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So You Want To Be A Consultant
Stephen Friedl writes "I've been a self-employed consultant for almost 20 years - I still have my first customer! - and I'm asked often about the business by those who are considering it. It's not for everybody, and there are often surprises, so I've written up a Tech Tip that recounts my experiences and provides advice for the n00b. Executive summary: It's much more about customer service than it is about technical skill."
I'm a student who started doing software design as a consultant. Now I started this while I was still in high school and have made $70k in 4 years. Note that this is without much experience or a degree, and while still being in school... so if you devoted your time to this, perhaps it would be very lucrative?
It's much more about customer service than it is about technical skill.
...Not to be rude, but I've noticed this is the "rule" with the consultants that have worked on various portions of projects that I've been involved with (e.g. the guys customizing an ERP that our system will be integrating with).
The funny thing is that the consultants with the poorest technical skills make the most money (charge the most hours) - at least in the short term.
This article definately sounds as if the writer was more aligned along the marketing/policy end of consulting rather than technology, the article comes across as pretty weak. Although I don't know any IT consultants, geological consultants are usually a bit more terse and limit their comments to things other than "warm fuzzy feelings."
I also have never liked the term consultant. Sometimes consultants are nothing more than paid mouths to spread an idea, and they don't actually "consult," or say their own opinions.
"I contracted a client today!" Jeez, can't we discuss this without mentioning viruses? Seriously though, I find your choice of words poor and I disagree with your classification, I've been a consultant for 9+ years now and I would say what you call "contracting" is typical freelance consulting and your definition of consulting is basically handholding. Top professional companies do not need handholding, so when you're dealing with them it's much more about technical knowledge than customer service. But since most of your customers need handholding I see why you would think that's the norm. It's not, at least not in my experience, YMMV.
I've always found it much easier to take on sub contract work, this way you never have to worry about facing the non-techy clients and what needs doing is very clear. Granted you don't make as much but if you have a full time job already it is an easyish extra income.
moo
A lot more of your expenses can be quantified and written off as business expenses when you work for multiple people. Of course, there's a little more risk here for error, but the IRS doesn't seem to put you in jail if you make honest mistakes.
Oh, there's certainly a lot more freedom involved too. You make your own schedule, and you're in a much better position to tell someone to fuck off without impacting your lifestyle too badly. On the other hand, when you're not charting up billable hours, you're spending your time marketing. Always marketing.
I've been doing this for about 3 years now and I don't think I've billed more than 20 hours a week on average, but being able to select which 20 is really convenient for your sanity. There are some weeks where you won't work at all and others where you don't lift your head higher than your shoulders. If you can't stand regular routine, independent consulting is the lifestyle for you.
There's a certain anxiety that comes with alway having to market yourself to new clients and not being sure if you can make ends meet in six months, but this isn't so bad in the computer industry since if you run into trouble, you can usually fall back on a fulltime job before you starve to death. You definitely need to save up a cash cushion to help even out the unsteadiness of work, but simply knowing that you have it there puts you in a better position to weigh whether you wan't to prostitute yourself out for that ActiveX project.
Unless you have iron will self-control, working out of your house is usually a bad idea because you end up finding as many distractions as possible to keep you from working. You also never feel that you're "off", since your day always looks like a 16-hour work/play haze.
All in all, I certainly don't regret getting into this.
Customers will abuse your good nature to no end if you do freebies.
Example: I do work for this small construction firm. Their payroll is $30,000 a month, they don't want to do any kind of maintenance contract (200 - 500$ a month, nothing). Yet they call me for *every* little thing that goes wrong, mouse runs out of batteries, virus defs out of date, some problem with quickbooks, whatever. I've been meaning to get tough with them....
The corollary to that is actually, if you have the ability, *choose you clients well.* I am stuck with a lot of clients from when I first started out and didn't know any better.
Ive seen a friend of mine whose much more savy "fire" clients for refusing to upgrade off old, vulnerable software. It was great.
Religion is a gateway psychosis. -- Dave Foley
You can always factor your invoices. I met a dentist in Holland who does this as a matter of course. He has a good idea of his (necessarily reduced) income but does not get worringly into debt. And his factoring costs are probably higher as they are dealing with individuals.
Did he inhale?
I think he nails a lot of what people don't know, but should, if they want to make a living doing technical consulting. However, I think he's off-base on his suggestion to allow the customer to "own everything". The arrangement suggested is not legal and could result in an awful lot of trouble for either you or the customer down the road.
There are certain pieces of intellectual property that the customer owns simply because it originates with them--business processes, customer information, etc. Those things remain their property whether you are working with them in your project or not, and you can't re-use or re-publish them without express consent. However, in most cases, anything that you create remains yours under the same laws. It is possible for you to relenquish your right to the client, in effect giving the IP away, but if you do so, you do NOT have the right to re-use it again yourself in future projects. They own it, even the building blocks--you are infringing on their copyright at that point.
