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A few more thoughts on the ol' pactum

I wanted to add a bit to yesterday's post about contracting. I feel that I covered some very high-level basics, narrowed the field down to the two most common contracting scenarios, and there were some good comments (as well as one fine post).

However, I entirely failed to mention some of the non-material gains of being a contactor. It isn't all about wondering how you're going to feed yourself next month - there's quite a bit more to it, really, and it's the "extra stuff" that has kept me going.

Here are a couple of things that come to mind when I think about the "extra stuff."

Experience

If you decide to contract, then you will encounter diverse projects and technologies. In my contract with NW Natural, I wrote desktop apps, web apps, web service goo, wrote software to integrate with several interesting 3rd party packages, worked with Windows, worked with the AS400, DB2, MS SQL Server, and did some distributed Java mumbo-jumbo. There's a bit more to add to this list, but I think you get the "diversity in technology" point I'm trying to make here.

While this might not be representative of the typical contract, there's something about being a contractor that opens these doors for you. You'll encounter someone at a company who need "things" done, but who doesn't want to go through the process of hiring an entirely new employee or contractor to deal with them.

You wind up getting to see some pretty weird things. I got to get my hands dirty writing a CMS that ran on a Sun Cobalt Raq. The OS was Linux, the code was Java, and the presentation was done in ASP (using the ChilliSoft ActiveX/Java bridge). It was a short and fascinating job that would never have gone to an employee. The scope of the project was too small (it was a simple CMS) to justify hiring someone, and the company that wanted it wasn't a software shop anyway. I got the chance to work on this whack-ass system because I'm the equivalent of a coding whore (get in, get out, here's your money, it was nice doing business with you).

Metastuff

I hate the title I gave this section, but I really wanted to use the word "meta" in here somewhere.

What I mean by "metastuff" is an understanding of all the stuff that goes on behind the scenes.

Have you ever actually sat and watched the closing credits of a film? I don't care it it's something incredible like "Contact" or something repulsive like "The Ewok Adventure" - the list is long. For every actor you see on the screen, there seems to be about 9,000 supporting roles from "Director" to "Mr. Penn's Personal Betty Ford Clinic Consultant."

Companies are the same way.

The work that goes on behind the scenes to turn your hours into a check is really something. As an employee, you often aren't fully aware of what it takes.

In a large company like Microsoft, for example, the workload bust be truly incredible. I'm only half joking when I tell people that I think approximately 50% of the IRS is dedicated to dealing with Microsoft, which is to say nothing of how many people inside of Microsoft are dedicated to keeping the company running.

For someone like myself, the scope is significantly smaller, but I still get the basic idea from my own experience. Having to handle my own quarterly taxes, utterly incomprehensible IRS forms, strange state and federal registrations, and so on, has taught me quite a bit about the supporting infrastructure that sits behind the curtain.

What I've learned is that it is not cheap to keep an employee.

For nearly every dollar your company pays you, they're paying another just to keep your butt in one of their seats.

You might think that this knowledge is abstract and useless, but it helps to make sense of an industry that sometimes defies comprehension. You begin to realize why it's so difficult to get work, and why you're worked so hard when you finally get it. Hiring anybody is a major risk for a company of any size. Before I was a contractor, I took employment as a given in life. Several years down the road, I've learned that it is very much a privilege, and that has had a direct effect on my performance. I want happy customers, and I want people to feel that they're getting their money's worth.

And that's what I learned from doing my own (small business) taxes. Your mileage may vary.

Published Thursday, December 18, 2003 1:42 AM by Rory

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Comments

 

codeartist said:

So I'm in a position where I'm just about to start my first completely independent contract job. But the problem I'm running into now is the contract itself -- does anyone know a good source for contracts for either hourly or fixed rate software programming jobs? I tried searching online but most of the ones I found felt too general to be useful.
December 18, 2003 2:31 AM
 

Nic Wise said:

I had to go thru a lot of this stuff a few years ago - taxs etc - its the same deal in New Zealand as the US - the cost of "employee compliance" (ie, tax, seat to put bum on) is way higher than most people think.

Except we have a public health system.....

:)

N
December 18, 2003 3:15 AM
 

Mark Dunn said:

I had a few things to add to the discussion that I thought might be helpful to others in the independent masses.

