Contractors who understand that they are a small company providing business services tend to be the most successful. By applying this mindset to their contracting, they’re likely to have a greater chance of securing an ongoing stream of lucrative contracts.
According to ContractorCalculator CEO Dave Chaplin, himself a former City of London IT contractor, the most technically qualified contractors don’t necessarily win the most work. “It’s contractors who are good at winning contracts that not only secure the most lucrative work, but are also the ones who can pick and choose where, when and with whom they work,” he says.
“Contractors are small businesses and, like any small business seeking new business from clients, they need to acquire and apply marketing, sales, negotiation and business skills.”
Contracting skills – start by understanding the ‘product’
As Chaplin explains, contractors should start by understanding the ‘product’ they are selling – themselves and their transferable skill set. They then need to communicate their features and benefits in a contractor CV.
“The first contracting skill to learn is how to write and maintain a killer contracting CV,” continues Chaplin. “This is the first piece of marketing literature a client or agent sees, and contractors need to tailor the CV to the contract on offer so that their CV matches exactly what the client wants to see.”
Contractors should learn how to create and update their CV by investing in a ‘how-to’ guide such as the Contractors’ Handbook, or by paying a professional CV writer to create their CV for them. Also, by investing in training, contractors can enhance their ‘product’ by being able to offer clients additional skills and services.
Winning the business – the sales pitch, negotiation & closing the deal
“The killer contractor CV gets a contractor in front of the client in an interview for the contract,” says Chaplin. “But the interview is really a sales meeting, where the contractor is pitching for work; it is certainly not like an interview for a full-time permanent job.”
So contractors need to prepare thoroughly, understand the client’s issues and be prepared to offer a solution: “Having demonstrated on paper with the CV that they can solve the client’s problem, the contractor should use the interview to sell their skills as the solution to the client’s needs,” says Chaplin. “Then it’s important for them to actually ask for the business.”
Contractors are small businesses and, like any small business seeking new business from clients, they need to acquire and apply marketing, sales, negotiation and business skills
Dave Chaplin, ContractorCalculator
Having secured interest or even an offer at interview, a key contracting skill is to negotiate the best possible hourly or daily contract rate, and to negotiate out any IR35-unfriendly clauses in the contract. Contractors who invest time and effort in gaining sales and negotiation skills will win more contracts at better rates.
Running a contracting business
“Alongside marketing, sales and negotiation skills, limited company contractors also need to manage their limited company business effectively,” explains Chaplin. “They can do so by making the best use of financial and tax advantages, working with their accountant and independent financial adviser to make the best commercial decisions about what to do with their money.”
Canny contractors also spread their earnings across a range of investments – including pensions, property, ISAs, equities and other financial instruments. Some even use their contractor limited company as a springboard to launch a bigger business, such as software development or supplying teams of contractors to clients.
Dave Chaplin is a former IT contractor in the City of London, and is founder and CEO of ContractorCalculator, and author of the Contractors' Handbook.
Started in 1999, ContractorCalculator (this site) is the leading independent website for the UK contracting industry – most of whom are highly skilled knowledge workers.
Read Full Profile...
View all our experts
Chaplin concludes: “Contractors who invest time and potentially money in developing their contracting skills will ultimately earn more, stay in contract longer and get to maximise the benefits of the contracting lifestyle more than contractors who don’t.”
Published: Tuesday, September 14, 2010
© 2012 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Please see our copyright notice.
If you want to use any content you have seen on this site then
please request our media pack and
ask for details of our Content Licencing Service.