What to Consider Before Venturing Out

You may choose to leave your salaried job as an employee programmer to become a full-time independent contractor. Or, like most consultants , you may dip your toes into the independent-consulting world part-time , while retaining your security as an employee.

Part-time programmer consulting is the very best way to test and validate your skills and ability to make the significant leap from sheltered employee programmer into the top pay for outstanding performance every day world of the independent programmer consultant.

As an independent consultant, youll get to select the major projects that interest you and that showcase your ability and enhance your reputation and marketability . Thats a heady freedom not available to the company employee. And as a consultant youre spared being immersed in company politics.

Of course, you must weigh consultants high compensation (often $4,000 per week or more) against the knowledge that consultants may not work a steady fifty-two weeks a year. However, not having to work fifty-two weeks a year is why some people become consultants in the first place.

Independent programmer consultants get to negotiate every aspect of their working conditions with their client company. A major condition often is working only four days a week (like many doctors ) of nine or ten billable hours per day, or working remotely (at home) on big projects, and taking several weeks off between projects.

Wise consultants like to be working with more than one client company at any time. (That way, theyll have projects when a major client has nothing for them to do.) And juggling clients increases the billable rate (everything is economic). You can get the rate that the highest client company pays when there is more work than they can handle.

I went to Australia on a three-week vacation with my wife and daughter after completing a major project for a client company for whom I consulted virtually full-time for five years . Then I spent some time in Australia working with another client company before returning, refreshed, to begin my next exciting major project with my old client without having any lingering responsibilities for my previous projects. Company employees rarely get a real reprieve from work, since when they return from time off they have to take care of the work that has piled up while they were away.

Theres another financial reality to consider: Because the consultant is an independent contractor, he has to pay the employers share of FICA (payroll) taxes as well as his own. A salaried employee now pays 7.5 percent in FICA taxes, the consultant pays 15 percent. The independent consultant is paid only for services rendered, with no vacation, holiday, personal days paid, and with no health coverage.

Another consideration: If your consulting job isnt within commuting distance, youll have hotel and restaurant expenses (though theyre tax deductible). However, consultants can often negotiate reasonable travel and living expenses to be paid by the client (travel expenses to and from the client company being from your office, which is typically in your basement ).

A warning to programmer consultants: Invoice your client company regularly (and promptly) for billable services, and provide a detailed one-page summary of your accomplishments each week. Specify payment terms with your client and then insist on payment within that time. One independent consultant I know allowed $11,000 of billable work to accumulateand got none of it because the client company went into bankruptcy proceedings .