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Maybe you're keenly interested in going solo but know it would be foolish to quit your day job right now. Or maybe you need some extra cash but can't ask for a big raise while your company grapples with layoffs. Moonlighting as a contractor could move you closer to your goals. But mind the howling wolves.
"What wild canines might make a meal of my plans to expand my professional reach?" you ask. There's the boss at your day job, who may want to lay claim to your every waking hour. Then there are your consulting clients, who may demand your time while you're trying to keep that boss happy. And there's the tax man, who wants to go 50-50 on your self-employment income. But fear not! Here are tips for keeping those toothy predators at bay.
Employer Expectations
Paradoxically, the first rule of moonlighting is to make your consulting clients play second fiddle to the boss at your day job. In the ideal situation, you'll bring up your intention to contract on the side during your negotiations for a new job. Before you lose your leverage as a desirable candidate, let the potential employer know what kind of consulting work you intend to do, for whom and when. This discussion will enable you to set reasonable expectations about your day-job work hours, for example. Just as important, you'll have the opportunity to reassure your future employer your day job will always come first, you will turn down consulting jobs that might pose a conflict of interest and so on.
Of course, when you bring up moonlighting, you might alienate your future boss and sabotage your prospects for the new job. But if you're serious about taking a crack at going solo, that's the risk you may have to bear. Indeed, for some moonlighters, the compatibility of a job with outside consulting work is critical to the choice of a day job.
Watch the Time
"I don't know if I would take a job that would cause me to work 12-to-14-hour days all the time," says Greg Gantzer, a Web development guru who works full-time at an Internet bank in the Midwest, and builds and runs Web sites on the side. Paul Bliss, a Web developer in Springdale, Pennsylvania, keeps both his employer and family happy by running his consulting business during the loony hours. "I usually do moonlighting from 10 at night until one, two or three in the morning," Bliss says.
You must also manage your consulting clients' expectations. Clients need to know when you will be available and when you won't be, how you will respond if the client has an emergency and so on. Gantzer says his consulting business runs smoothly, because "clients know my situation and respect it." He has cautionary words for anyone thinking about juggling a job and consulting work from the same desk during the same hours: "You never let the two mix; that destroys your credibility."
A Taxing Situation
Suppose you find a way to gross $1,000 per month with moonlighting work. Don't harbor illusions about how much Uncle Sam will let you keep. For many professional folks in a middle tax bracket, federal and state income taxes and the 15.3 percent self-employment tax could easily cut your income to $500. So set your fees and income expectations accordingly, and be aggressive about exploring every tax deduction you deserve. If you're running a business for profit rather than practicing a hobby, you can deduct many expenses whether you're incorporated or not, even if you also have a full-time job. See a professional for tax advice.
