Successful Contractors
Successful contractors become rich and are able to get out of the game if they want.
Unsuccessful contractors plough on year-after-year without seeming to be able to break out of the cycle.
There are ten main differences between the successful contractors and unsuccessful ones.
Keep Working
The most important thing for a contractor who wants to be rich is to be in constant work.
There are many contractors who do three months in a contract then have two months off looking for anoher one and then another three months on and a couple off looking again.
They would be just as well off in a permanent job.
They can’t even enjoy the time off as they are constantly worried as to when their next pay check might come from.
Click on Successful CVs and How They Should Look
Make an Impression
They say that you pass or fail an interview in the first 2 minutes. Some people say that it is 30 seconds. Whichever it is, you don’t have that much time to make an impression.
It’s the same when you start a contract. You will make your impression in the first month. Whatever impression you make then, for good or for bad, will be very difficult to shake off.
So, really knock yourself out for the first months so that you can relax a bit later once you’ve made your impression.
Suspicious of Agencies
Many new contractors look upon agents as, well, ‘their agents’. They think of agents for actors and footballers who act in the best interests of their clients and who get them as much work as they can at the best rates.
Nothing could be further from the truth as regards the agency / contractor relationship.
Agencies love first time contractors as they can rip them off, taking an enormous cut for hiring them out. They will also take as much as they can of any renewal rise.
Successful contractors need to know what agents are and what they are not. They are good for getting them work. However, when it comes to the money a client will pay, contractors and agents are competitors for as big a slice of that cake as they can get.
Click on Handling Agencies – 10 Golden Rules for Contractors
Click also on Using Agencies – How to Make Best Use of Agencies
Treat Permanent Staff Well
Most contractors will know the contractor who is derogatory about the ability of permanent staff, somtimes to their faces. They use questions from them as an opportunity to deride them and make a fool of them.
What they don’t realise, is that those they deride will be slagging them off to the management of the project whom they know very well. They will report any derogatory comments and also any mistakes that the contractor might make. They don’t want him, or her, there.
Most contractors will also know the contractor who gives advice to project management about the project and then throws his dummy (it is always a ‘he’) out the pram when they don’t take it, making it obvious to them what fools he takes them for.
Neither of these types of contractors get renewals very often.
The successful contractor is very careful to treat permanent staff well. He, or she, helps them whenever he, or she can, with any information or advice.
You help them and they’ll put in a good word for you with senior management, i.e. those who take a decision on whether you get a renewal or not.
Treat Clients as Customers
Most people selling something schmooze their customers so that they buy more from them. Contractors should be no different. What contractors are selling is their services and their time. They want their client / customer to buy more of that.
Therefore they should take any opportunity to sell to the client / customer.
One thing that contractors just about never do is to take their client / customer out to lunch.
Your agent will do it when they are trying to sell you (or someone else). This should not be left to the agent alone, though, as you never know their agenda. They might have someone that will make them more money that they would like to replace you with at renewal time. That’s unlikely but possible.
You would be better not to leave it to someone else to sell your servcies. You are the best person to do this.
Take Client Out to Lunch
Take the client / customer out to lunch to find out what future opportunities there are with the current proect and what opportunities there are on future projects. Ask about projects that they know of starting up in other parts of the company.
Ask the client / customer how you have been doing, i.e. what you have done well and what you could improve on.
They say that there is no such thing as a free lunch. It certainly won’t do you any harm and will probably do you good – and all for the cost of maybe an hour or two hours’ pay.
Click on Advancing Your Prospects – Who to Impress and How to Do It
Negotiate Well
When an agency asks you your rate, try not to give it. Hold back as long as possible. Say that there are a number of factors that will affect your rate and you will only know after the interview.
One trick that agencies will pull is to ask you your rate and then ask you your bottom rate. They say “we will, obviously, try and get you the rate that you are asking for, but we don’t want you losing an opportunity becacause your rate is too high”.
The ‘obviously’ part of this is not obvious at all.
Once you state your ‘bottom rate’ that is all you will ever get.
Let’s take an example.
Your rate is £400 a day. You tell the agent that your ‘bottom rate’ is £350 a day. The client is paying the agency £500 a day.
Passed the Interview
Once you have passed the interview what do you think the agency will do – come back and tell you that you have got the contract for £400 – or tell you that you’ve got the contract but the client will only pay £350.
Remember that agents are heavily incentivised as regards their commission. The more they can get from you the more commission that they will get into their pockets.
Yes, I think that you’ve guessed right what they will do.
Click on Main Factors When Choosing a Contract
Handle Renewal Negotiations Well
There are two strategies here and they depend on cicumstances.
