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Thinking about becoming an IT consultant?

Becoming a freelance IT consultant is an ambition for many IT professionals, but what are the benefits and pitfalls, and how can you make the leap successfully?

There’s a well-worn path by in-house IT professionals who become freelance consultants.

The appeal is easy to understand; wages can be higher, the role brings more variety and you’re not tied down to the usual work routine.

But going freelance also brings its own pressures and challenges that someone who is employed full-time doesn’t have to face, like never knowing when or where your next job might come from.

That said, it is clearly a popular career route.

Research by The Association of Independent Professionals and the Self-Employed (IPSE) found the number of highly-skilled freelancers rose by 47 per cent between 2008 and 2018 to hit 4.2 million people, around 6 per cent of whom are information technology and telecommunication professionals.

A richer experience

So, what are the benefits of going freelance?

Liam Shah is Head of People and Development at QUANTIQ, a leading technology consultancy that helps clients in sectors from retail to healthcare, professional services and manufacturing to digitally transform and streamline their processes using the latest enterprise technology.

He said: “Being a consultant is a much richer experience if you are looking for technical challenges, diversity of work, the highest-quality colleagues and exposure to cutting-edge technology.

“You get to work with different kinds of clients and industry sectors on a wide variety of integration projects, which means you can always increase your knowledge.

“It suits someone who is willing to take ownership, control situations, is methodical and diligent, professionally curious, willing to go the extra mile, open to travel, has an interest in business and enjoys problem solving.  

“The kinds of roles that are available are incredibly varied; anything from implementation to design, project management, support, sales and account management.”

Higher expectations

Clearly, one of the biggest draws for those considering consultancy is the improved earning potential, so how much do IT consultants earn?

Liam said: “IT consultant salaries vary hugely, but as a rule of thumb, a junior level consultant can expect to average around £35-45,000, mid-level is around £45-60,000 and senior level roles are around £60,000+.”

But being paid a premium means expectations are high.

Victor Omosevwerha has been a freelance IT consultant for 19 years and is the founder of Gridlockaz Consulting.

He said: “You’re exposed to all kinds of technology, but then you’re expected to have a very deep understanding very quickly and be able to provide solutions.

“The kind of people who can thrive in this industry are those who like to continuously study and get to grips with new things.

“If you’re not that way inclined, then this might not be the career for you.”

Terms and conditions

Often a contractor will work for one client full-time for a set period or until a project has been delivered, based in the client’s office.

Victor said he has worked on projects that have lasted from three months up to four years.

As well as showing that you have the right skills to complete projects on budget and on time, you must also prove your commitment, which can mean working late and spending time travelling to jobs.

Liam said: “As an organisation we operate a 40-hour week, but the needs of the clients drive when you are needed sometimes and of course there is travel on top of that.

“You need to be prepared to travel at least 50 per cent of the week.”

However, once they become established, in-demand freelancers can find that they are able to negotiate their terms before taking on a new project.

Victor said: “I used to do a lot more travelling but these days I spend around 60 per cent to 80 per cent of my time working remotely and have a much better work/life balance.

“You only get to that point having amassed a certain amount of skills and have built trust in what you can do by having a track record of working independently and delivering projects.”

Winning work

One of the main concerns for anyone considering becoming a contractor is building a strong pipeline of paying projects. 

Many freelancers choose to work with a consultancy which places them with clients, which means they don’t have to spend time marketing themselves and sourcing new work, though they do charge a fee, typically of around 10 - 15 per cent of a contract’s value. 

But many others choose to market themselves, often through platforms like LinkedIn and online job boards.

Liam said: “It’s important to have an up-to-date CV which really focuses on your achievements.  

“Talk about the projects you have delivered, including the scope and what the desired outcome was. Was it on time and on budget?

“Talk about the systems experience you have and the extent of that experience and knowledge, as well as what you are looking for and hoping to achieve going forward.

“Other than that, there are various functional areas that can help such as project management experience.”

While it can pay off to develop a particular area of expertise, this should not be at the expense of more general skills, as contractors need to be versatile and adaptable.

Potential areas to specialise in include finance, supply chains, retail, HR, development and system architecture.

Which business structure?

So how do you get into IT consulting? As a freelancer, one of the first big decisions you’ll have to make is how to set yourself up as a business.

It’s worth doing your research and taking advice, but Stephen Hollins, a director at MyPay, which offers payroll, invoicing and administrative services for contract and freelance workers, says you have two main options: form a limited company or work through an umbrella company.

He said: “If your turnover is more than £20,000 a year, a limited company can be a great option due to the tax efficiency it provides and because it keeps your business liabilities separate from your personal finances.

“However, you must beware of legislation called IR35 that says if you contract your service to a client but are basically acting as an employee, you could be hit with a big tax bill.

“This is something your agency or accountant should discuss with you prior to starting an assignment. 

“An umbrella company can be a great solution for freelancers working on assignments that are lower paid, short term assignments or those who do not want any added admin.

“The freelancer is essentially employed by the umbrella company, which then pays them as well as making all the necessary tax and National Insurance Contributions on their behalf.”

Lucrative and rewarding

Going freelance is a big step and it requires an entrepreneurial outlook as well as outstanding IT expertise.

But if you have those qualities, the life of an IT consultant can bring a host of benefits.

Victor said: “My advice to anyone thinking of becoming a freelance IT consultant is to go and write your CV straight away!

“But you can’t be complacent. You must always be looking for work, even when you’re in work.

“Your job is to be a professional job hunter. If you have that attitude, you’ll be fine.”

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