Rainy day at ICL inspires huge Contractor Umbrella success

0
1356

Success Story

It started just as two contractors having a good moan about IR35 and tax in the canteen at ICL on a wet Wednesday in 2000. Now they run the 2nd biggest IT Contractor Umbrella Company.

We asked some time ago for stories about IT contractors who had got out of contracting and made it big in something else.

We did get one or two, including an owner of several pubs and someone who was selling property in Spain and we published those.

However, sadly, we couldn‘t find too many. Our other series at the time ‘˜Unemployed IT Contractor Stories‘ got a lot more people writing in.

However, we think that Rob Crossland and Mark O‘Brien qualify in the former category.

Umbrella Company

They set up contractor umbrella company, Parasol IT, in 2000. Being tech guys they said that they made quite a few business mistakes in the beginning.

They had a whole load of what Rob calls ‘˜bonkers ideas‘ in the beginning too. One of these was that they would give the service away for free and make their money from advertising. The realities at the end of the dotcom boom soon put paid to that idea!

With a contractor fee turnover of £38 million in 2003, and £60 million in 2004, and a projected turnover of £110 million in 2005, they‘re pretty now glad they decided not to give the service away for free.

Saving Fees

They only envisioned it, in the beginning, as a way of saving Accountants fees.

IR35 had started, and they, along with other contractors, were very worried about how they would lose their dividends and about not being able to claim for expenses.

They thought that their hard earned income was starting to disappear down the pan.

So, they got the idea that they would at least save on Accountancy fees by combining their companies. They asked a few other guys at the work if they were interested too and they said they were.

All except one, that was!

Odd Man Out

Everybody other contractor had their own limited companies except for one guy who said that he got paid through an Umbrella Company which provided him with a lot less hassle and a relatively high take home pay.

‘What the hell is an Umbrella Company’ they thought and asked?

And that was the start!

They managed to get some of their other fellow ICL contractors to come with them.

Early Problems

Like all contractors who have a scheme in mind, they thought that with IR35 around contractors (perhaps 10,000 they thought) would come galloping towards them in the first year.

By the end of the first year they had 150 contractors in their scheme. They were starting to think ‘This isn‘t going to work as we had planned’.

However, the business started to pick up from then and now, four years later, they have more than 4,500 contractors on their books. As around 90% of their contractor customers work in IT, they reckon they are now at least the 2nd biggest in the purely IT sector.

Early Career

So who are they and what were they doing before all of this?

Both of them were contractors.

Mark had a permie career in Systems Analysis and Project Management. He started as a trainee at Pilkington‘s in St. Helen‘s and then went contracting.

Mark worked for many of the blue chips and also dabbled as a niche recruiter for Focus 4GL developers.

He spelled contracting between a world trip (that included contracting in OZ and NZ) and coming back to the UK at the start of utility deregulation (and all the entailing projects).

Parasol IT have reaped the benefits of over 20 years IT experience and Mark has been instrumental in developing the backend automated systems that Parasol IT use.

Rob‘s career followed a similar course of permie employment with some then mighty computer manufacturers (anyone remember Olivetti?) that centred around systems development and project management.

A career in a small software house start-up then led to a period of contracting for nearly 5 years.

Enjoyed Contracting

He really enjoyed his time contracting. Like most of us, he enjoyed the freedom it gives you. He also met a lot of great people while contracting.

Of course, with contracting there is an upside and a downside.

He had to work away from home often, sometimes in places like Jacksonville in Florida, but also in Bradford and Glasgow as well. He also worked in London and Birmingham. Mark got sent to exotic locations such as Stoke on Trent, Manchester, and Cardiff.

However, he said, like most contractors, he, like Mark, were always looking for the main chance, that other idea that would take off and meet the desire to put THAT great idea into practice.

Most of us have that, but most of us don‘t get there.

Going from contractors (as opposed to say Accountancy) to Umbrella Company owners, had good sides and bad sides.

All of their early mistakes were business mistakes. Accountants probably wouldn‘t have made them but there again would they have grown as much?

Advantages of being a Contractor

However, there were also great advantages of coming from an IT contracting background as well. They were:-

1) They understood exactly how contractors thought. They knew what they wanted from an Umbrella Company and what their mates at ICL wanted, and so they were able to create something specifically for IT contractors that was just up their street

2) They understood what IT contractors would want to be able to claim in expenses and deductions

3) Most of all, they were able to build their own IT system that would suit contractors to a tee. They built their first system themselves and were online from day one with a system that allowed contractors to put in their timesheet details and more.

Motto

Their motto from the beginning was ‘Get contractors paid in time. No excuses. Just get them paid’.

They said that their Umbrella would be all about good service to contractors so that contractors were content (i.e. paid) and they didn‘t have to badger their agents.

It‘s always good to hear about contractors who have made it big. We all want that chance.

If you know anyone else who has a good story, or has made it big, then please get it touch.

ad