Contracting in a downturn: 5 top tips

Contracting in a downturn

With the rapid change and uncertainty stirred by the EU referendum, the UK business market is likely to see a period of economic instability. As a contractor or consultant, if you’ve been reading the newspaper headlines, you might believe that only doom and misfortune lay ahead. However, a downturn may actually provide a recipe for future success.

Over the next few weeks, at inniAccounts, we will be examining the impact of ‘Brexit’ on the contracting and consulting markets. We will recruit the opinions of our clients as well as permanent employees and large companies to research what the current economic climate may mean for new and existing contractors. We’ll also be providing guides and tips, built from our unique experience with contractors and freelancers, to help your business flourish.

Here we begin with five top tips for handling, and even benefiting, from an economic downturn as a contractor.

1. Keep calm

The first and perhaps most important thing to do in a changeable market is to keep calm; don’t panic and don’t rush into rash decisions. Remember, even if you find your clients are slowing projects or putting plans on hold, downturns are only temporary. As we saw during the 2008 recession, contractors and consultants were amongst the first to bounce back at the first sign of economic stability.

A period of downturn may even open new opportunities to you. During times of economic instability many companies will seek to cut costs, they may be reluctant to take on permanent employees and will need to work that bit harder to ensure their clients are happy – this is where your expertise could prove invaluable.

2. Be proactive

This is a common piece of advice that is often given to contractors, in reality we all know that the next contract won’t just fall into our laps. However, in times of change it’s especially important to not allow yourself to become passive. You can start by looking into how economical changes may affect your business sector specifically. Next, actively begin to search for your next contract, be prepared to broaden your horizons; in times of downturn you may need to be more flexible and put that little bit extra in.

Your long term existing contracts may also benefit from a proactive review, ensuring that you and your client are meeting your obligations, that you are both happy with your terms and performance and no hiccups are likely to cause an issue or slowdown during the course of the contract.

3. Sharpen your business skills

All consultants and contractors can benefit from honing their business skills. These skills can be anything from your personal management to keeping your knowledge of your chosen field up to date. Periods of slowdown are the perfect time to invest in yourself, ensuring that you remain as employable as possible.

Scour the internet, attend conferences and network to stay ahead of the newest trends in your field and expand your understanding. Take any additional time you have to encourage creative thinking on existing projects or even take on projects you might normally not have time for. Non-governmental organisation and local community projects are a great way to keep your skills fresh and meet new contacts.

4. Clean up and update

Has your workload quietened? Waiting for the next contract to begin? Now is the perfect time to get on with some spring cleaning. Ensuring your inbox, files and work space are clear is a great way to keep yourself organised and on top of your contracts. Take the time to ensure your accounts and expenses are in order to avoid any surprises down the line. Most importantly, you can update everything. Use the time to update your CV, LinkedIn and online profile as a whole. You can join new forums and groups to build your knowledge, reconnect with old contacts, form new networks and examine the companies you would like to work with in the future.

You can use this time to boost your confidence as well as your profile. Request references and testimonials from your previous or current clients. Use the time to ensure everything you need, including yourself, is up to date, tidied and ready to go for the next contract.

5. Manage the pounds

Unfortunately a downturn is unlikely to be the time to make large scale purchases, with economic instability often comes the tightening of purse strings. In truth, most of us know we can save money; by cutting out our Monday morning latte, cancelling our Netflix subscription or eating out less. But budgeting really comes down to having a firm understanding of your finances.

To keep ahead of your finances try to ensure that you keep track of all your income and expenditure, keep receipts and claim for all reasonable business expenses. Fundamentally, keep up your emergency buffer fund; this fund will ensure that can weather any potential downturns ahead.

Follow the conversations on Twitter @inniAccounts and join our LinkedIn network to hear first of the upcoming posts in this series. 

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