Overcoming financial hurdles

Many people wanting to become IT contractors feel held back from taking the leap due to financial concerns. Leaving a stable job with a steady wage to strike out on your own can be daunting. But don’t let a lack of startup funds derail your dreams of being an independent IT consultant.

The biggest psychological barrier is often inertia – staying stuck in your current situation because it feels “safe,” even if you’re feeling unfulfilled. Remind yourself that consistency doesn’t equal security in today’s rapidly evolving job market. Contrast your fears of going independent against the immense possibilities that an IT contracting career offers: being your own boss, setting your own schedule, choosing exciting projects that allow you to expand your skills.

You do not need cash reserves, if you have a budget

While having some cash reserves is ideal when starting any new business, a lack of seed money doesn’t have to prevent you from launching as an IT contractor. With some smart planning and cash flow management, it’s very possible to get up and running without a large upfront investment.

Start by thoroughly mapping out your estimated monthly expenses. How much income will you need to earn to cover rent/mortgage, insurance, food, and other basics? Look for ways to trim unnecessary costs during your startup period – downgrading cable, minimize dining out, etc.

Next, identify any debts you can pay down or pay off entirely using assets like savings accounts or tax-advantaged retirement funds. Credit card debt with high interest rates should be priority #1. Eliminating or reducing interest drains on your cash flow is crucial.

Give yourself time

Once you have a clear picture of your spending needs and cash reserves, you can determine how long your personal cash flow will last without income – 6 months? 12 months? This gives you a time frame to land those critical first few clients and generate positive cash flow.

Don’t be afraid to start small with your contracting business – a handful of part-time gigs while keeping your day job. This allows you to test the waters and build your client base at a lower risk level. Over time, as your pipeline grows, you can transition fully to independent consulting.

Leveraging remote work capabilities can also help maximise your earnings potential without being location-dependent. And in the beginning, minimise overhead expenses like dedicated office space – work from home when possible.

Get a guide

With some financial know-how and a strong desire to be your own boss, the money concerns shouldn’t hold you back from pursuing your dream of successful IT contracting. Start your planning today, step by courageous step, and you’ll get there!

I would love to support you on your journey as someone who has transitioned from permie to consultant over 20+ years ago https://devops-contractor.scoreapp.com/ after the quiz you will have the option to book a free 1:1 call with me to discuss your next steps with no obligation. I look forward to seeing your results!


Liked it? Take a second to support Neil Millard on Patreon!
Become a patron at Patreon!

Leave a Reply

Your email address will not be published. Required fields are marked *