Phil Scott asked some questions about contracting in the comments section of my last post. I was going to respond there, but decided to turn my answers into a post. I don't claim to know that much about contracting (or anything, for that matter), but I do have several years of experience as an independent now, and I can share something that ought to be of use to you.
Headhunter or Independent?
This question seems to be what Phil was getting at with his comments.
Finding the answer is easier than you think. Choose the description below that best describes you:
A. I have children, a mortgage, or other "real" properties. I don't want to pay $800/mo out of my own pocket for health insurance. I don't want to pay for errors and omissions insurance. I like having a map in the woods - it's nice for someone to find that next job for me. I'm not ready to settle down with any one company, but I don't want to be walking the plank everyday either. Starvation sounds unpleasant to me, and there's comfort in knowing that someone else will starve if I do, too - it means that my guide in the woods is working pretty hard to help me find my way. I don't like stressing about taxes. I'm a coder - I'm not trying to do business.
B. I live for uncertainty. My favorite thing is to get up in the morning and not know if I'm going to have a job at the end of the day. I like to pay extra taxes, my own health insurance, and receive absolutely no paid time off whatsoever period. I like heading into the wilderness without a map. When I go swimming in the ocean, I tie part of a cow carcass around my chest in order to purposely attract any sharks that might be in the area. I like a challenge. I like having no one to turn to. I like being a part of the team, but never really having a team to call my own. I don't have children or a mortgage. There's nothing that gets me quite so excited as the prospect of paying for all of my books, training, and any other education. I think stability is for sissies, and I like to play Russian Roulette with my career.
If you chose "A" then you're probably better off working for a headhunter. If you chose "B" (as I have), then you really don't mind that at any given time you might find yourself stuck in the middle of nowhere without a lead on what to do next.
Working for a headhunter means working for someone who doesn't make money unless you're making money. That's good incentive for them to find you work.
Working on you own means just that - working on your own -, and it's very gratifying. You might have to pay a bunch of dough out of pocket for your expenses, but there's nothing like being able to look at a string of projects and successes and say "I did that."
That said, I have nothing against going full time or working as a subcontractor. I've just found the contractor life interesting. I find that life gets boring if it doesn't get turned upside-down on occasion, and that's exactly what being an independent will do for you.
The money? It's OK. I live comfortably, but it certainly isn't the reason I'm a contractor. The truth is that, after all is said and done (time off, bonuses, benefits, etc.), I could probably make just as much as a subcontractor, but I'm just having way too much fun doing what I'm doing.