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Why it rocks and sucks to be a SAP Freelancer or Contractor

I often get to talk about being a freelancer or contractor and what it means to me. I wanted to create some videos on the topic to give some of my ideas to why it is great to work as a freelancer.

I have learned it is always a good thing to start with the positive. So that is why the first video is why it rocks to be a SAP Freelancer.

I have also written a blog in more details about each of the items, which I highlight in the video. You can read why it rocks to be a SAP freelancer here.

There are also a few bad things that irritate me. This is something you have to learn how to deal with, if you want to become a SAP freelancer.

I have also written a post about this in more details. Why it sucks to be a SAP freelancer.

Please share what you think is the best or worst about being a freelancer or contractor.

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  • Thanks for the blog.  Nice to see another freelancer here! 

    I’d encourage you to post the more detailed ones here.  I think the written ones would encourage more discussion.

    Like any job being a freelancer has it’s pro and cons.  I recently posted this blog about some of the issues:

    Hopefully you’ll check it out.

    The interesting thing is that of the top 5 pro’s and con’s you have, they are almost interchangable.  What is a pro for one person, can be a con for another person. Even your gadgets cagtegory.

    Yes.. a pro is that you don’t have to ask anyone to buy the newest, coolest thing.  But i kind of view it as a con. The con is that most clients now have strict site rules about freelancers using their own laptops, or having cell phones on site and they usually provide controlled laptops to freelancers.  Which means that while you might have new gadgets, many won’t be integrated with your current clients work enviornment.  You might be lugging two laptops around, yours and theirs. You’ll maintain a work calendar at your clients and a personal calendar on your own device(s).   Having these all actually talk together is just the luck of the draw of who your current client is.

    Personally, I’m not sure I’d list things as Pros and Cons as much as I would list them as the key attributes or key challenges of the job.  Since I think it depends on the person as to whether the item is a pro or a con for them.


    • Maybe you addressed this and I missed it, but my biggest reason for not going independent is health insurance. My younger son has Type 1 Diabetes and we have other chronic health issues in the family as well. Working for a consulting company keeps my premiums manageable. If I had to buy my family’s health insurance without a larger pool to absorb the risk, my premiums could easily triple and that’s *IF* I could get insured at all.

      I recently ran across an interesting company, though, that might help with this particular issue. I’ll have to dig up the name if anyone is interested, but basically this company charges a percentage of your revenue up to a cap and in exchange handles all of the billing and gives you access to a group insurance plan. They also provide a billing vehicle if you do work for the federal government (which I currently do). If I wasn’t fat and happy with my current employer, I would definitely have to take a closer look at this option.  Does anyone else have experience with this kind of structure?

      Best regards,


      • Hi Tom

        One option to look into as I believe you are based in the US is an HSA with a High Deductible Plan which can help reduce the insurance premiums although my guess with what you explained they might still be high. Shoot me an email or we can set up a short call if you would like some more information.

        It is important to note that most SAP consulting companies includes your salary, bonus, health insurance, taxes and then on average puts a ~35-50% mark up on top of that so if you are comfortable with the cons that Daniel outlined there I wouldn’t let the health insurance hold you back as your revenue working on your own will definitely be able to off-set it.

        • Help me with the math here. For the sake of argument, let’s say you wanted to make 100k  take home pay after taxes and expenses as an independent. Between my company and I, health care expenses run 17,500 and as an independent (unless I can get a better deal through TripleA or a credit union which I’ll check on) my initial investigations (a few years ago) indicated I would pay 2 to 3 times that to get equivalent coverage. (We’re currently in the HSA plan that lets you roll over from year to year. Previous company had a use it or lose it HSA plan. Never again.) 

          So, roughly:

          100k – take home

             35k – Health care  (as an independent, does Health care decrease your gross taxable income?)

          I guestimate you’d need to bill 165k to cover the above plus taxes then add 16.5k for retirement contribution so roughly 180k billing (rounding down to keep math easy).

          180k billing over 48 weeks (to account for 10 days holidays and 10 days vacation per year) = roughly 93.75/hour assuming 40 hour weeks and no overtime.

          While I’m certain I could get gigs paying more than that, what am I forgetting? Are most independents having to eat their own transportation and housing costs these days or are most gigs still hourly rate with expenses billed/paid separately? I’ve seen gigs advertised for an “all-in” hourly rate, but I’m not sure how prevalent that is. Also, are there other significant expenses I’m forgetting, eg liability insurance?

