You're a consultant and you need to be paid like one.

One of the advantages of being an independent IT consultant is that you can deduct expenses. This doesn't make purchases free, it just means you don't have to pay income tax on the amount of income equivalent to the expenses. In effect, this means that everything that you buy that is a valid expense is essentially purchased at a 30% (approx.) discount.

At some point you're going to be tempted to work for free. That is, a potential client will subtly or not so subtly request a freebie. This could be in the form of recommendations or even a plan of how you would proceed with a certain project. And why shouldn't client's try to get something free? We all do it, after all.

There is an alternative to incorporating if you want to work without a recruiter.

Claim the recruiter's usual fee for yourself.

I'm a fan of Nick Corcodilos' Ask the Headhunter newsletter and have been for a few years now. I even picked up his book a while ago to get a deeper understanding of his recommended approach to job hunting. And so I was pleased once again to see Nick take on the video resume movement and completely deflate the balloon of hype.

It is very, very rare for a piece of software to go on to be a huge revenue generator for a company. As such, it's a bad idea to get in to an arrangement where your services will be paid via future profits from the project. The numbers may sound very attractive, but neither you or the client are likely to be in a good position to truly assess the risk of failure.