Ed, see my response to thread 57909. I also suggest the discussion forum on www.contractoruk.com which gives valuable insight into the negative aspects of contracting (being out of work, being messed around by agencies, false job ads, not getting paid by bad clients, finding your rate undercut by offshore code-jockeys, etc).
Contracting is a business just like any other.
You need to look after your clients (most businesses generate 80% of annual revenue from existing clients)
You need to have multiple sales channels (contract direct to old clients, through agencies for new ones, and direct through mates where you can)
You need to respect agencies who get you work and happily let them take their margin. Accept that there are also time-wasters whom you should simply shrug off and ignore
You need to remember that contractor day rates are calculated to allow for bench time – too many contractors get used to the good times and forget to keep something by for a rainy day. The worst are those who start to believe that their day rate is high because they are geniuses and will be in work for ever, twelve months a year. They’re they ones that end up mortgaged to the eyeballs based on assumptions of 100% utilisation.
You need to be good at what you do (although god knows there are some garbage contractors making a living because of client apathy)
You need to do something that agencies routinely place at their clients, or else you’re going to have to sell direct (not easy).
In the short term most people who try contracting like it because of the money and the freedom to take time off between contracts, but you need to be a certain type of person to enjoy something that has no career path.
Finding the first contract can be hard when you are in a perm role. Most contracts are for "immediate" start and so if you are on a months notice, few agencies will wait around for you. They will simply put forward existing contractors, unless you have hard to find skills.
What sort of work do you do at the moment?