          We can move this to a different thread if necessary so as not to completely hijack this one, but I’ve been having this argument with my wife for years. I could use more/better ammo!

          Thanks a bunch!


          • Ditto to what Jarret said.  I’d be happy to talk to you about being an independent.  Just drop me a message.  But the bottom line is both you and your wife have to be comfortable doing this.  You don’t want to twist the arm too much.  Otherwise you could have problems down the line.

      • Tom,

        Health insurance is a problem.  No doubt.  But I’ve been very fortunate with my family health wise.  I make sure I have very good auto and homeowner’s insurance for one, as these can help in the case of injuries.  As Jarret menitoned, I also use a high deductible plan to keep the premimums down.  What is key is too make sure you put away a portion of money into savings just for this.  Maybe a separate savings account somewhere. An HSA can help if you know you have certain minimum expenses every year.  I beleive there are rules around HSA’s where by you want to make sure it is used up every year.  I have had many years with no health expenses aside from dentist checkups, wife’s ob/gyn and a strep throat visit here and there so we haven’t used an HSA. In fact I’ve probably spent more in health care for the darn dogs then I have for the family in several years.

        It’s much harder I’m sure when you have chronic health problems in the family.  I don’t have any experience with them but some groups do offer group plans such as Triple AAA.  Some of the larger credit unions I beleive also offer plans.

        You just may have to plan to save a lot more towards your health care.  But as Jarret said, when you are working, you should be doing well enough that health care costs shouldn’t limit you from this line of work.  The key is saving for the down times when you are between projects.  If you are lucky enough to never be on the bench, the extra health savings just become extra retirement savings eventually.


  • Great job with the pro’s and cons and as someone who worked for SI’s for the first 6 years and have been self employed for the past 8 years I can say first hand you hit all the major points. I often have friends reach out for advice on making the jump from SAP (Internal) or Major SI’s to the Independent market and going forward I am going to send them this article to review before hand.

    The only thing I will add is that people can have a false sense of security working for a major consulting firm as if you are not billable you are at risk which you see everytime there is a downturn in the economy so in fact they should share the same worry as one of your independent cons.

  • Great Blog!  I really appreciate it and I’m actually tempted to do my own.

      As a former SAP America employee (consultant), I’d agree with all of your points.  I have far more control and flexibility regarding my carear now that I’m working at Serio Consulting (I co-founded with some other ex-SAP colleagues).  And your last point about gadgets… spot on!  First thing I said when I left was “I can’t wait to order a brand new ThinkPad and dump this HP steam engine”.  It’s not the reason to leave but it’s a great perk.

  • Hi all, great topic, great feedback, and after having been a self-employed independent contractor in SAP HCM consulting for 15 years, I have a few lessons learned, so I have a few more ‘Rocks / Sucks’ to add:

    Play The Niche.


    1.  You will have the ability to focus on new and emerging areas in the software / market at your own will. This means that you can chose a specific area to become a specialist in and incorporate into your suite of services. This does not need to be SAP oriented, but may be complementary such as Six Sigma or agile. Working as an employee may mean your focus and your training is decided for you.


    1. You will need to pay for that training yourself.



    1. A great accountant, and keep handy a good lawyer can help significantly reduce your administrative burden. A good investment/retirement adviser that works well with your accountant (but should not work for/with him) can help you to maximise your short and long term gains from your income. Also, you may need a good immigration attorney for foreign postings, and your accountant may therefore need some international tax knowledge. Do NOT try to be creative with your taxes…. it is VERY visible. Your retirement adviser will help you to plan and achieve the best possible options as self-employed worker.


