Why should you become a contractor? - The 3 big benefits of contracting

This is the first lesson from my free course - 6-figure Contractor Masterclass.

Have you ever considered working as a contract developer?

I have worked as a contractor on and off over the last decade. And I have to say - it can be quite a lucrative career.

Once you have a bit of experience, earning 6 figures every year is easy - far easier than as a full-time employee.

It's what's enabled me to fund developing my own products and businesses.

Now, in case you're wondering, a contractor is similar to but not quite the same as a freelancer. For example, you will usually work as part of a team and you might even need to work on-site in your employer's office (at least outside a pandemic).

A contractor is closer to an employee but with some unique benefits and risks (more on that below).

A freelancer typically has more freedom (and responsibility) - you work from anywhere you like and you manage your work hours however you like. The client just pays for results (a good client, anyway).

However, with remote work now becoming the standard across the industry, "working from anywhere and any time" is no longer a benefit exclusive to freelancers.

So, if you're interested in working as a contract developer, below are some benefits and risks you should consider.

It took me more than 12 years of trial and error (lots of error) to learn this stuff. So I hope I can save you some time and heartache by sharing everything I know.

First, the benefits:

• You can earn much more as a contractor than a salaried employee (often twice as much). For example, as a senior Rails or JavaScript developer in London, you can make £600-£700 per day (that's around $1,000 per day).

• You can take breaks and holidays more often. Most contracts are around 6 months long. It's fairly common for people to work for 6 months, take a break for a month or two and then get another contract.

• Explore your interests and side projects without conflict of ownership or interest. Companies tend to enforce far stricter rules on their full-time employees when it comes to work outside the job. As a contractor, you have more leverage for making clear that the employer does not own anything you do outside of that contract.

• You can have much better work-life balance than salaried employees. I'm not sure what the reason is, but in my experience, employers expect a lot more time commitment out of their full-time employees. Employees (especially developers) are somehow expected to always be on-call. And with Slack, it's easy to get sucked and guilted into it. You don't want to be accused of "not being a team player" or "not committed to the mission" or "not part of the family". As a contractor, I found it much easier to draw clear boundaries - both in terms of responsibilities and work hours.

• Related to the same point, as a contractor, you will learn to be a professional and run your own business. Whether we like to admit it or not, overworking is often a sign of amateur behaviour. Instead of getting your work done in good time, you waste time shooting the shit at the virtual watercooler (haha look another NFT meme) and then work late hours to ship that feature. As a contractor, companies expect you to know what you're doing, hit the ground running and get things done on time.

• You can get a variety of experiences in a short amount of time - you can work in many different companies for 3-6 months at a time. For example, in a span of a few years (and only working a few months at a time), I worked for a 2-person startup, a large government department, an ecommerce company, and an enterprise SaaS company among others.

• You can get pay rises much faster. Every time you get a new contract, you can increase your rate by 10-30%. And since you can change contracts at least once a year, that adds up quickly.

• It's easier to work part-time. For example, you can get a 3 or 4 days a week contract much more easily than you can get a part time job with that kind of arrangement. That gives you the time and mental space to work on your own projects.

• It's a good way to ease into freelancing. You can find contract work through the same channels as salaried jobs. But for freelancing, you have to start selling your services through completely different channels on day one. So it's a much bigger leap for someone coming from an employee background. Once you have some contractor experience under your belt, you can try your hand at freelancing with confidence.

But let me be completely honest - it's not all rainbows and sunshine.

Here are some risks you should be aware of:

• No paid holiday - if you take a day off as a contractor, you don't get paid for that day.
• No employer benefits like health insurance - although you can earn a higher income, you have to give up some of the perks of being an employee.
• You need to be able to work independently. If you can't, you may not enjoy it.
• No training provided - you're expected to hit the ground running.
• If you prefer to stay in one company for a long time (say, for example, you really believe in their mission), you may be better suited to a full-time job.

Those are some of the main benefits and risks I have learned from my experience of working as a contract web developer over the last 12 years.

On balance, I still think the benefits of doing contract work far outweigh the risks. It's definitely worth trying once. If you don't like it, you can always go back to a job.

If this has piqued your interest or if you were already considering contract work, you might have a number of questions about how to go about it. For example:

How do I start? How do I get my first contract?

How do I go from being a salaried employee to a contractor?

Should I work with recruiters?

Should I look on job boards or Linkedin?

How much should I charge? Should I charge hourly or daily?

Do I need to create a company or should I work in my own name (as a sole proprietor)?

What are the tax implications? What's IR35 and should my contract be inside or outside of it? (if you're in the UK)

I answer these and more questions in the next lessons of my free course - 6-figure Contractor Masterclass.