Exit Plans?

[willendure]

So you are on the bench or getting close to end of a contract and prospects for the next one don't look good. Got any plans you'd care to share?

I am 49 and feel I won't be retiring until at least 65, so I need at least 16 more years of work and putting money away to do it. Lucky even, as I think most people in this country are strugling with saving anything.

Current contract finished October, and no way would I accept a renewal as current client is utter chaos. Its very clear to me now that I am only there for the sake of survival as one of the few hold-out outside IR35 contractors left.

Considering paying my mortgage off in full, as I have cash from an AirBnB sale to do it. It feels insane to do that given current and expected inflation levels. But also I don't think inflation is ever a straight line - its more like inflation punctuated with recessions and debt looks very different in a recession. Would be nice to be able to pare down all my outgoings for survival mode - done it before in 2001 and 2009 and that is why I am still going as a contractor.

Options?
Find a permanent job (having never done aything other than contracting for 25 years )

Find another contract ASAP that goes on longer than October, and ditch this one.

Get into some other business entirely. I have a building that could be put to that purpose, or maybe exchanged for a different one with more suitable commercial prospects.

[willendure]

Also got 18 years accounts in profit with this Ltd company, and a mortgage for 10 years that has been consitently paid. I don't think that counts for a lot but something at least in terms of credit rating. Banks are not lending right now - I phoned about a mortgage a while ago and they quoted me 14% (i.e. "get lost").

[Dorkeaux]

Also got 18 years accounts in profit with this Ltd company, and a mortgage for 10 years that has been consitently paid. I don't think that counts for a lot but something at least in terms of credit rating. Banks are not lending right now - I phoned about a mortgage a while ago and they quoted me 14% (i.e. "get lost").

Be of good cheer, you seem to be in a very good position, overall.

The only times a contract has "ended" for me has been when the company has failed, or I have left. As I keep saying, the lenght of your current contract only outlines the terms for that period of time. It doesn't guarantee you work, nor bind you to the client for that period.

It sounds like you won't be losing any sleep over the client (assuming a new role appears), and it's usually easier finding a contract from a position of power.

So I'd say start looking (seriously) and taking calls. Why not?
You might be pleasantly surprised. If your notice period is two weeks, most clients take longer than that to sort out your onboarding.

On another note, 14%??!! FFS, I know timing and LTV ratio affects mortgage rate, but that is unusually high.
We've been carrying a medium amount on our mortgage at a tiny rate for years. We could pay it off, but our return on the money is currently greater than the mortgage rate. That could change when we come off our current deal.

You might want to chat to a mortgage broker.

[agentzero]

(SNIP)
Current contract finished October, and no way would I accept a renewal as current client is utter chaos. Its very clear to me now that I am only there for the sake of survival as one of the few hold-out outside IR35 contractors left.
(SNIP)

If the client is paying on time, accept a renewal and stop caring. Do as little work as possible and use realpolitik to defer responsibility and blame for issues.

Don't leave until you've already started the next contract. Having something else to occupy you during the day now will help you forget how bad the client is to work with.

[willendure]

On another note, 14%??!! FFS, I know timing and LTV ratio affects mortgage rate, but that is unusually high.
We've been carrying a medium amount on our mortgage at a tiny rate for years. We could pay it off, but our return on the money is currently greater than the mortgage rate. That could change when we come off our current deal.

You might want to chat to a mortgage broker.

Sorry, should probably have made clear this is a commercial mortgage for business premises I am talking about, not for my home. If the business was to swap the current building for something with different economic potential like a shop.

But the mortgage I am thinking of paying off is the one on my house.

[willendure]

If the client is paying on time, accept a renewal and stop caring. Do as little work as possible and use realpolitik to defer responsibility and blame for issues.

Don't leave until you've already started the next contract. Having something else to occupy you during the day now will help you forget how bad the client is to work with.

Lol. I already stopped caring. Think I can just about keep that up till October without losing my mind. Its not a terrible place to work, and most people are quite nice, its just... offshore agencies, clueless im-not-technical middle managers, mountain of tech debt, the whole thing runs on chinese whispers, you can never get anything done because the spec is wrong and devs and testers know they can avoid doing any work by picking holes in it. In my opinion this client would get a lot more value for money by hiring a small team of good local UK contractors. I will try and do a reasonable job for them for the amount of time I have agreed to do so for but not going to trying hard enough to care.

I have enough self respect left to know not renewing is the right thing to do.

How about any of you? Got any exit plans or just going to keep on sticking it out as a contractor?

[courtg9000]

So you are on the bench or getting close to end of a contract and prospects for the next one don't look good. Got any plans you'd care to share?

I am 49 and feel I won't be retiring until at least 65, so I need at least 16 more years of work and putting money away to do it. Lucky even, as I think most people in this country are strugling with saving anything.

Current contract finished October, and no way would I accept a renewal as current client is utter chaos. Its very clear to me now that I am only there for the sake of survival as one of the few hold-out outside IR35 contractors left.

Considering paying my mortgage off in full, as I have cash from an AirBnB sale to do it. It feels insane to do that given current and expected inflation levels. But also I don't think inflation is ever a straight line - its more like inflation punctuated with recessions and debt looks very different in a recession. Would be nice to be able to pare down all my outgoings for survival mode - done it before in 2001 and 2009 and that is why I am still going as a contractor.

Options?
Find a permanent job (having never done aything other than contracting for 25 years )

Find another contract ASAP that goes on longer than October, and ditch this one.

Get into some other business entirely. I have a building that could be put to that purpose, or maybe exchanged for a different one with more suitable commercial prospects.

