With global economies spiraling out of control, stock market volatility, banks going bust and talk of imminent recession, businesses and individuals are justifiably a little worried.
Whether you’re a contractor, freelancer or consultant you are perhaps a little more worried than most as you are more likely to get a tap on the shoulder before any permanent employees see redundancy. However you are no different to anyone else as bills still have to be paid, so what can you do now to stand the best chance of surviving the challenging times ahead?
Welcome to the first part of our ten point guide on surviving the credit crunch.
Understand and accept what is happening
Most people now believe that we are in for a spell of economic pain and recession, with which comes job losses and falling rates of pay. We’ve been here before and we’ll get through it again so accept and fight your way past it.
Timing can be everything
A major supplier to the construction industry recently laid off a significant number of contractors which flooded the market with engineers having similar skills. These contractors would have ended up touting for the same jobs and inevitably there would be sacrifices; lower rates, less interesting jobs or perhaps longer commutes.
There is no harm in keeping your ears open to avoid being taken by surprise and even explore opportunities that are more secure. A useful trait is to be one step ahead and beating any possible rush.
Watch out for folding umbrellas in the storm
If we do enter a recession it is inevitable that companies will fold, Umbrellas included. If you use such a service, consider what you’d stand to loose if yours went under. Would it be a month or a week’s income? Perhaps you could change your arrangements with your umbrella to be paid weekly to minimize the impact of the worst happening.
If you want to go a step further to protect your income then having your own limited company is probably the safest option. The real benefit here is that you are in full control of your income and by using a service such as inniAccounts the experience of running a business doesn’t have to be painful.
Whatever you opt for, invoice frequently, monitor payments and as soon as you see the first sign of late payments, be alert.
Start saving (more)
Perhaps you consider yourself a good saver but there may still be opportunities to save a bit more. Are you paying for a gym membership and only going 4 times a month? Perhaps find a ‘pay as you go’ gym to save a few pounds. The more cash in the bank the less stressful any time out of work will be, and at the moment it may pay to have a slightly bigger buffer than normal.
Make yourself and your job as indispensable as possible
What if your client has to loose 50% of their contractor workforce? It is common for lists of contractors to be drawn up to assess who goes and who stays – make sure you’re on the right one. During tough times you need to put in 110%. Build trust, offer help rather than be asked, take on extra work, deliver high quality results, keep your promises and stay friendly with your client.
Sometimes things are easy for you to do that are difficult for your clients, which mean a lot if you can be seen to be helping out. Don’t forget that these tough times affect pretty much everyone and your clients are probably struggling due to budget and resource cuts, schedule pressures etc. Doing little things for free will nearly always pay off.