There is the also advantage of good hourly rates, but on the flip side contractors are the first to be let go during a downturn.

I went contract when I realized two things: 1) there was more 1099 work available than I could shake a stick at, and 2) the tax advantages of being an LLC-S corp are too great to ignore. I am gathering what I learned and storing it in the 1099 forum on linkedin for the benefit of others.

As you said, your list is boiled down. There are upsides and downsides to everything. Consulting is an exciting field for those who have the intestinal fortitude to make it work. Just because someone is technically competent, it doesn't mean they can run their own business (manage money, marketing, sales, prospecting, the technical aspect, accounting, janitor, etc.).

One big key skill a person must have is self-discipline to make it happen. It can become too easy to slack one day, and then the next, and the next, until finally, no business exists.

I am currently president of a great organization that provides many benefits to technical consultants - IT, computer, etc. The Independent Computer Consultants Association (ICCA - www.icca.org) has served this contingency of the market for over 30 years. I've learned over the past 15 years of being a member that I don't have to go it alone. Each year, the minuscule amount I pay for the membership is recovered a number of times over from the relationships with fellow consultants. Through them, I can handle many of my customers' needs that are outside of my talent or skill set. The brotherhood/sisterhood is very important to me and helps my business grow and thrive.

If you are considering independent consulting, check out the ICCA. And discipline yourself like never before - you'll need it.

I have done contract work for several years. The issue is that you don't know if you will have a contract week to week - month to month. It also appears that teh contractors are cut during the holidays which don't make family memebers happy. Overall, I wouldn't do it again!

You failed to recognize one major 'thumbs up' to being a contractor - the mitigation of risk. I typically have 5 - 8 clients that I work for at any given time. And I have found it considerably more secure to have 5 – 8 bosses to work for than only one. Yes, I have to deliver immaculate service and constantly recruit replacements as companies outgrow my service or I complete a project. However, it is not significantly more pressure than I experienced as a fulltime employee. And if one of my clients goes away, I go out and find a replacement. And it is not a 100% replacement of income as in an employment situation. In fact, I now consider it a huge risk to take a full-time position. My 2 cents

I started my CTO consulting firm after a staff reduction at a F100 firm. Having 6-8 clients can be challenging, but loads of fun. The key not mentioned in the article is fiscal discipline. Doing your financials (including taxes)correctly and on time is crucial. Too many fail 3-5 years down the road when the IRS catches up with you. A good accountant is a must if you can afford it.

I have seen the opposite during the current downtrend, more firms WANT contractors and specialized expertise. Contractors are not always the first to go in all cases, in some, they are the last.

The most challenging in the contracting world right now is health benefits. The costs are going up too fast. It's eating up the margins.

Being a self-employed contractor is not as desirable as it may seem to some because of the need for extensive project documentation.

The real key to successful contracting seems is that a contractor has to very thoroughly document the work to be done, get client agreement expressed through contracts, and establish what measurement or performance criteria dictate when the contract is completed.

By thoroughly documenting your work for larger projects, this helps prevent legal concerns and misunderstandings, provides documentation for the client, and shows the cliemnt how professional you are.

I have seen many a contractor have problems due to last minute changes made by the client that totally change the timeline and costs for a project in progress.

Other times, I have seen clients unethically delay on payment in full for completed projects because they want unbilled "extras" to be added to projects.

The bottom line is that self-employed contractors have to wear a large number of different hats to make their business work. Some thrive in this environment while others sink like a rock.

I've been contracting for over 20 years (what's called a programmer/writer--I write developer docs). I love being my own boss, ha-ha. There are a number of crucial mistakes beginning contractors make:

* Assuming the good times/money will always roll in. I have six months in cash and regularly savings in the double-digits.
* "Forget" to pay all of their taxes one quarter, with the intention of catching up the next quarter. No, no, no! The IRS, despite the incessant commercials to the contrary, are not warm and fuzzy. You will not come out well if you fail to put aside enought to pay Uncle Sam.
* Forgetting to keep up. This does not happen immediately, but I recommend at least one quarter of class time per year. Don't know C#/.NET? You are tossing away a lot of potentially lucrative contracts.
* Failing to take some time off. A burned out contractor is not a pretty sight.
* Failing to underpromise and overdeliver. It is much better to turn down a lucrative contract with onerous conditions/schedule than to take it and fail. No one will rememeber the terrible conditions. Everyone will remember you failed.
* Failure to CYA. Keep every email, Cc at least one person on every email, keep scrupulous records. Once I had to dig into a developer's recycle box and pull out his review copy to prove he had not made any remarks on a topic that he later threw a fit about. From then on I kept every review copy.
* Failing to "fit in". Who cares that you are a great DBA if you annoy everyone?

Contracting work is not much different than full-time work. Show up on time, sober, and do more than asked.

doug in Seattle