[rabbits_unite]

What is the most important thing to know about contract work, for someone who had only done full-time employment jobs before?

E.g. Do you need to be an some online platform to get projects? How do you protect yourself from financial abuse (someone not paying you)? Do you need a lawyer at all times? Should you create a legal entity of some sort so you're a "company" and use that instead of getting projects as an individual?

[gregjor]

> Do you need to be an some online platform to get projects?

No. You need to either find work on your own or have a pipeline. Word of mouth and referrals work best. Start with former employers and colleagues. Companies in related businesses can outsource to you -- web design and marketing firms usually outsource programming and even system admin, for example.

Alternately you can work through an agency (10X Management represents me as a freelancer), or a contract shop such as TopTal.

> How do you protect yourself from financial abuse (someone not paying you)?

Work for people you trust, walk away from customers who give you a bad feeling. Don't work on spec, don't discount. Don't put yourself in the position of your customer owing you a lot of money. Agree on clear deliverables and prices. Contracts will not protect you.

> Do you need a lawyer at all times?

No. You should never need a lawyer unless you need to negotiate a tricky NDA or contract. Once you have lawyers involved your billable hours go down and you end up paying the lawyers. In most US states breach of contract and similar disputes go to arbitration anyway, a process that can take a long time and more often than not ends up with both sides splitting the difference and losing money in the process.

> Should you create a legal entity of some sort so you're a "company" and use that instead of getting projects as an individual?

You can if you want, but unless you have employees or significant assets at risk you can operate as a sole proprietor in your own name. An LLC or S-corp can offer some protection in case of a lawsuit, but you should avoid those possibilities in the first place. An LLC or corporation may offer some tax advantages, but generally single-owner LLCs just pass through income to your schedule C (business income). Keep it simple, no reason to create a bunch of paperwork and compliance issues -- focus on billable time.

Don't get in the position of a customer owing you a lot of money, and don't put yourself in the position of owing your customer a lot of work you can't deliver on.

I have some free (no ads or popups or affiliate links) articles about freelancing on my site typicalprogrammer.com.

[1attice]

1. Contract work can take many forms. I found great success with informal "please keep my business online" work when I was very raw -- part time network admin is how it was called, and I was a PTE of a couple of small orgs.

2. Later, I was more seriously into contract work, and I was dealing with companies that wanted me to incorporate. In my jurisdiction, this cost $300 and happened instantaneously after a visit to a government website.

3. If you live in a jurisdiction with sales tax(es), you will need to collect your sales tax. This is actually one of the worst/most irritating aspects.

4. do purchase private dental and health care insurance. You never know what will break loose next, because you're mortal. (A fact that tech folks can easily forget, myself included).

5. Back to the primary frustration. In my jurisdiction, the government can be *really harsh* with folks that aren't collecting sales tax. This can result in frozen accounts. I have a friend who forgot to collect sales tax while driving a literal taxi cab, and wound up, over half a decade and several careers later, with frozen bank accounts and an emerg move back home with the parents -- at 35, because of a tax mistake he made in his twenties.

If you're a business, you are subject to business-grade laws, and you can get in a lot of trouble, especially if you're ever asked to certify or attest that a particular system is effective, safe, or secure.

So, yeah, if you wind up doing this work for more than a few months, get a lawyer on retainer and get an accountant.

This sounds like more hassle than it actually is.