Thanks for the advice and the abysmal outlook...thankfully I have a decent full-time job and am primarily concerned with how to deal best with side-job stuff that I do every so often. Usually its $500 for a quick little program or a simple web design due in two weeks and I knock it out the first week on a Saturday but I am starting to get folks who want me to do more complicated programming work that I'd love to do but don't exactly have a rich background in. I have no doubts I can do the work but I want to formalize these agreements in a way that the two-week jobs don't really require...I don't think I'll ever venture out past doing this kind of work as a side-job since I'm too lazy to be a 'real' contractor....
On Tue, 22 Feb 2005 10:32:56 -0800, Kurt Cagle <[EMAIL PROTECTED]> wrote: > James, > > If I can add my two cents worth here as well ... > > I have similarly been contracting for about twenty five years, and I > will second everything that Ron wrote. Incorporate as an s-chapter > corporation - if you go in as a sole proprieter, you're personally > liable for all debts incurred, still have to pay self-employment tax, > and generally have almost no protection under the law if your business > faces bad economic times (I speak from experience here). Make sure that > you have about a six month pad in the bank (I'd even recommend a > year's worth if you can manage it) because you WILL dip into that pretty > quickly as you're establishing yourself. Far too many consultancies have > failed because, even though people may have the contracts, the money is > very slow in coming in. > > Keep in mind as well that your operational expenses will also include > health insurance costs, a necessary expense even if its becoming > increasingly unaffordable. If you get sick or injured, you are not > bringing in income, and having to pay out of pocket for anything > sufficiently severe that it keeps you from working will likely wipe out > what little pad you do have.. > > If you do manage to establish yourself as an independent vendor with a > large company (a much more difficult task today than yesterday), expect > that it will be a minimum of three months before you see any money, as > it usually takes at least that long for vendors to be vetted and entered > into the system. For government contracts, add another three months to > that. As a contractor, the game almost invariably favors the hiring > company, and in recent years, this has becomee even worse. Large > software companies such as Microsoft not only seldom hire independent > contractors anymore, they typically only use only one or two large > body-shops to bring in people, and unless you are exceptionally well > known in your field, you will almost invariably end up being brought in > by such companies ONLY under contract. Microsoft in particular (again > from experience) has been slapped down a couple of times for keeping > their hires as contractors for years, but that doesn't mean that they > don't still do it or that other companies don't do it as well. > > I'm a writer (you want to talk about a nice "secure" job!!?) > specializing in computer trade books - and writing is probably one of > the few professions where you can still be an independent, though the > money is nowhere near as good as you can make even as a contractor, sad > to say. > > My recommendation, as awful as it may be - if you only have a couple of > years under your belt, put up with the contract mills for a while, even > if they are vampiric leaches. Get the experience and the resume. Start > writing for publication - a few good technical articles under your belt > and maybe even a computer book or two can be a useful business card. > Read the fine print of your contracts closely, and choose jobs that > don't restrict you from taking moonlight contracts. Start building up a > client base through these -- happy customers refer other happy > customers, and tend to grow as you do. Be careful to keep a chinese wall > between your contracting service clients and your own - don't use code > from one for the other, don't put yourself into a situation where your > contracted employer can turn around and sue you. > > Finally, only half in jest, don't go into consulting if you're married, > unless your wife is making enough to offset any slow periods on your > part and is willing to make the sacrifices to keep the family going in > lean times. Consulting is a feast or famine situation - you will either > be busier than you can handle or you will be slower than you can > survive; besides the uncertainty in income, the constant stress of > either you not being available at critical times or you being too > available at non-critical times will doom most marriages except the > strongest. > > As with any profession, most people who have established themselves in > the field will tell those that haven't that its not worth it, so always > take things like this with a grain of salt. The benefits of having your > own business can't be beat either - you choose your hours (though you > will put in more than most "full-timers"), you generally profit