Rate glass ceiling

[NorthWestPerm2Contr]

So basically no matter what I try I end up with an average of 500pd/2500per week, at best
I tried having two concurrent contracts at 500pd each but only 2 and 3 days a week
then I tired two remote ones both at a lower rate but summed up to a 2.5k / week
Finally now I have a slight chance of getting a 5day/week contract at ca 500/day

Now this is a slight improvement as I won't have to juggle things between clients, but obviously I still end up getting the same money-wise.
How the f__k does one step up from this? I want to retire before I'm 70.

£500/day is plenty if you pay yourself as a normal contractor would i.e. up to the higher tax threshold + expenses. That way you should have at least 30k a year building up in your business account which you can use to invest in pension, property or just leave for a rainy day.

Most people in this country survive on salaries such as 30-35k (2k/month after tax) so £500/day is a good amount!

[NotAllThere]

You can usually increase your rate to some extent, but to effect a real sea-change, you have to change your model.

At the lower earning end of the classic contractor, there are those on £30k-£50k a year say. With the skills they have, they might be able to do 10% better, but chances are they won't. Their only option is to reskill with something worth more. That'll get them up to the next level £100k-£250k or so.

I did this when I went from VAX/VMS programming to SAP.

The level after that is around the £1M mark. To get near there, you'll need to be making money while you're sleeping - i.e. passive income. That's either done through products or having employees. Another possibility is to be an industry known guru, and consult for a few days a week with many different clients.

I'm possibly beginning to be at this level through products and consultancy. Last year I made ~£35k from software sales. This year I anticipate rather more.

There are very few people using the classic contractor model who make more than £200K. You need to change the way you do business.

[quackhandle]

You could always go into management (if not already there) roles. I've seen those paying slightly more (both permie and contract) when compared to technical jobs, but I have had friends/collegues go from being technical bods playing with new tools/software/apps, etc to spending all day in meetings, sending emails and never having enough time to doing what they really enjoy ie technical, geeky stuff. They might have been on more money but they worked much longer hours and never seemed any happier.

Good luck.

qh

[yasockie]

You can usually increase your rate to some extent, but to effect a real sea-change, you have to change your model.

At the lower earning end of the classic contractor, there are those on £30k-£50k a year say. With the skills they have, they might be able to do 10% better, but chances are they won't. Their only option is to reskill with something worth more. That'll get them up to the next level £100k-£250k or so.

I did this when I went from VAX/VMS programming to SAP.

The level after that is around the £1M mark. To get near there, you'll need to be making money while you're sleeping - i.e. passive income. That's either done through products or having employees. Another possibility is to be an industry known guru, and consult for a few days a week with many different clients.

I'm possibly beginning to be at this level through products and consultancy. Last year I made ~£35k from software sales. This year I anticipate rather more.

There are very few people using the classic contractor model who make more than £200K. You need to change the way you do business.

I totally agree with your approach - my Ltd subcontracts bits of work to up to 10 people in the busiest of times - this allows me to do all the things you mentioned above - becoming recognized, even publishing a book etc, but my gripe with this is that I can get a few 500pd contracts and probably tons of 250pd if I wanted to, but that doesn't help in any way to scale my business - the management overhead totally eats into profits and at the moment, I just don't see myself handling more than 2 or 3 clients simultaneously and even if I did, it wouldn't be worth it, relatively speaking - the margin is simply too low.
If I subcontract to qualified people, I still have to spend a bit of time, managing things.
If I send this to cheap people I have to spend even more time fixing things.
In the end no matter what I scenario I follow, summing up I earn less than 500pd, total, combined, in every scenario, which obviously motivates to me to do the obvious and rid of the extra workload, which is exactly what I did very recently.

[eek]

To get near there, you'll need to be making money while you're sleeping - i.e. passive income. That's either done through products or having employees. Another possibility is to be an industry known guru, and consult for a few days a week with many different clients.

I'm possibly beginning to be at this level through products and consultancy. Last year I made ~£35k from software sales. This year I anticipate rather more.

+1. To up your income you need to find your way around it and get to the other side.

To do that you need to differentiate yourself from others and find something that allows you to bypass agencies and the consultancies.

You probably need to offer either a very value added service for which you can turn up very occasionally and charge £x,000, a service which someone else provides from which you get a cut or a passive service or produce which people pay big bucks for.

[d000hg]

I totally agree with your approach - my Ltd subcontracts bits of work to up to 10 people in the busiest of times - this allows me to do all the things you mentioned above - becoming recognized, even publishing a book etc, but my gripe with this is that I can get a few 500pd contracts and probably tons of 250pd if I wanted to, but that doesn't help in any way to scale my business - the management overhead totally eats into profits and at the moment, I just don't see myself handling more than 2 or 3 clients simultaneously and even if I did, it wouldn't be worth it, relatively speaking - the margin is simply too low.
If I subcontract to qualified people, I still have to spend a bit of time, managing things.
If I send this to cheap people I have to spend even more time fixing things.
In the end no matter what I scenario I follow, summing up I earn less than 500pd, total, combined, in every scenario, which obviously motivates to me to do the obvious and rid of the extra workload, which is exactly what I did very recently.

You need employees not subcontractors who cost nearly as much as you do.

[Bexter]

+1. To up your income you need to find your way around it and get to the other side.

To do that you need to differentiate yourself from others and find something that allows you to bypass agencies and the consultancies.

You probably need to offer either a very value added service for which you can turn up very occasionally and charge £x,000, a service which someone else provides from which you get a cut or a passive service or produce which people pay big bucks for.

This topic in general is something I've been thinking about for a while. I feel I have reached the highest point I can for at least the next 5 to 10 yrs, before the big big jump up, so I'm starting to question where do I go from here.

It seems like starting my own business is the only way to start earning more. Whilst I am really keen to start my own project management firm, I'm finding the jump from single contractor to small firm quite daunting. But I do think in summary, its the only way to start earning more.

[eek]

You need employees not subcontractors who cost nearly as much as you do.

Given the rates many agents are currently advertising are you sure of that fact?

To make it worthwhile you need to ensure that the value being added justifies the client paying you far more than you pay the contractor. To do that you are going to have to provide something neither the contractor or client can get from elsewhere and justify your markup.

[d000hg]

Given the rates many agents are currently advertising are you sure of that fact?

He said this is work paying ~£500pd didn't he? That suggests it's not something you could far out to £200pd contractors...

[beaker]

As others have said, £500pd is by no means bad and for many probably as much as they can realistically earn in their relative areas of expertise. It's a comfortable, but not extravagant, life. To get to £1,000 per day as a contractor you need to be very senior or a known expert in your field.

Otherwise you need to look at other models...
Can you run a training course (like Certified Scrum Master) and charge £1,000 per person to 10 people at a time?
Can you write an e-book and sell a few thousand copies on Amazon per year?
Can you bring people in on £50K/year or £300/day and charge them out at £1,000 per day?
Can you package your service into a product and generate recurring revenue?

Nothing in life comes easy, but contracting is a pretty easy life!