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Self employed contracting - worthwile?

Discussion in 'Electronic Design' started by Funky, Feb 18, 2004.

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  1. Funky

    Funky Guest

    Currently, I earn about £40,000 per anum as a self employed contractor in
    the area of real time embedded systems with no middle man getting contracts
    for me. I'm not exploited, have about 2 months holiday a year, and the work
    seems to find it's way to me now that companies know me, rather than having
    to have to put up with the pain of phoning around. So I would recommend self
    employment.to anyone that is sick of putting their welfare into the hands of
    people that aren't bothered.

    Is this the general view of other people here, and what else to they have to
    add?

    Wth interest,
    Funky.
     
  2. Quite a novel way to receive payment. In monetary terms, anyway. (;-)
     
  3. I imagine that people who have a variety of in-demand skills already
    (including both technical and people skills) will do well self-employed.
    People who are learning their trade, or who are not especially competent, or
    who do not have good people skills, are likely to do better if employed by
    others. Clients are faster than employers at ditching mediocre workers, I
    think.

    Personally, I am encouraged by the fact that most of my self-employment
    income is from word of mouth and repeat engagements. It supports the idea
    that my clients are finding my services truly valuable.
     
  4. Guy Macon

    Guy Macon Guest

    I am also an independent (although I am open to the right job as a
    captive). You hit the advantages, but missed the big disadvantage;
    you have to be a salesman, and the product is you.
     
  5. I've been doing it for many years - I workfrom home, and don't think I could ever go back to a
    'regular job' - the flexibility is just too nice..!
    I have never had to advertise - new customers have mostly come from people leaving one customer and
    going to another company. If you do a good job and give a good service, people will always come
    back, Maybe not tomorrow, but eventually they will.
     
  6. Funky:

    Yep, I am a self-employed "consultant", and... it works well for me.

    I do *not* consider myself to be a "contractor". "Contracting" is an
    honorable
    way to make a living but... it does not pay as well as "consulting".

    A "contractor" performs standard cookbook design work by the hour and often
    those
    services are also met by the well known job-shops who "farm out" their
    talent almost like
    a recruiting agency and compete on price per hour.

    Whereas I provide only high level consulting "concept level" design and
    development
    expertise at very high per diem rates. My clients usually provide the
    Engineering "labor" to
    implement the details of my concepts, or... they may ask me to sub-contract
    the whole
    "package" for them, e.g. PCB layouts, codes, lab testing, BoM's, etc...

    My clients are usually not working level Engineers, rather they are
    Executives with
    "deal-making" or "decision-making" power who control and manage budgets and
    who are frustrated because their working level Engineers are not able to
    deliver timely,
    effective, or feasible design solutions.

    Often the working level Engineers, with whom I *must* maintain cordial
    relations since
    they can screw me up, are not really happy to see me involved since my
    presence seems
    to imply that they are somehow lacking.

    I never include "invention", or "discovery" in my legal consulting
    contracts... rather
    I usually have a separate contract, or provisions in my main contract, that
    covers
    "invention" or "discovery" and which provides for the scenario of royalties,
    and other
    kinds of non-per-diem payments. If and when I do "discover" or "invent" in
    the progress
    of my work for a client, I always maintain my ownership [maybe
    non-exclusive] of
    my inventions and my royalty fees kick in as well.

    I generally find my clients through networking.

    I'm a "grey beard".

    I often find that, when I arrive on the scene, a project is very near to
    failure... and I am
    often called upon to perform miracles...

    Tough work... but it can be very rewarding...

    "Consulting" is a very high calling!

    Consulting requires very high technical skills, but it requires even more
    "people" and
    "negotiation" skills than purely technical skills.

    To stay in business as a consultant, you have to be preparing your next job
    *while& still
    working on the current one, and so...

    Sales and Marketing are the largest part of consulting. Plan on spending
    at least 30-40%
    of your time each week on beating the bushes for the next project.
    Otherwise you will
    encounter "dry patches"!

    One has to keep the "pipeline" full. Can't do that if your head is down at
    the keyboard
    doing low level design 24x7.

    Happy consulting...
     
  7. There must be client who has to pay through their nose...

    Charles
     
  8. John Jardine

    John Jardine Guest

    Yep!. (and been very fortunate in that I've yet to pick the phone up :)
    4 years of freelance electronics design work and loved it from day one.
    The biggest bonus is the freedom to follow a natural life rhythm. Rise at
    10:30 and work till late. Sleep or bunk off as wished for.
    The sheer intellectual stimulation that results from the wide variety of
    jobs that can turn up is a real motivator. Last month it was discussing the
    dynamics of gym machines. Last week it was being shown a 10,000 tonne press
    for forging turbine blades.
    (Coming from a corporate culture) a pleasant side benefit is that
    involvement with beancounters is limited to the once a year where I pay them
    to do work for me.
    There's also the minor but impish knowledge that the shiny bit of tasty new
    test equipment you've bought for what essentially is 'hobby' purposes has
    been contributed to by the taxman.
    The magic key, is that the self employed have *control* over the direction
    of their lives.
    Biggest stress raiser is the gnawing suspicion you should have quoted more
    on a particular job or that greed or unwillingness to turn away customers,
    has allowed 2-3 jobs to be running at once and you're having to actually
    spend time doing some -real- work.