Same age as me. I'm 50 in September if I live that long (This is debatable - some people here know about my health - I don't generally shout about it)
I have been retired on health grounds since December 2020.
Retirement is crap. Trust me on this.
There have been quite a few threads on "The State of the Market", "Getting back in the game" and other similar topics recently (say this year). The upshot is the market seems so much worse than I ever saw it. I saw the 9/11 crash and 2008 amongst other dips.
I did business brokerage and then published a business deals magazine after I finished contracting. There is plenty of stuff out there and there always is and always will be if you can shift from a contracting mindset or contracting/permie mindset. Be prepared to move quick though on freehold lifestyle businesses with good onsite family accomodation. Depending on location these can move very quickly indeed.
I would always say buy an existing business if you can rather than reinvent the wheel from day one. You have income from day one that way.
I used to regularly publish over £250 mil of stuff every issue, some really weird and wonderful stuff as well as the more mundane.
My other advice is do talk to a good IFA/mortgage broker/commercial finance broker as well as your accountant.
I have other tips on this stuff available if they are appropriate, just ask, will be happy to help I can.

[willendure]

Same age as me. I'm 50 in September if I live that long (This is debatable - some people here know about my health - I don't generally shout about it)
I have been retired on health grounds since December 2020.
Retirement is crap. Trust me on this.
There have been quite a few threads on "The State of the Market", "Getting back in the game" and other similar topics recently (say this year). The upshot is the market seems so much worse than I ever saw it. I saw the 9/11 crash and 2008 amongst other dips.
I did business brokerage and then published a business deals magazine after I finished contracting. There is plenty of stuff out there and there always is and always will be if you can shift from a contracting mindset or contracting/permie mindset. Be prepared to move quick though on freehold lifestyle businesses with good onsite family accomodation. Depending on location these can move very quickly indeed.
I would always say buy an existing business if you can rather than reinvent the wheel from day one. You have income from day one that way.
I used to regularly publish over £250 mil of stuff every issue, some really weird and wonderful stuff as well as the more mundane.
My other advice is do talk to a good IFA/mortgage broker/commercial finance broker as well as your accountant.
I have other tips on this stuff available if they are appropriate, just ask, will be happy to help I can.

Sorry to hear about your health.

If you were to start or buy a small business today, what kind of businesses do you think would do well? Or is that less important than having some particular strategy or experience or funding or something else...?

[pjt]

Same age as me. I'm 50 in September if I live that long (This is debatable - some people here know about my health - I don't generally shout about it)
I have been retired on health grounds since December 2020.
Retirement is crap. Trust me on this.
There have been quite a few threads on "The State of the Market", "Getting back in the game" and other similar topics recently (say this year). The upshot is the market seems so much worse than I ever saw it. I saw the 9/11 crash and 2008 amongst other dips.
I did business brokerage and then published a business deals magazine after I finished contracting. There is plenty of stuff out there and there always is and always will be if you can shift from a contracting mindset or contracting/permie mindset. Be prepared to move quick though on freehold lifestyle businesses with good onsite family accomodation. Depending on location these can move very quickly indeed.
I would always say buy an existing business if you can rather than reinvent the wheel from day one. You have income from day one that way.
I used to regularly publish over £250 mil of stuff every issue, some really weird and wonderful stuff as well as the more mundane.
My other advice is do talk to a good IFA/mortgage broker/commercial finance broker as well as your accountant.
I have other tips on this stuff available if they are appropriate, just ask, will be happy to help I can.

Jumping in here firstly sorry to hear about your health issues!
Out of interest what sort of businesses did your magazine list? I've always got my eye peeled on an exit but never really took it anywhere normally because getting another contract is easier. But I'm aware I've got a fair bit of capital mainly in a number of mortgage free BTL's which I always think can be earning me more elsewhere. Everytime I check the big websites all I ever see being sold is cafes, pubs hotels and franchises which all look more like buying a job than taking over a business. I'd really like to find something I can invest some big money in and with some effort get a fair rate of return on the investment.

[courtg9000]

Sorry to hear about your health.

If you were to start or buy a small business today, what kind of businesses do you think would do well? Or is that less important than having some particular strategy or experience or funding or something else...?

Two answers but not THE answer.

1) Blue collar, Business to business or business to consumer.
2) Hospitality and leisure.

The actual things especially in our age bracket is that you can cope with the change, you can be engaged with the business and make it work and also be happy. That might be artisan cheese making for one person, it could be car leasing or running bin lorries for other people. Only you know the sort of thing that will make you tick. You may also need to think about your family. Apologies for "prying" but it is important. Feel free not to answer this bit but do consider any family in this.

Look for a strong trading profile, solid repeat customer base, good turnover, strongish profit margins, be sure it can support you (and your family). Look for something that has been well invested in, in the past and more recently. There is a good chance that you won't have to shell out for heavy capital expenditure in the near term.

Negotiate keenly on price but don't take the Pee. No stupendous low ball offers that would be worthy of a comedy performance. Be prepared to justify your stance in detail to bolster your negotiating position. If you use brokers, develop a good working relationship with them and listen to their advice and take it on board at all stages during the transaction - from before 1st viewing. A good broker will want to help you.

Be aware that the smaller business the more likely the books will have been "cooked" at some point, especially if paper and metal cash is an accepted payment method, get a specialist accountant to check the books over and advise. Do not get a contractor accountant to do it! Expect an overdrawn directors loan account on pretty much anything you look at.

Take time. Do not rush on buying a business. Ever. If you feel like you are being put under too much pressure to finalise a deal, walk away, there will be others.

Get your team organised at the start. Lawyer, Accountant, Finance Broker, IFA, If you know a good surveyor for property stuff rope them in too!

Remember its a big capital outlay so you have to make the right calls for you and get it right first time.