Working as a contractor is a desirable profession. Financially, contractors can earn more than a permanent worker in an identical role. Additionally, temporary workers are able to manage a work schedule that corresponds with their lifestyle, creating a work-life balance that may improve their health, happiness and general motivation and with a widespread skills shortage at present, now is the perfect time for those considering working in this way, to seize this opportunity.
Nevertheless, like in any job, there are often challenges that contractors face, not only at the start, but throughout their career. Some pitfalls are much more common than others, but, with the correct knowledge, can be easily avoided. Here we take a look at difficulties contractors face.
Time management
Good time management is essential to most professionals, but it is even more important if you're a limited company contractor and are working for yourself. Even though this may seem like an obvious thing to take into account when working as a contractor, it can easily be pushed to one side when there are so many other factors to consider at the beginning of a project.
Bad time management can mean that deadlines have to be pushed back and projects have to be declined. When negotiating a contract it's important to set realistic expectations as to how long the project will take. If you're unsure how long that may be, tell your client the maximum amount of time it may take and if you finish ahead of schedule, it will improve client satisfaction. If you manage your time effectively, not only will it make your time more cost-effective, but it will also allow you to create a structured routine that will complement a good work-life balance.
Miscommunication
Communication skills in business are crucial. Even the slightest miscommunication between you and your client can lead to issues, so before you set out on a project, make sure that everything you need to know is properly clarified. It's a good idea to ensure that you have written confirmation that clarifies all this information so you can refer back to it should you need to.
Be transparent with your client, as it will gain their trust, allow them to see previous work and provide them with testimonials from other clients.
Dealing with your own company finance
When working as a limited company contractor you are responsible for the running of your limited company, including ensuring that the correct taxes are paid and the right documentation is filed at the right time.
Even if you're usually confident about paperwork, without the right software and experience your company's statutory documents can’t be submitted easily which may lead to unwanted penalties if left unchecked. However, the good news is that there are companies that can help you with this. For example, PayStream offers a service called My PSC for contractors outside IR35. With My PSC, PayStream helps set up the limited company on your behalf and provides bespoke accountancy advice which is specifically tailored to your needs, making the process much simpler and less scary than you may think.