    1. Sometimes you need to keep that lawyers phone number handy. Whenever possible, read a subcontracting agreement in detail, and if there are any clauses such as you must pay for a replacement, that the employment is not ‘At will’ or that your payment may be withheld…. get your lawyer to draft an alternate version, or walk away. Most especially, if that contractor will hold your work visa, make sure that they do not get too far behind in your payments. It is not uncommon for foreign workers to have had payments withheld / denied because the contractor holds their visa and can threaten cancellation of the visa rather than pay what they owe to you. (Note, this can be considered theft of service, and  a whole bunch of other things). The ‘At Will’ employment means that you can resign with appropriate notice and are still entitled to your payment for all hours worked and cannot be forced to work if you want to leave. Always resign in writing and ensure a time-stamped copy is provided to your employer. if this person holds your work permit, this may need to be done very diplomatically, and with planning in advance. Keep your paperwork in order, on good terms with whomever you contract through, and plan any changes in advance. Get all contract changes in writing, and make sure you understand what they mean. Don’t let yourself get bullied. If you can, find other subcontractors who have worked with that firm to gauge their experience. Let’s just call these ones…. lessons learned ! $$ !  🙂



    1.  Because social networking tools are now available to help you get your name, your experience and your opinions out there – leverage them to the max! Network baby ! Network !  Consider local tech chapters of national groups, user groups, local tech conferences etc. These are also much cheaper than the big once a year conferences and may find local work for you!   Use these conferences or other events to meet recruiters, contracting firms and other people who may want to contract you. Also… blog, write and present. Submit papers as a speaker and that can also create a positive spiral for more references and a stronger market reputation.See how you can also teach courses in your specialty, either to a customer, or for SAP! (remember that niche/emerging area thing I mentioned above… learn it first and you can talk, blog, teach, consult in it first). You can overcome the ‘sucks’ factor of finding work by making marketing yourself a daily activity. It will become second nature, easy and fun.


    1. Your reputation is your business card. Nurture it, protect it, and no crazy drinking photos on Facebook! You don’t have a big company to protect you from liability or issues so make sure all your interactions in the public sphere are professional and career enhancing. You are now selling the brand of You!



    … I don’t think I have anything that rocks about self-employed healthcare in the US. In socialised medicine countries this is so much easier and better. In the US, this falls in the ‘Sucks’ bucket.

    Sucks: not all health plans are created equal, and they can be a struggle to navigate through even without any special coverage needs. Be very aware of planning for life changes when reviewing options (marriages, births, college age kids, divorces) if you can as some self-employed/single payer plans actually exclude pregnancy/birth coverage or family care options. Make sure you stay up to date with all payments, and leverage your accountant / financial adviser for how to establish an ’emergency bucket’ bucket of funds for medical emergency. Also consider STD and LTD, catastrophic coverage and life insurance. These are typically provided by an employer, but now you are self employed and need to plan for a medical issue where you cannot work. Be aware of any local state health insurance exchanges where you are, or where you are planning to work/live. Plan ahead and reach out to expat communities if you are going to a new country for doctors, etc as well as any advice on local health insurance. Planning and research can help avoid some of the biggest pitfalls (or coverage gaps) that you may be exposed to.

    Intellectual Property.


    You own it, you created it. And using social media and networking, you can leverage it. Get a brand, slogan, logo that represent who you are and what you can offer. Copyright it. Then market baby ! Market !


    Make sure you do it on your own time and don’t get it confused with what you may be contacted to provide to a customer.

    Travel / Location of Work.


    See the world, take the contract in some very cool far-flung place, stay weekends and really enjoy new locations, cities, countries. This will add to your experience as well as empathy for customers and the typical 100 ways to do anything in SAP. Market this experience and knowledge as a part of a globally branded You !


    Travel is tough when you have a personal life, or if you live in a location with a limited market. Try and find contracts that are open to remote work if you need that, but again make sure you establish your credibility and reputation, and that customer may be happy to leverage you remote on call on a time and materials basis. (Note: get a few of these and you can work 100% remote).

    Overall…… after being a self-employed contractor who contracted globally in SAP for about 15 years I can definitely say that it did supremely ROCK!  I have interspersed employment in there as well to add up to a total of 22 years in SAP…. and self employed and full-time employment both have great advantages. The next 2 years will see rapid and enormous change in the SAP market. If you are willing to work hard…. aye, there be great treasure ahead !!  Happy Sailing ! 

  • Do you think competency/Skill is another area we should consider before thinking of being a freelancer?  For example often you have back up in your company from the people who are expert in that area and answers come really quick.However you can’t ask some one when you are on your own .In short should we have certain amount of experience/expertise before we take a decision ? As the first project as a contractor or freelancer might be a deep river to cross , specially without life jacket( Team Lead / Expeienced consultants from our company)..

    Anjan .