Successful contractors will know the scenario at renewal time. Indeed, he, or she, may be the only one of the contractors there who knows what is going to happen at renewal time having taken the client out for lunch.
It could be that the project needs all the contractors that it has hired to finsih thr project. It may even need more.
Or, it could be that, at a later stage of the project, only some of the contractors need to be kept on.
If it is the former then successful contractors know that he, or she, will be needed so he, or she, can go for a good rate rise. The contractor should try to get more from the client /customer but also a bit more of the agency’s cut too.
It would be best to talk about a rate increase dirctly with the client rather than leaving it to the agency. Bring a good argument as to how you are now worth more, how you have increased your value to them and how the knowledge you have picked up will make you even more productive for them.
Skills and Knowledge of the Company
You have picked up knowledge of the tools they use, their working environment, their business, you have performed well and you have also helped less knowledgeable permanent members of the team.
Once you have agreed a new fee with the client / customer, tell them that you are happy with that and will renew and to ignore anything the agency says.
Then tell the agency that you will not renew for that rate. The agency will not want to lose you and they will almost certainly capitulate and give you a bit from their cut too. I’ve done this before several times.
Successful Contractors are Flexible
However successful contractors are also flexible. If you discover, from the client, that only some of the contractors will be kept on during the later stages of the project then you need a different strategy.
If you are good and expect that they will keep you on then that’s OK. However, if it is in the balance which contractors will be kept on then you have to take action.
The budget for the last stage of the project may well have been cut and the Proect Manager has to keep within that budget.
Sometimes cost is a factor. If you are the most expensive contractor they have, because of previous good rate negotiations, then you may be at risk.
Try to find out what the factors are at the meal with the client / customer. Contractors seldom volunteer to take a cut in their rate – no matter the circumstances. However, the successful contractor is flexible and knows that it is more important to be working than get a good rate.
If the project manager is going to keep half of the contractors then try to ensure that you are in the cheaper half of the contractors even if it means taking a rate cut.
To be in work is crucial to the successful contractor.
Click also on Contract Renewed – Her’s How to Make Sure it Does
Start Looking for New Contracts Early
Unsuccessful contractors have continuous spells on the bench between contracts. This really sucks up the money they have earned.
You find contractors who know they are not being renewed leaving it late to send their CVs out or to start applying for contracts. “I’ve got too much work to finish off” they say. “I’ll leave the job hunting till I’ve finished the contract and have the time for it”.
This is extremely foolish.
Your business is more important to you than your client’s business and you should act accordingly. You should ascertain , as early as you can, as to whether you are likely to be renewed or not and, if you are not to be renewed, your main priority should be to get more work elsewhere.
This should be your priority over your client’s work.
Start Looking for Work
You should really start looking before you even know whether the client will renew you or not. After all, there may be a great opportunity that you may miss if you don’t.
Here’s a tip, if you are to be renewed you shoud hear pretty early from the agency. If they keep telling you that the client hasn’t made his, or her, mind up yet or that they haven’t had an opportunity to speak to the client then that is a good pointer to you not getting renewed.
Often the decision has been taken but they don’t want to tell you till nearer the departure date in case you become demotivated. they want you to continue to work hard hoping for that renewal that isn’t going to come.
Don’t allow them to string you along. Successful contractors start looking for work then.
If you haven’t heard with two weeks to go, feare the worst and start acting accordingly.
Click on Previous Clients and How to Get Work From Them
Invest Wisely
Most rich people don’t get most of their money by working for it. They get it by making their money work for them.
Successful contractors invest wisely. However, the unsuccessful contractor invests most of his, or her, money when the contractor market is booming – which coincides with a booming stock market.
When the boom goes to bust the unsuccessful one has to sell his slumping Stock Market shares just when he he is out of work, caused by the end of the boom.
Successful contractors put a little aside every month, during boom or bust, to invest.
See Making Real Money from Contracting
Save for a Rainy Day
As stated above, contractors often have to sell shares which have tanked when they have no money coming in as they are out of work during a downturn.
Successful contractors have a safety net. They build a cash pile which would keep them going for 6 months to a year if they were out of work before investing.
Contractors suddenly have a lot more money when they start contracting.
The wise contractor doesn’t suddenly up his spending in commensurate with his, or her, new income.
They should only increase their spending by a little at the start. They should make sure that they are in continuous work for at least the first year.
If they can do without a holiday for the first year that will help them greatly to create their safery net, after which they can start investing.
Successful Contractor Investments
The successful contractor will eventually make more from his, or her investments and wouldn’t have to work.
Whether they do so or not would be their choice.
If you want to be like the successful contractors above it would be wise to follow the above advice.
See also Unsuccessful Contractor – How to Avoid Becoming One
Click on Rich Contractors – How You Could be Much, Much Richer
