Running your contracting operation as a business

What should contractors do to appear more business-like? It is surprisingly easy to create a professional business identity these days – thanks, in no small part, to web technology.

IT pros become contractors for a number of reasons – increased financial reward and freedom from the shackles of permanent employment being the most frequently cited.

Without a doubt, contracting can be a rewarding career move for many, but how many of us regard contracting as a ‘business’?

There are compelling reasons to view starting contracting as the creation of a small business – the more ‘business-like’ you are, the more likely you are to secure further business, for one.

From an IR35 point of view, the more you can show that you are indeed ‘in business on your own account’, rather than merely a ‘disguised employee’, the greater the chance that you fall outside its scope, and keep your hard-earned income.

Using our own experiences of running business sites over the past 20 years, here are some ways you can set up in business, for very little outlay:

Setting up a company

Although this is a fundamental step for anyone thinking of setting up as a limited company contractor, it is also the founding block to creating your business.

Although it is not a requirement to be incorporated to undertake contract work (many contractors use umbrella companies), you will need your own limited company if you ever want to expand your current service offering beyond your current client.

Having a limited company also presents a professional image to potential clients – particularly beyond the world of contracting.

You can read up on the steps you need to take to form a company here and take some time to choose a professional sounding company name, for obvious reasons.

As a company director, you will also have to take on a number of responsibilities (many of which can be taken on by a specialist accountant). We recommend you read up on what is expected of you here.

Create a website

No modern business can survive without creating a web identity. Firstly, go to a domain name provider (or web hosting company) and choose a domain name for your business. This doesn’t necessarily have to mirror your company name, but once again, think of something suitable for the business services you intend to market to potential clients. We use Clook for our hosting – impressive customer service and competitively priced (and we’re not being paid to say that!)

Many contractors have web design skills, so creating an impressive web site shouldn’t be a problem. Alternatively, open-source software such as Wordpress will provide you with an almost instant way to get your business online. You can choose from a wide variety of ‘themes’, which can be changed with ease.

You can outsource web design and logo creation via any number of online marketplaces (such as Upwork, Freelancer, etc.), or perhaps you know a contractor who can spare a few hours to help put some finishing touches to your design.

Networking

Social media is becoming an increasingly important marketing tool for contractors, both as a way of sharing your ‘resume’ with others, and also promoting your site to a wider audience.

LinkedIn is a must for contractors – in fact, creating a profile for yourself should be one of the first tasks you undertake when starting out as a contractor. Although LinkedIn has not replaced the standard CV, it must surely only be a matter of time before sites like this become the key platforms for recruiters and clients to interact with would-be applicants.

Not only can you build your profile, but you can also reconnect with past colleagues (the best way to find out about vacancies before they even hit the job boards), and join sector/industry-specific groups.

Business stationery

Although you’re unlikely to order reams of customised stationery for your business, try to keep your business identity uniform across all your marketing media. Integrate your company logo into your letterheads and invoices… and even your email signature.

Online accounting

Of all the products to have benefited from the boom in cloud computing in recent years, online accounting must be one of the most welcome innovations.

Aside from the benefits your company can enjoy from having realtime access to your finances, online accounting has changed the way businesses can keep track of their customers.

Software like the excellent FreeAgent will enable you to invoice your clients in a professional way, and you will also be able to keep on top of your cashflow management – find out which clients have overdue invoices, and even set up auto-renewing invoices to save time.

Accounting software won’t replace your accountant but will make the administration of your business a breeze.

Industry organisations

You might consider joining business groups, for the networking benefits they can provide – as well as discounted insurances, and other benefits. The most well-known organisation for professional contractors is the IPSE, which was originally set up to fight the IR35 legislation in the late 1990s. Other business organisations of potential interest include The Federation of Small Businesses (FSB), and the Forum of Private Business (FPB)

Suggestions?

Please get in touch with the team if you want to recommend any useful resources, or share any tips with fellow contractors.