The Practical Guide to Limited Company Tax
If you have chosen to operate your business as a limited com...
By Jonathan London on 13th June 2014
For self-employed professionals working through their own limited company, long-term contracting is much more than a career, it’s a way of life.
Some professionals contract for a short time and then return to permanent employment but for those who want to be their own boss until they retire, contracting is about much more than moving from one project to the next.
Adding new skills to your CV is a very effective way to ensure you’re always at the forefront of your profession. This can vary depending on your industry but generally it never hurts to learn something new.
In fast moving environments like IT, you may be required to take on a new skill in order to keep up with your competition. With cyber security becoming a ‘must have’ for modern businesses, contractors with these skills may find a wider array of IT jobs available for them to choose from, for example.
By seeing each contract as an opportunity to evolve your skills you can also succeed as a long-term freelancer. For example, if you take on a challenging project that will allow you to add to your skillset, you’ll come out of the contract with more than when you started it.
Establishing a positive relationship with every client you work for is crucial for contractors who want to sustain themselves financially for the long-term.
Whether it be a good reference or a contract renewal, keeping those you work for happy has no negatives whatsoever. At the very minimum, this should mean delivering exactly your service effectively in the time you’ve agreed with the client. If you want to go that little bit further, you can always deliver sooner than your client expects you to.
However, if you are attempting to do this, you should ensure that you do not let the quality of your work drop.
Keeping up to date with the current market rate for someone with your skills can be essential. You don’t want to price yourself out of a job because the client can’t afford you but you also don’t want to sell yourself short.
Negotiating a fair rate is all part of working in this way, however, if you’re asking for too much and the demands aren’t reflected in the broader market, your client may just look elsewhere.
As a contractor, you have to be able to deliver on what you promise in the interview. After all, you have been brought in to take care of a specific problem and if you tell the client there are certain things you can do when in fact you can’t, you’ll soon be shown the door.
Of course, you won’t always be able to assess a job properly until you begin the contract, and that’s fine, but you should never embellish your skills in a way that may set you up for a fall later on.
In an ideal world, you’d be able to work one contract, take a break and then get back to work in a few months. This, however, is not likely to be the case as most contractors head straight into their next project once their last one is finished.
While you’re on the job it’s important to look after yourself so that you don’t burn out. A healthy lifestyle outside of work is often a good way to boost your performance at work as well as in general.
Of course, you’re still entitled to take holidays and time off to suit your needs, but you won’t receive payment like a permanent employee and so you have to ensure that you have accounted for this before you take any breaks from employment.
Ensuring that you’re financially comfortable throughout your career as a contractor is very important. It’s wise to establish a ‘rainy-day’ fund in case you find yourself unable to work for any reason. In between contracts you will also need enough money to pay the bills, and so you should always have this in the back of your mind.
In terms of looking after your finances, it’s advisable to seek out professional advice so that you know everything is in order. Online accountng applications are an easy and efficient way to go about this.
Our guide to closing your business explores some of the options for closing or suspending a limited company
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