1. Get a good accountant.
When I started my business, I got a "good" accountant based on the recomendation of a friend. After 6 months and $5,000 in accounting fees, I decided I could deal with a lesser accountant and be just fine. I found a local guy that had retired for the State of Georgia's Audit Dept. He does small business accounting to earn a little extra income and as it turns out knows tons more than the high dollar accountant I started out with. I now spend about $2,000/year for my accounting.

2. Get a good lawyer
Same friend recommended my lawyer to me. And yes, he's high dollar, very aggressive and I decided to keep him. I spent $800 with my lawyer initially to set my business up. Later I discovered my accountant could have done the same thing for me for $350. Lesson learned there is talk to the accountant first. You may wonder why I would keep a high dollar lawyer. Well, I don't have to use him very often. About the only time I need his services now is for collections. He's 100% after a year and half collecting from the dead beats so I think he's a keeper.

3. Matters of Insurance.
Let me start out by saying I really hate the cost of insurance in its many forms. Now that I have that out of my system, my best advice to a small business is check into your local chamber of commerce. You may find that they can get insurance for you at a group rate if you become a member. That can save you substantial amounts of cash.

Aside from medical insurance, you'll need to address business liability and errors and ommissions. My best advice here is to check out www.techinsurance.com. After many hours/days of research, they gave me the best bang for the buck. Since my company mainly does training I was able to avoid costly E&O insurance until I started offering consulting services. Most large corporations will require a certificate before making you a vendor.

4. Last point. Web Host.
So you will need to set up a web site eventually. Take a look at www.webhost4life.com. They rock. Use markdunn as a reference and you'll be helping me out as well:)

Hope the above advice helps out,

Cheers,

Mark
December 18, 2003 7:43 AM
 

Jeff Key said:

I'll second the WebHost4Life recommendation. I've only used them for a few weeks, but things have been solid. SQL Server, a ton of email accounts, nice web email interface, ASP.NET 1.1, etc., etc. all for $10/mo. I paying $20/mo @ Hostway for ASP.NET 1.0, no SQL server, etc., etc. Couldn't be happier (so far).
December 18, 2003 11:58 PM
 

Rory said:

Jeff, my friend -

"I'll second the WebHost4Life recommendation."

I will, too, but not without some reservations.

You *will* experience some downtime at some point that is the result of half-assed goings-on in the server room.

My blog was nearly offline for the PDC, which would have been a disaster for the three people who were counting on me for bathroom coverage.

Just a little warning ;) At $10/mo, you *won't* find a better deal, but you could definitely find better uptime.

That said, for $10/mo, we're lucky they don't just dump buckets of dead locusts down our chimneys at night.

Don't know where that last example came from. Just seemed like something unpleasant that *could* happen.
December 19, 2003 12:37 AM
 

Josh Baltzell said:

Yeah, all I was planning on saying before reading the comments was this: Rori, so you are the other person that liked Contact, it's nice to meet you!

Now, that said I did some headhunter contracting for a while and then I did some independant web design. I have to say that I don't have the guts to do a lot of independant stuff. I find myself giving a lot away to the customer for free. I suppose I just need to go buy myself a pair and I will be fixed, but I haven't done that yet.

Also, check out hostdepartment.com. I use them and they have some great deals. Pay attention to how many domains and subdomains each package can handle.
December 19, 2003 2:42 PM
 

Halifax Chartered Accountant said:

I am new to the internet and I am surfing here and this is so cool. I did a search in the search engines on "accountants" and I found your web blog.
I am a chartered accountant in Halifax, Nova Scotia, Canada and thus my interest in searching for "accountant" on the WWW.
I just wanted to see how the rest of the world thinks about chartered accountants and see what trends and technology are happening in the accounting world. It is quite interesting, the different things discussed on a website found by searching for "accountant" in the search engine.

Respectly yours
Stephen J.
<a href="http://www.a-purfectdream-expression.com/stephenb.html">A Halifax Chartered Accountant</a>
February 6, 2004 2:11 AM
 

TrackBack said:

More on Contracting, Consulting, and being Independent
December 18, 2003 8:24 PM
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