Author: Agostino Carrideo
Top 4 tips on building a successful contracting business
Being a career contractor can be a tough gig. We asked one of our top contractors, Agostino Carrideo, to give us his top four tips on building a successful contracting business.
Many procurement full time employees are indeed specialists in their field, and due to high demand, are considering a transition from full time employment to contracting.
There are many benefits that come with professional contract work, with flexibility, freedom, variety and earning potential all ranking as key motivators to adopting the contractor work life balance.
Despite the potential that contract work affords, there are some unfortunate drawbacks that come as a result of simple mistakes that could be otherwise avoided. Failing to protect, negotiate, market and prove your worth can drastically affect your remuneration, satisfaction and career prospects. So how can you make the most of your engagement mode and avoid the pitfalls of contracting?
1. Get someone else to manage the risk.
Before jumping in and incurring the start-up costs of a legal entity, there are other available options in relation the administrative burden of your first engagement. Navigating the complex world of organising professional insurances, financing, taxation and superannuation can be a challenge in itself, particularly when combined with a hectic schedule and little free time.
There are a slew of engagement structures that contractors may operate under, and choosing the right one to minimise effort and maximise output is crucial. To ensure you remain compliant with current legislation (ie: personal services income test) and operate under a compliant engagement model, consider seeking professional advice on how to best manage your engagement.
2. Don’t be afraid to negotiate Terms and Conditions
This is normally easier for procurement contractors to own and manage as procurement professionals manage millions of dollars of contracts on a daily basis and have a sound understanding of contract terms.
The terms of your services assignment will vary depending on exactly what is stipulated in the contract. By failing to negotiate in writing the terms and conditions that will affect the hours, rate, length and termination notice of your contract, you leave yourself defenceless in the event of disputes and/or clarifications on scope. A professional services contract should clearly articulate defined scope, start and finish dates, remuneration, early termination conditions, potential extensions to the engagement period and the expectations of both parties related to;
Ultimately a contract role is only as effective as the contract holding it in place; remember to get everything in writing and signed off by both parties before commencing a new role. The contract binding length is as good as the termination clause period of notice, which normally is between 2 - 4 weeks. Most agreements I have seen include a “termination for convenience”. Termination for convenience clauses are, as their name suggests, a mechanism that enables one party (or both parties) to a contract to exit the contractual relationship without having to have a reason for doing so.
Despite having secured a 12 month contract, your forward earning capacity is your termination for convenience notice period term. Ask yourself, can I handle being advised of termination at any stage of my contract engagement? If yes, proceed.
3. Establish connections. Build your personal brand.
As a contractor, it is often expected that you will hit the ground running and supplement your client organisation’s permanent workforce with crucial skills, resources and experience to get the job done. Despite this, simply completing the job without establishing networks, connections and bonds means you are limiting what you can get out of the experience and effectively failing at building your personal brand.
Nothing is more powerful than a personal recommendation. By leaving a contract role without building rapport with those you work with, you are failing to utilise the power and opportunities these connections could bring in landing future roles.
When you finally transition into a contract role, make an effort to:
4. Excited. Ready to start. Where’s your business plan?
Planning is one of the most important activities you can do to make your contracting business successful. It will give you an opportunity to consider what goals are realistic and achievable and help you identify what you can do within your start up budget. Your plan will be a guide to making your contracting business idea a reality. So are you still with me? I am stressing this point so as to ensure you transition into contracting as a business and not thinking it is simply the same role you’ve had but on a day rate. You will need to dig deep and apply an entrepreneurial lens to contracting. Do not fall into the trap of using a single channel for business development such as waiting for Seek to offer your next stellar contract role. Many of my past engagements have come directly from management consultancies and supplier relationships which have been natured for years as I applied rule 3 strategies.
Hence planning as you would in a start-up business certainly brings forward a full picture of pros and cons which should be underpinned by strategies for mitigation and growth. Investing in external advice would be a prudent step if required.
When undertaking your contract role, keep in mind that the success of the engagement and those that will follow lies largely in your hands. To best maximise the many benefits of your engagement mode, ensure you remain compliant with the law, negotiate robust contracts and engage in professional networking and knowledge transfer to set yourself up for success. In closing, you need to become as good at marketing yourself as the specialist skills you have in procurement!
This article is Part 1 of a series of on contracting that Agostino will be publishing in The Source eNews.
For Further Information, Please Contact Agostino Carrideo on, 0410 688 811 or email@example.com