Tony Harris started specialist financial advice service Contractor Financials in 2002 and has since built it to almost £3 million in turnover. Here, he talks about starting up and the benefits of short-term employment contracts.
I’ve been a financial adviser for around 22 years now. In the run-up to the year 2000 ‘millennium bug’ fear, I was working for an accountancy practice that handled the books for IT contractors that were supposedly going to stop power stations from melting down and planes crashing when the millennium came in. I thought to myself, while contracting was strong in IT there was no reason why you shouldn’t find contracting in other fields as well.
So I set up a website called Contractor Money in 1999, and that was aimed at giving straightforward, user-friendly financial advice to people on short-term contracts, and it really took off. There was clearly a large untapped need for guidance for people who didn’t fit the traditional employment models of self-employment and PAYE permanent employment.
We tried to fine-tune our advice to be geared towards this small but growing community of people who chose to leave the nine-to-five and go for contracting instead.
We set up Contractor Financials as a limited company in 2002 and the firm has developed so much momentum from there. We’re now up to 54 staff and have been able to help more than 18,500 freelancers, and I had a gut feeling this market would grow. Now there are lots of contractors in many professions from journalism to oil and gas to professional services. In virtually any sector, people will be working on short-term contracts.
It works for everyone; the individual is in control of their destiny choosing where and when they work. It can spice up their CV and month-to-month working patterns. They can get to the end of a contract and they can choose to go to a different company if they want to or renew with that existing company. We’ve now got clients that have been with us for 15 years as contractors and have embraced the life.
It’s also a winner for the company that’s employed them as well, because they’ve got access to a skill set they may not have otherwise had within their permanent employee ranks. Also they have a resource they can turn on and off like a tap; as a particular project comes to an end, they don’t then have to wait for the next piece of work for a particular permanent employee to come along.
Tapping in to an existing client base
I was lucky in that I had existing clients that transitioned over to my own company, and my previous website was creating a bit of a stir in the contractor space. I was very confident we’d have enough clients getting in touch with us to help pay the bills, but as for everyone starting a business those initial couple of months while getting set up and buying computers and stuff are always a bit nerve-wracking.
We were able to fund it from our own resources and when it came to expansion we funded that, partly from the income that was coming in but also via taking money out of the equity in my house. As we began to ramp up the staff numbers we needed to think about IT and advertising spending and things like that.
In terms of marketing we try and feature wherever a freelancer or contractor is likely to be searched for information. We’ve been able to work with more niche websites aimed squarely at contract workers and we’ve been affiliated with the contractors trade association. We’ve also made sure we aligned ourselves with service providers that are very much focused on the contractor market.
Marketing during recession
For five years now we’ve had our own inhouse marketing function; we hired someone and now we’ve got a small team of people. The marketing side is important, even during recession. We didn’t cut back on our efforts in terms of making sure our name was out there; far too many companies cut back on their advertising budget during the downturn, and we tried to avoid that because it was important to position ourselves such that when the upturn did come we were in a strong position to exploit it.
We’ve got a large, prominent competitor and we make it clear with us that it isn’t some faceless industrial process our clients are going through, we make sure the clients know that they’re talking to a specialist in our field. Our clients are specialists too, in IT or engineering or law so it’s not a massive leap of faith for them to seek out another specialist and work with them. We’re not trying to be a jack of all trades, we really do stick to our core expertise.
The biggest lesson to learn as a growing company
It might sound corny but the biggest lesson companies on a similar growth trajectory can learn is to invest in people. We probably pay over the odds in terms of our wages, but we get excellent people for it. What looks like the impossible is all of a sudden possible when you have like-minded entrepreneurial intelligence around you. The idea small business owners can do everything by themselves is a recipe for disaster, or at least a missed opportunity. It can be hard to let go but we’ve acquired a skillset where we are greater than the sum of our parts as a firm. No longer is everything being driven just from one person. I have a team around me that are driving the business forward for their own benefit and the good of the firm.
The housing market is in rude health and people are more and more aware of the need to provide for their own retirement and we’ve had really good news in recent Budgets around flexibility in terms of how people draw money out of their pension. People find it hard to find time to read a paper now, but they will watch the evening news or get their info online. We’ve tried to provide our advice in succinct, easy-to-understand, user-friendly words but also in terms of how we deliver, via telephone, email and the internet.