November Meeting Recap: Contracting: Is it All Worth it?

by Andrea Geddes-Barnes

At the November general meeting, three independent contractors, Carol Lawless, Roxanne Eszes and Lori Jankowski, formed the panel to discuss the good and the bad aspects of working for yourself. They each introduced themselves and then answered questions from the floor.

Carol Lawless was downsized after twenty years of working for an insurance company. She has been a consultant for a year and is also establishing a digital art company. That same insurance company has turned into her biggest client. Carol does editing, website design, and even marketing brochures. She finds contracting empowering and is no longer frustrated by office politics. She has become the adviser. As long as she continues to meet her deadlines, she now has the freedom to walk her dog in the middle of the day if she chooses.

Roxanne Eszes has been consulting for 15 years. She began her working life in engineering, but now writes content for her clients in the insurance and financial services industries. While it was difficult to start, Roxanne is thrilled to no longer be working at the whim of someone else. In the beginning, she rented office space, but is now content to work from home. This can be isolating (her client visits may be only once a month), but joining the Rotary Club has helped. Her work is lucrative and fulfilling.

Lori Jankowski began contracting two years ago because she was laid off from an American company in Waterloo. She works with a partner, Peter Szabo, and finds his support invaluable. Their clients are mostly software and insurance companies. She does manuals, online help and website updates. She now earns more for herself than she ever did working for someone else. She chooses to work only about 25 hours a week, but those are “hard” hours. She has no desire to work for someone else again.

What personality traits do you need to be a contractor?

Lori believes you need to be focused, confident and able to tune out distractions at home. Networking is important and you need to continue to sell yourself. Carol tries to “close the door” to her office (the problem is she doesn’t have a door there). The kids and laundry sometimes call to her, but she does her best to ignore them.

Where do you go to learn about setting up your business?

Use the small business centre in your city. In Kitchener, go to City Hall and in Guelph, try the Guelph Enterprise Centre. These organizations can advise you on the basics of being in business: registration, type of company (sole proprietorship, partnership or corporation), tax reporting and tax payments.

How much do you charge to earn the same as when you were an employee?

Carol feels you need to add about 20% more to your rate. Roxanne suggests you charge more than that because you are no longer being paid for the time you don’t work. For example, you might work 40 hours, but only bill for 30 hours. Roxanne’s advice is to charge 60% more. Editor's note: Carol rechecked her numbers after the meeting and now thinks Roxanne's 60% estimate is probably more accurate.

How do you sell yourself without previous industry knowledge?

For Lori, it is not difficult to be able to sell your services in a new industry because you use the same research skills you always do. For the first time this year, she wrote an insurance policy and did not find it that difficult. Roxanne chooses to stay in the insurance and financial industries because there is enough work to keep her busy. After six months of her client just signing off on her work, Carol now finds the client is selling her.

How do you get new work?

Everyone agrees that you need to network (I hear the STC is a good place to start). Roxanne has only ever landed two jobs that were not a result of networking (and she regretted taking both of them). She is often asked to speak at financial planning conferences and is considered a SME in the field. It can take years to land a client. Roxanne’s 12 years of “courting” Manulife finally resulted in getting work from them this summer. Carol believes in always following through on a promise made to a client. Lori explains that if you keep a good relationship with your clients, they will sell you. She sometimes asks her clients to provide a letter of reference.

How do you create an estimate?

For Lori, it is a bit of an art. She used to be frustrated when clients changed their minds, especially when she or her partner had already clarified a specific point in advance. Now they tell their clients to expect change. Carol does her best to be clear on the scope of the project from the beginning. She lets her client know in writing that changes will affect the cost. Roxanne finds that new clients tend to be wary of being charged hourly. If the project is small, she quotes a fixed price. After a few projects with the same client, she can point out that a job requiring fewer hours would have cost the client less if only it had been billed hourly.

What are the negatives of independence?

Lori finds the downtimes are a good thing at first (especially in the summer), but if they last more than a month, it can be hard. The positive is that most contracts are long-term and allow time to see ahead to potential slowdowns. Carol is sometimes frustrated with the lack of built-in technical support a company provides. Roxanne is so busy that she decided to hire an accountant for the first time this year to give herself more free time. All three recommended having a spouse or partner who has a steady income and benefits.

If someone offered you a job at the same pay, would you take it?

Carol was the only one to consider this an option, saying the offer would have to be pretty special. Roxanne offered to be her support group if Carol were ever tempted.

About Andrea Geddes-Barnes

Andrea lives in Guelph and is most of the way through the Technical Writing certificate program at Humber College. She holds a handful of university degrees in French and business and has worked in education, the hotel industry and direct marketing. Her sideline interests include: fundraising for diabetes research, running a local water polo club and competing in triathlons. She is currently immersing herself in a new field: the leasing business.