from > your own work rather than getting the final sliver of a body-shop's > fees, you can make the decisions for good or bad rather than being at > the beck and call of a boss. For some people, this is worth the long > hours, the periodic famines, the regulatory headaches. > > -- Kurt Cagle > > > Ron Wingfield wrote: > > >Hello James, > > > >I've contracted for about twenty-five years. From experience, here's a few > >tips: > > > >Incorporate your business. You'll gain protection under the corporate veil. > >Elect Sub-chapter S. (Essentially, you'll pay only personal income taxe, > >and not corporate taxes. > >Always contract for 1099 payment -- Never, never W2! > > > >Also, there are essentially twenty to twenty-one criteria for independent > >contractor status. (I Googled around and found this link: > >http://www.hasys.com/systems/20_factors.pdf ). > > > >Be aware that the contracting business is not what it used to be. With > >out-sourcing and off-shoring, it's tough to compete with someone making > >$10/day when you used to get $75 to $125/hr or more (keep in mind that > >China's not a major player, . . .yet). Also, the technology has changed or > >evolved to the point that no one, NO ONE, can know it all. RFP's or job > >orders can be so specific that the odds of a match are abysmal. More likely > >than not, and especially with government contracts, the client usually has > >someone or some company already in mind, but the contracting agency is > >required by law to publish an RFP (. . .all that Equal Opportunity stuff, > >etc.); therefore, they write the RFP to be so exclusively specific that the > >odds of another responding party meeting all of the requirements are a > >zillion to one. > > > >Adding insult to injury of this scenario, many companies are so gun-shy of > >IRS consequence, that they will not contract directly with a single > >independent contractor; rather, they contract with staffing or accounting > >firms that are notoriously overpriced for the skill levels of indivudual > >that they provide. If for example, you work with a company like Accenture > >(formerly Authur Anderson), you'll get paid a fraction of what they bill you > >out for, and probably, they're going to only hire you as a W2 employee, > >anyway. I have worked with a few small job brokers, but beware! There are > >only two or three that I respect and will still do business with, and also > >the business has become much more difficult for them, too. > > > >Finally, the perceived value of the work done is devalued. Programming in > >the traditional or former sense (as in two decades ago) is now considered no > >more than a clerical task. The market for programming skills, (the > >so-called wave of the future, . . .I never liked that term, anyway) has been > >glutted by trade school wonders that have no concept of how business is > >conducted (don't believe me, . . .ask an eighteen-month "graduate" to write > >a five page abstract on the nuances of MRPII, the ramifications of > >Just-in-Time Inventory with emphasis on Raw Materials in considerations for > >the Rolling Mill Production Schedule of a hot rolled steel mini-mill, all of > >which are blanked under an Enterprise System that included Human Resources, > >Payroll, and General Plant Accounting.) > > > >Finally, the web and advent of HTML, et. al., has created an opportunity for > >art students and marketing grads. to get into the mix. This is why so many > >web sites are such a pain in the !#$% to visit. Too much information, . . > >.too much time to load, . . .too annoying. Given the plethora of html page > >editors, etc., web design has become more of a cosmetic thing -- it's > >certainly not programming. (Arguably, server-side code and to some extent, > >client-side Java Script require some programming and organizational skills.) > > > >As for server and network administration, again, the technology is analogous > >to no more than typewriter repair skills of the pre computer era. After > >all, personal computers, etc. and now considered to be disposable Consumer > >Electronics by the industry. > > > >Bummer, huh? > >Seriously, good luck, > > > >Ron Wingfield > > > >-------------------------------------------------------------------------------- > > > > > > ----- Original Message ----- > > From: James W. Thompson, II > > To: beginners@perl.org > > Sent: Monday, February 21, 2005 7:49 PM > > Subject: [Maybe OT] > > > > > > This isn't a technical question and I know no one here can/should > > probably dispense legal advice; but does anyone know of some good > > resources (other than talking to a lawyer) regarding freelance > > programming/consulting contracts? > > > > -- > > James W. Thompson, II (New Orleans, LA) > > > > -- > > To unsubscribe, e-mail: [EMAIL PROTECTED] > > For additional commands, e-mail: [EMAIL PROTECTED] > > <http://learn.perl.org/> <http://learn.perl.org/first-response> > > > > > > > > > > > > -- James W. Thompson, II (New Orleans, LA) -- To unsubscribe, e-mail: [EMAIL PROTECTED] For additional commands, e-mail: [EMAIL PROTECTED] <http://learn.perl.org/> <http://learn.perl.org/first-response>
