Signed contracts are not guaranteed future revenue generation! An accountant would not for example allow you to recognise it as revenue in your accounts. Clie

Signed contracts are not guaranteed future revenue generation! An accountant would not for example allow you to recognise it as revenue in your accounts. Clients can go bankrupt, they can be slow to pay, they can not pay, etc etc. Calculating how much capital you need to have in reserve before you go contract can be done using a couple of basic probability/finance measures. Look at reasonable worst cases (client bankruptcy, tax investigation, unexpected dismissal) and make sure that you have the current assets to survive them! But you're doing this as an employee right? (Right!?) I hope everyone on this forum is going to be ok if they are made redundant tomorrow. The whole point of this is that you need to be able to survive a setback. You should not be living at a 10% chance of missing rent each month! You can count on that probability eventually happening over a long enough period.