Recently, I have considered starting my own contracting agency, so I would not have to always go through a recruitment agency for new contracts. Seeing that I have recently had an influx of contracts thrown my way, I thought it was time to start looking at having my own business where I could contract under my own company name. There is one problem, there really isn't a lot of information out there to help with exactly what I wanted. After some snooping around, some networking and talking to colleages I have composed this for anyone considering the same avenue.
There seems to be 4-5 ways of approaching the idea and they can be summarised into
1. Going through a Recruiter
2. Rent-A-Coder Approach
3. Your own Company
4. Management Company
5. Cough...Cough...Under the table approach.
Going through a recruiter.
The advantages of going through a recruiter include services that are often neglected when taking on a contracting job. This includes the management of Tax, Super, Payroll, Insurance and other HR/Employments needs. Sure you pay a bit of money to the recruitment agency, but in return you get the assurance, that all you have to do is your job and you will get paid.
Rent a Coder Approach
This approach is based on the idea that you get work off sites like www.rentacoder.com and simply set up a bank account that business pay money into. There are pitfalls with this approach.
A) You aren't guareenteed any work
B) I have personally been stung with this before, and was not paid for my work
C) You may need to diversify your tech skills to keep this as a steady stream of revenue.
Your Own Company approach
Let's face it, every developer would like to answer the question "What do you do for a living?" with "oh, I own insert company name here, an IT contracting company"......right? Some of the advantages of this approach include
A) Tax breaks
B) You are your own boss - could be bad if you are not motivated
C) Work from home
D) Acquire a reputation - could also be bad :)
E) Work on new products all the time
F) Great hourly rates
G) Easier to avoid work place "politics"
H) Easy to walk away after a contract.
However with all the advantages come many disadvantages being
A) You have to organise everything....paperwork, insurance, contracts, super etc.
B) No paid leave
C) Usually pay for your own training
D) Work locations can vary
There are plenty of companies out there (not recruitment) that will do all the management for you (super, insurance etc) however the only difference is that they will not find you jobs. If you are the kind of person that finds a lot of work through friends, people in the industry, then i would definitely recommend this. They do not charge as much as recruitment agencies and from my research, do just as good a job. Some agencies within Australia include :
Under the table approach
In no way do I condone tax dodges...if anything I simply suggest people do them :)
This approach bsaically involves working with people you know, people you have network with for less money, however in return you are payed in cash.
Hope this helps,