Transitioning from full time employee to consultant/contractor?

9 posts in this topic

I’m wondering about Transitioning from full time employee to consultant/contractor.

 

anyone here done that in real life?

 

a lot of what I do is specialized and technical so it makes sense to have me in house, but tbh I could achieve most project results in less than 40 hours per week. I’m currently proactively educating myself and looking for opportunities to contribute beyond my directly assigned tasks because I don’t want to stagnate.

 

if I were to change to a consultant contract I could get my current job done and take on other clients to get more variety and money. Is that something anyone here’s done successfully?

 

 I’m already aware of a lot of the practicalities, need to register and run a business, file accounts, tax, etc.

 

just wanting to hear any success stories really!

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24 minutes ago, sos-the-rope said:

if I were to change to a consultant contract I could get my current job done and take on other clients to get more variety and money. Is that something anyone here’s done successfully?

 

If you want to consult for your former employer you need to be careful about Scheinselbstständigkeit.

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51 minutes ago, sos-the-rope said:

anyone here done that in real life?

Yes, that’s what I did about 12 years ago, and (so far at least) I haven’t regretted it at all.

It took me two attempts to get started though. The first time, I had arranged the scheme to shift fixed costs of the books, and give me flexibility in how I did  my work. I was in London at the time, and there was (and almost certainly still is) a crazy, long-hours culture where I had worked (I typically worked 7am to 9pm in the office and was contactable via Blackberry all other times). However, part of that culture involves an awful lot of unproductive time, and I had worked out a way to automate parts of work and delegate other parts to my team, with the intent of leaving me to deal only with the stuff which really required someone with my experience. All set up and ready to go, when the other board members got cold feet, and didn’t like the idea that I would no longer “be committed”. So, I resigned.

Not too long thereafter, a competitor had asked me to join them. I said that I was interested but only on a consultancy-style basis. We agreed to try it out and arranged a consultancy contract with a retainer for a minimum of 15 hours per month and an agreed hourly rate for any other projects which we could agree from time to time, and most importantly one which could be terminated by either side at any time for any or no reason on just one week’s notice (at my previous employer I was on 6 months, so this was a real but deliberate change for me). I am free to decide how and when to do their work, and all work is from home unless there is a particular need for face to face meetings (chargeable at the hourly rate).

12 years on, they are still a client of mine. I speak with different people from their offices every week and send/receive emails almost daily, but on average we meet face to face no more than four times per year.

Having that first one client as a base allowed me some real flexibility both with my time/lifestyle, but also importantly being free to choose what work, and with whom, I would take on in addition to them. So I have had (and still have) some other interesting and good people as clients: if I don’t like them or the work is dull, I don’t do it. I feel it's quite a privilege to be in that position.

One point of warning from your post though is that you have mentioned how you are educating yourself and how you want more variety. From my experience (and one of the few downsides for me) is that my clients come to me precisely because they know that I am familiar with the areas in which they have issues. They would not come to me (and indeed I would not be willing to advise them) on areas which are new for me.

So, whilst the way in which I work is far better, and the lifestyle it affords is infinitely better, I really would not say that the quality of the work itself is better. Indeed, the opportunity to learn new things and develop your career as an employee are (from my experience) far greater.

Also consider how social you are and how much you require/enjoy interaction with other people. I seriously underestimated that, and found it quite hard for the first few years adjusting to spending quite so much time on my own. There are ways to overcome this, but don’t underestimate the change.

You mentioned tax and admin, and yeah it’s a pain, but there are good tax advisers out there (mine is brilliant)….in fact, there seem to be several very helpful ones on this forum too.

Overall though, it’s a huge positive for me. Way better rates for your work, no need whatsoever to get involved or concerned by or with office politics, and for me, the chance to have all meals with my family, take the dog for two long walks a day, get on the bike a few times a week during “normal” working hours. 

Blimey, there's loads more, but this is already a monster posting - well done if you got this far!

 

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3 hours ago, engelchen said:

 

If you want to consult for your former employer you need to be careful about Scheinselbstständigkeit.

Like I said, I’m aware of the main issues, thanks! I’m interested in success stories :-)

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@dstanners can I send you a PM? Sounds like exactly what I’m interested in!

 

”consider how social you are and how much you require/enjoy interaction with other people. I seriously underestimated that, and found it quite hard for the first few years adjusting to spending quite so much time on my own”

 

hahaha, well, part of the issue for me is I’m very social and love to collaborate but in my experience so far everyone in IT typically works alone anyway. Most people stick in the headphones when they arrive and only take em off when the my leave, or go into “meetings”.

 

 I’m pretty sure I’ll get to communicate more by having a solid reason to proactively go and find clients, have focused meetings etc

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sos! Good evening! How about a success story! (Haters...stay away! ).

I was a happy employee in London 30 years ago and moved to Germany  as a freelancer teacher at Airbus. I had no idea of the rules for being freelance/self-employed. I didn´t know I needed health insurance (and didn´t have it! Till I had an accident and didn´t know why I needed to apply for health insurance...). Aside: how I got into my current business but that´s a really long story...

