OT: Going from Employee to Contractor

I am currently working as a full-time employee (EE) and doing some free lance work on the side, weekends and moonlight hours.

I was hired on after contractors kept dragging my company over the coals on projects, as they did not have an EE prior, it just got cheaper to hire someone full time.

However they really do not have enough work to have someone full time, half the time I just end up revising old drawings that someone screwed up 10 years ago. Basically draftsman work that they could've hired someone at $15/hr for. Every now and again I get to bite my teeth into a special project but its not often.

At this point I want to broach the subject of just going contract with them (I'm much cheaper than who they were using previously), this would open up more time for the free lance stuff that I actually enjoy and progress my knowledge. With current company included I have about 3-4 clients that have steady work for me.

1. Any thoughts on going full contractor? Other than the obvious, insurance, etc.

2. How do I bring this up without affecting relations with my current company?

First word of advice: keep good records. Most small business failures are caused by poor record keeping.

Second, don't under price your services. If you get 50% billable hours you will be doing well. Also remember that you will have to pay FICA (Social Security and Medicare) Workman's Compensation, and in many states Unemployment taxes/premiums.

Third, form an LLC, Sub-chapter S, or similar corporate structure to separate your personal assets from your business assets

Fourth Fifth, Sixth through Tenth, make sure your spouse is on board with this decision. Without that support you can't make it happen.

shawnhimself said:

2. How do I bring this up without affecting relations with my current company?

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That is a function of your approach and their open mindedness. Just be up front and tell them you think you can do better for yourself and them by going on your own. Explain their savings, and offer to put them on a priority "on call" basis. I've left a couple of employers to go on my own, and they were my best clients for the first few years - until their needs changed.