soon got pissed off by the sheer and repetitive work, meetings and paperwork he had to do (business plans, executive summaries and so)... in order to justify grants he did not need! Then came the smartphones which made his very smart and useful project obsolete (he did know he had to move swiftly).

Now obviously, your mileage may vary. The example I give is the worst scenario I know about. It was also specifically counter productive because it was a startup with a unique innovative product.
Once again, this is NOT to say a grant is bad, but to say that some come with a heavy and exceedingly annoying counterpart. Nothing is free ;)

For companies, hiring contractors instead of employees is often better. Let them know it!

What is interesting is that it is easier and easier for me to refuse politely a full-time job, and to explain that it is often more interesting for them to hire me as a contractor. Also, an external on-demand support is easier to manage than a risky long-time employment (especially in France where you cannot fire people easily, even if they are willing to go, or they lose most of their social welfare!). This is often how I help existing teams, including in the long term.

Most companies will not have enough food to keep me happy all the time on a full time job... which means I would have also to work on less interesting stuff because my boss asks me so and I could not refuse. Bigger companies have fuzzy projects, which often are killed without prior notice. Startup often go bankrupts before their product is out or successful. As a contractor I just help, but I am not part of the business strategy, nor of the failure if any!

I did sometimes accept a short-term job -- my most notable experience in this regard was one month in Doha for a client who had to hire me for a partnership with the Qatar Foundation, how could I refuse such an experience? But I politely refused both proposals to work in the long term.

Transparency pays a lot

What is even more interesting is how transparency pays.

I usually tell my clients everything: because it creates a win-win and trusted context, and I never have to remember lies. I never ever will say again "I am unavailable abroad" when I am on well-deserved holidays. And when I accept a proposal, then it means the stuff appeals to me and I will work better and harder to get it done. When I say no, I explain why, and they like it.

And here is my point: it becomes increasingly easier to find work and contract when you already showed you did good (and most often not expensive) work as a contractor. It is easier when your skills and your experience are rich, and they are necessarily richer than that of a full time long-term employee in a single company.

Asking for a moderate pay is also an excellent, and justified way imho, to keep your existing clients and to work on interesting contracts. In turns, it means you do not have to look for more work all the time.

And eventually, I am back to the beginning of this post: it becomes incredibly easier to ask for part-time jobs, without feeling like someone who does not want to work.

As a "senior" I realize how difficult it is to ask for a part-time job, without raising an eyebrow. Having contracted with the company formerly is a proof that you are no lazy guy. It is even easier when they ask you to join.

Part-time jobs are probably a huge win for personal life, but I personally still favor contractor mid/short-term projects, because I like the idea to be free (in reality it is not that easy, but if a huge opportunity happens, I just get it -- like an unplanned holiday without jeopardizing the pre-defined and constant number of holidays that my wife has).

I also contract for long term, sparse, external support, mostly leveraging research and optimization issues for startups (I never do more than 2, as they are often exhausting as you end-up doing all sort of support). Startups frenzy is weird, but they often give you shares to cut their price... Even though I often do not care, it may prove to be lucrative one day.

Opportunities are everywhere to the non-conforming!