I didn´t know about tax and shit...no experience...

Long story but just some points:

if you want go out on your own: you need a plan, not a perfect one, but bear in mind your targets ..who can become your clients? Why? Who are the competitors? Do you have a unique idea (or at least you´re ahead of the game ). Are you willing to learn every day even if you don´t want to?

 

Can you self-motivate in the mornings because you want to (even if you have a hangover , stress with the kids etc )?

Are you willing to go without paid holidays?

Are you willing to forget 9-5 are not your working hours?

Are you willing to accept weekends no longer exist as a separate entity in your work/private life?

 

Who can you REALLY trust as a potential business partner ( or more than one? )

 

Put aside part of your income for tax even if you don´t want to and make sure you have a good tax consultant.

 

How are your social skills? ie do you treat a phone call or email or whatever as " helpful " for you or your client/s or is it a pain in the neck?

 

Make sure you have all your insurances in place. Self-employed...what happens if you get really sick and can´t generate income? Make sure your health insurance is relevant for your situation..you will be paying 100 per cent. Get the appropriate business insurances. 

And above all, don´t piss all your money away on wine, women and song or you´ll end up working at 67!

 

Hint: I´m 67!!

:rolleyes:

 

Second  hint: how much or what is " freedom " for you? For me: no Monday morning meetings at this or that hour and I can do what I want when I want and enjoy my family life when I want (including the dogs, cats etc.)

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3 hours ago, dstanners said:

Yes, that’s what I did about 12 years ago, and (so far at least) I haven’t regretted it at all.

 

It took me two attempts to get started though. The first time, I had arranged the scheme to shift fixed costs of the books, and give me flexibility in how I did  my work. I was in London at the time, and there was (and almost certainly still is) a crazy, long-hours culture where I had worked (I typically worked 7am to 9pm in the office and was contactable via Blackberry all other times). However, part of that culture involves an awful lot of unproductive time, and I had worked out a way to automate parts of work and delegate other parts to my team, with the intent of leaving me to deal only with the stuff which really required someone with my experience. All set up and ready to go, when the other board members got cold feet, and didn’t like the idea that I would no longer “be committed”. So, I resigned.

 

Not too long thereafter, a competitor had asked me to join them. I said that I was interested but only on a consultancy-style basis. We agreed to try it out and arranged a consultancy contract with a retainer for a minimum of 15 hours per month and an agreed hourly rate for any other projects which we could agree from time to time, and most importantly one which could be terminated by either side at any time for any or no reason on just one week’s notice (at my previous employer I was on 6 months, so this was a real but deliberate change for me). I am free to decide how and when to do their work, and all work is from home unless there is a particular need for face to face meetings (chargeable at the hourly rate).

 

12 years on, they are still a client of mine. I speak with different people from their offices every week and send/receive emails almost daily, but on average we meet face to face no more than four times per year.

 

Having that first one client as a base allowed me some real flexibility both with my time/lifestyle, but also importantly being free to choose what work, and with whom, I would take on in addition to them. So I have had (and still have) some other interesting and good people as clients: if I don’t like them or the work is dull, I don’t do it. I feel it's quite a privilege to be in that position.

 

One point of warning from your post though is that you have mentioned how you are educating yourself and how you want more variety. From my experience (and one of the few downsides for me) is that my clients come to me precisely because they know that I am familiar with the areas in which they have issues. They would not come to me (and indeed I would not be willing to advise them) on areas which are new for me.

 

So, whilst the way in which I work is far better, and the lifestyle it affords is infinitely better, I really would not say that the quality of the work itself is better. Indeed, the opportunity to learn new things and develop your career as an employee are (from my experience) far greater.

 

Also consider how social you are and how much you require/enjoy interaction with other people. I seriously underestimated that, and found it quite hard for the first few years adjusting to spending quite so much time on my own. There are ways to overcome this, but don’t underestimate the change.

 

You mentioned tax and admin, and yeah it’s a pain, but there are good tax advisers out there (mine is brilliant)….in fact, there seem to be several very helpful ones on this forum too.

 

Overall though, it’s a huge positive for me. Way better rates for your work, no need whatsoever to get involved or concerned by or with office politics, and for me, the chance to have all meals with my family, take the dog for two long walks a day, get on the bike a few times a week during “normal” working hours. 

Blimey, there's loads more, but this is already a monster posting - well done if you got this far!

 

My favourite post  of the day!

You have sussed it out perfectly! Kudos!

:rolleyes:

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Cheers @john g. . Life's good...not always perfect though - otherwise I wouldn't post on the "Vent" thread so often! That said, I do make a point of noticing how good I've got things every time I'm out walking the dog during the day. 

@sos-the-rope feel free to PM.

 

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dstanners: dogs, babe. They make you love without restraint!  I ain´t going out again tonight, though! Freezing here!! They have been warned!!

:D

Also free to PM and sos likewise,

I bite less than my dog Max!

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