Ask HN: How can an employee get started being a software contractor?
I've worked as an engineer for a few years now at large companies. I'm interested in learning more about being a software contractor and seeing if that'd be a good avenue to start my own business in. How can I go from being a W2 employee to a contractor? How does one find contracts?
8 comments
[ 2.1 ms ] story [ 29.5 ms ] threadAs a permanent employee of a consultancy, the consultancy takes on the liability of having to pay you a wage even if they run out of billable projects to deploy you on, so you shouldn't expect to make as attractive an hourly rate, compared to if you are contracting directly with a client or being some kind of sub-contractor or casual/temp employee of the middleman agency.
In some labour markets (australia, UK) contract IT work is quite common. If you can't find leads for contracts through people who can vouch for you in own professional network, hop onto the popular local job search website, set the filter for "contract" work, plug in some keywords, see what ads pop up. It can also be interesting to dial filters for salary/daily contract rate way up to get a feel for what skills or technology has the most market demand. If there are advertisements that look interesting, reach out and talk to people.
You will rapidly find yourself talking with recruiters at consultancies/agencies/bodyshops -- if they think you might be a good fit for their client, they will of course generally be aspiring to purchase your labour for as low a cost as possible so they can pocket the largest spread between what the client is willing to pay and what you are willing to work for. But there's a bunch of skill and time in finding clients, negotiating pricing and contracts, sorting out admin and compliance stuff -- you either figure out how to do it yourself or rely on another person or firm to do some or all of it on your behalf, and let them capture a share of the value.
Consultancy, mentioned here, might be a useful stepping stone to get the feel of being a supplier.
On the contrary, I’d say you have _more_ job security since you tend to switch assignments often.
I create an invoice immediately.
Start invoicing after the first conversation where you agree you will be doing the work.
Invoice immediately.
Micro invoice if you have to.
Invoice in minimum four hour blocks just for talking.
Invoice in ten+ hour blocks like a retainer for mom and pop shops so you can inch forward.
Invoice requesting portions up front (just to begin!) on invoices worth over 10k.
Bill reguglarly.
Invoice up front for the TOTAL amount, and then send the same (modified) invoice periodically (once a week, once every two weeks, every 30 days, or on incremental delivery. What ever works best!) for regular payments on completion of milestones.
And did I mention KEEP INVOICING! Don’t have feelings. The contract part is you will DO THE WORK and they PAY YOU.
You may think I’m being silly. Too many fine technical folks are ignorant and afraid of MONEY.
Bill for everything productive (talking, email, meetings). In fact, a good rule of thumb is to add 25% to your estimated project costs for TALKING and other administrative tasks (as low as 15 minute increments if necessary.)
Good luck! And remember, INVOICE!