    I'd say, don't do it just for the money, this is a secondary factor. No lone
    worker can achieve great wealth by their own efforts. If the person is any
    good then a comfortable lifestyle can be expected.
    Don't do it if you don't know-for-a-certainty that you can do a job
    better/cheaper than any previous supplier.
    Don't do it if you can't answer a Yes! within 10 seconds of being told the
    requirements.
    Don't do it if you've doubts about your technical skills in the areas you
    are working in. I know for sure I could not have earned a living by this
    means 20 years ago.
    I'd willingly recommend this way of working to anyone who feels they're
    caged in by badly run companies and dickheads in corporate suits.
    regards
    john
     
  9. You might like my line that came to my head when composing a letter to
    an editor yesterday:
    'The trouble with the beancounters is that they count the beans and
    forget about the farts.'
    Ally Hauptmann
     
  10. Nico Coesel

    Nico Coesel Guest

    Hmm, I would consider that early. When I worked for myself I used to
    get out of bed at 13:30, have breakfast at 15:00. Anyway, for other
    than financial reasons I had to take a job which had some other
    advantages as well.
    But still: you are working alone. Carrying all the riscs by yourself.
    I like to work within a team of people. I can focus on what I can do
    best and (have to) leave other stuff to other people.
     
  11. ddwyer

    ddwyer Guest

    After 25 years in multinationals I can confirm that generally they have
    no commitment to the engineers who helped create the product lines.
    Much better to look after your own holidays and pension and health ,
    better also for the hiring companies who dont have to pretend.
     
  12. Ian Bell

    Ian Bell Guest

    There are downsides of working on your own like you have to pay for your own
    sicknesss and pension. An alternative is to form a company with a few like
    minded individuals. You are still in control of your own destiny but you
    can take on a wider variety of projects. I mention this because this is
    what I did back in 1987. We expanded even thru the 1990 recession and spun
    off several companies. One, which develops GSM chip sets and software, was
    floated three years ago and allowed me to retire at the ripe old age of 50.
    The original company is still going based on the same principles of trust,
    self determination and empowerment.

    Ian
     
  13. Guest

    40K? And how long did you study for? Five years academically plus five
    years in industry? It sounds impressive to me but then I'm in the same
    business but this is nothing compared with building:-

    My friendly builder spent six months learning to lay bricks and then
    went self-employed. Within fifteen years he had his own house, £50,000
    in the bank, (this was way back in the mid 80s) and a good strong
    body. This is how he did it:-

    1) You get rid of ("launder") cash by improving the first two or three
    properties you own with minor-to-a-builder improvements.

    2) The third or fourth is land only and build your own. This is the
    one you claim the VAT back on, you can only do that once, so it must
    be the "big" one.

    3) Sell it, buy a normal house at half the price and retire.

    This is nothing compared to plumbing. Plumbers get...

    Robin
     
  14. Leon Heller

    Leon Heller Guest

    In the UK news recently has been a molecular biologist with a PhD who
    has abandoned a university research career for plumbing. He was getting
    fed up with the poor pay and having the hassle of getting his contract
    renewed every two or three years, and decided on a change when he got in
    a plumber for some work in his house and found that he was earning far
    more than he was, and all that was needed was a six month training course.

    Leon
     
  15. US tax law is a little different. Homeowners are allowed to keep tax free
    any profit on sale of a home (one they actually live in) up to some magic
    number (currently $500,000 I think) and they can repeat this every two
    years.
     
  16. Fred Bloggs

    Fred Bloggs Guest

    YAWN....
     
  17. Ian Bell

    Ian Bell Guest

    UK law is much the same in that any capital gain made on the home you live
    in is tax free, there is no upper limit and you can do it as often as you
    like. The OP was refering to the relief of value added tax (like US sales
    tax) on the materials used in an own build.

    Ian
     
  18. Ian Bell

    Ian Bell Guest

    Seems to succinctly describe your attitude Fred.

    Ian
     
  19. Fred Bloggs

    Fred Bloggs Guest

    Ahhhhhaaawwwwnnnn....
     
  20. Ian Bell

    Ian Bell Guest

    Thanks for that useful clarification.

    Ian
     
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