Tired of working for “the man”? Doing the work while someone else gets the credit (and the money)? Does the whole corporate world make you sick with its silly sloganeering, self importance and belief that style and self-confidence trump skills and competence? If you can recognize characters from the Office Space movie from your daily work routine, you need to break out before you burn down the building.
How do you start?
There are many ways to get started, but the main thing is to make sure that you don’t jump out of the corporate jet without a parachute. You need to have work lined up when you decide to bail. How you get this work depends partially on the condition you leave things in when you leave the mother ship. Do you leave a good relationship or a bad one? Will they act as a reference or a source for work?
When I finally jumped, my ex-employer gave me a months worth of work basically doing exactly what I had been doing for them all along, just getting paid differently, supplying my own office, hardware and software (and not having any benefits). This made all the difference in the world, and although I wouldn’t have left the company if I was really happy with them, I do appreciate and give them credit for doing something that was very helpful.
The second most important thing you need to have lined up when you finally get out is a long list of contacts in companies that may need your services. For me this was easy, since I worked for a SolidWorks reseller and had lived in other areas. User groups can be a huge resource in this respect, as well as on-line forums. Make sure that people know you are independent and available. I have not had to do one bit of marketing, cold calling, or begging for work since I started. Maybe I’m lucky, but I want to focus on something I’m good at (modeling and design) and not something I have no interest in (marketing).
I also suggest that you develop a reputation for a particular niche. You are just one person, and really, it doesn’t take much work to keep one person busy full time. If you specialize in something, like castings, sheet metal, mold design, avionics, stress analysis, or whatever, you can charge more, and you become a bit of a “go to person” for that topic. This is a good situation to be in.
Don’t try to be too general, although you would think that is important to not turn work away, the most valuable thing you have is a reputation. A good reputation is difficult to get, but will be the source of more work than any other single source.
Sometimes a local SolidWorks reseller can be a good source of work. They get to see a lot of users, and companies using SW want to know where they can find resources.
How much does it cost to get started?
This isn’t as much as you might think. I got going for under $10k, and was lucky to be able to do it debt-free. If you are going to work from your home, you need a room where you aren’t going to be distracted by things like the TV, dog, kids, wife, pool, refridgerator, hobbies, good weather, and so on.
You need a computer, and should plan at least $3000 for that. If you will travel a lot or work at customers site you may need a laptop. Getting a laptop that runs SolidWorks with authority can set you back $4000 or more, again, depending on your hardware tastes.
You need to buy software. Don’t try to use a pirated version of SolidWorks from your ex-employer. That will come back and bite you at some point. When I started, I bought the bare-bones version of SW with maintenance ($3995 + $1295). Make sure you buy from a reseller with decent tech support. Otherwise, that $1295 might as well just get flushed.
You need office equipment. Printer, copier/scanner, fax, phone, maybe a plotter. Shop around. Do you need color printing? High volume printing? Large format? Definitely get a solid chair and desk. I spent extra money on my chair, because if you don’t want to sit in it, it will be an excuse to avoid work. Make your work area comfortable. In the scheme of things its not that expensive, but it is very important.
If you like to have music playing, and you’re an iTunes nut like me, consider using an older computer for that. Buy a cheap KVM switch to use a single monitor for both the work and play computers (KVM = keyboard video mouse, enables you to switch peripherals between two or more computers). Don’t use the horsepower from your expensive work box to play music. Also, don’t use your internet connection to play internet radio. Use a radio to play radio. It is so much simpler, less expensive, and it just makes sense.
Doing the work
You need to develop good work habits, even in the face of a beautiful day outside. Remember, though, that depending on your domestic situation you may be able to shift your work hours, to work when the sun isn’t shining, and fish when it is! Just a thought.
A simple accounting system is necessary. I just use a spreadsheet that shows invoices, due dates and dates paid. I keep track of business expenses in a separate spreadsheet. There are several canned programs that will help you if you need to write a lot of checks. You really should go visit an accountant to get the low-down on how to handle taxes, and exactly what you can and can’t claim for business expense.
You may want to consider a separate bank account, separate credit card, and so on to help make the accounting clear and simple.
How much to charge?
This really varies according to your location, specialty, your clientelle and the type of work you are asked to do. I’ve seen people charge in the range of $25 to $125 per hour. I started at $50 and was quickly overwhelmed with far more work than I could do, so I bumped it up to $75 after 6 months. I specialize in plastics and complex shapes, and helping inventors. Also, I tend to work quickly, so the rate is less meaningful.
Do you have to work on site?
I have been working with some customers for a couple of years and have never met them. I work with people all over the US, and live in central Virginia. I’ve made trips to Boston to work on projects, and I go see some local people when I need to, but I never meet most of my customers. This might seem strange, but I’m a touch anti-social anyway, and works for me.
Sometimes working on your own gets a little freaky. In the middle of an intense project where I am basically living in my office day and night, I have been known to just go to Walmart to be around people, or go to the diner to talk to the waitress, just to remind myself that there is a whole world out there. Getting too caught up in the on-line communications can be a real problem, and you have to balance it with some physical and social activities. Don’t burn yourself out. It is easy to do.
What happens when you don’t get paid?
Well, that sucks is all I can really say. I’ve only had this happen once, and it was with a large corporation, not with any of the individual inventors I’ve worked with. I got boned for about $3000 because one of their guys sent out a model to get prototyped without looking at the file. There was a problem with the model, and it was blamed on me. That kind of stuff does happen, regardless of how careful you are. Usually diplomacy is the better way to handle things, but a firmly worded promise to persue the issue often communicates the point as well.
On my invoice, I let people know my terms are “net 30” which means that they have 30 days after the invoice date to pay. The invoice is usually a few days behind the last of the work has been delivered, so I think those terms are generous. The same company that took me for the $3000 was the only company that I have worked with that imposed their own 90 day terms. There is no good news working for these people, so I don’t do it any more. Remember that you can fire clients in the same way that the client can fire a contractor. If the terms of doing business are not conducive to what you think of as “good business”, then no one is twisting your arm to make you work for a cheapskate company. I have passed on several jobs where the peripherals got in the way of the work, and it wasn’t worth my time to get involved.
Some people get part of the fee in advance, and some require a formal signed agreement to do any work, or a purchase order. I’ve been very lucky with an open and trusting policy to this point. It means I get to focus more on the actual work (which is what interests me about this job) than on the business (which I find utterly uninteresting). If you go through life paranoid, you find a lot of reasons to be paranoid. Said differently, if you go looking for trouble, trouble is what you’ll find.
Lawyers are an absolute last resort. You are better off filing in small claims. The company sees you are serious, and it is going to cost them for a lawyer either way, so they will often suddenly become more reasonable (or less unreasonable) and acquiesce.
One of the biggest problems of becoming an independent contractor is the question of medical and disability benefits. You can often get a health care plan from the local chamber of commerce, but this is typically expensive. There isn’t really any good news about health care or insurance these days unless you work in the health care or insurance industries.
If you are interested in becoming an independent, or are already an independent and would like some help working past some of the issues raised here, stay tuned. Interesting ideas are coming shortly