There are few situations in which this might actually come back to bite you (or them) but they are devastating if they do arise. For one, if you ever decide to sell another work based on that code to another client, under those same terms, you've created a potential liability for both of your clients, depending on how much you got in writing at any particular stage. Either the second is infringing because the first owns it, or the first is infringing after you sold the rights to the second.
It's possible, of course, to license your code any way you would like, but you have to retain ownership of the copyright in order to do so. You have to make it absolutely clear to the clients that you own what you code, but that what they are paying for is a perpetual license to use that code as they see fit. This has the same effect as what the author is going for, I believe, but without the potentially nasty side effects.
No relation to Happy Monkey
The other challenge is that some people seem to think that "consultant" means you're unemployed. Some say, "Oh, so you're between jobs?" I then explain that I have a roster of clients and that I've been doing this for seven years. I have also learned to stop saying that I'm a consultant and to start saying that I have run a small marketing firm for seven years.
Occasionally, I also run into potential clients who think "consultant" just means that they can avoid payroll taxes. They don't understand that I have other clients and that, while a full-time ongoing engagement is something I'd consider, I'm not using consulting as a way to scam the government. I've run into some companies that have had "consultants" working for them full-time for the past five years. (Canada's tax laws do not allow this.) Fortunately, I don't run into people like this very often.
-- SYS 64738 --
Finance charges can help, but I've found (after a decade and a half as a consultant) that offering early-pay discounts help a *LOT*. Give them thirty days to pay, but if they pay early knock a couple percent off the bill. That eliminates their desire to play the float with your money by holding on to it as long as possible, because by delaying payment they are now losing money! Besides, you get more flies with honey than ... well.
... let them have it if they will agree to pay you promptly. It never hurts to ask.
Another tip: if you do anything for free, even something as simple as plugging in somebody's mouse or changing their desktop wallpaper, put it on the bill with a 100% discount so they can see all the benefits of keeping you happy. The more people at a given site that see an advantage in having you around, the more pressure there is to make sure you get taken care of promptly. All consultants (except, perhaps, lawyers) do things gratis now and then in an effort to accrue good will. But believe me, if you don't document the freebies you won't get credit for them.
Find out right away who approves your checks (if you are contracting for a large organization this may not be the person you think it is) and don't hesitate to give them a call if there a holdup in getting paid. And when you do speak to that person, be unfailingly polite and explain the importance of your work to their company. Often it just takes one phone call from that individual to whoever cuts your checks to get the job done.
Another point I'd like to bring up is that many large companies are depending more and more on outside help (seeing as how they've often fired most of their existing full-time staff in an effort to become "right sized".) Consequently, I've found that some corporations have special fast-pay plans for small contractors. They generally won't tell you about it (the person who hired you probably won't have a clue) but if you talk to the accounts payable department and explain that you're a consultant who really likes working with their organization, but can't afford the usual delays in cash-flow, they may be willing to make an accommodation. If necessary, offer an early-pay discount to sweeten the pot. Sometimes they will ask you for one
The higher the technology, the sharper that two-edged sword.
try to find some consultant friends! especially in the "time and project management" departement it helps tremendously to have a colleague who can jump in when you are short in time or are on holiday - and who doesn't try to "steal" your customer..
everything else is almost identically to my businnes practice and i can say: "it works!"
regards,
PAT
SEO Test: TIGI und SEBASTIAN - Online Shop - V
"Wow, does that ever sound like a good consultant. Thats probably why they are hated in the IT field."
I hire consultants all the time for my job. As I only have one of me and its against my employer's policy to hire a fulltime individual for a 4 month job that may have 3 months of downtime until I need another set of hands (and our project list is full enough with very diverse projects, its most likely anyone that qualified for the last job probably won't cut it for the next one) -- I can safely say customer service *IS* what I'm looking for.
I've had more than my share of technically skilled workers. They aren't hard to come by. I trip over a few dozen each and every day.
The last consultant I employed had no people skills. He never showed up to mandatory meetings and would take the barest boned project outline that was kept thin purposely so that we could adapt when the higher ups wanted something completely different (or we found out that the feature didn't really fit our expectations once it was being mocked up) -- this guy would deliver something that fit the description, but never anything we were asking for.
The next 3 weeks tasks were always updated at our weekly meeting in detail with everyone taking notes, but this guy couldn't find the time to show up or even take calls to be informed. Sadly, the boss didn't want to make any changes to the lineup until after the specific phase was over (and immediately after it was -- 4 months overdue), I called the consulting company and asked for someone else.
All in all, the guy was one of the most technically competent persons I had met. He did a lot to clean up the code and it was *MUCH* cleaner than what I had started with. He optimized quite a few SQL queries that we never asked him to and dropped the server requirements quite a bit.
But all in all, the guy had no customer service ability. I would have paid to have someone with far more service than tech and thats what we shot for this round.
So are consultants that are about the service hated in the IT field? Probably. Geeks hate when someone can communicate with others and naturally do what they can't do. The rest of the industry loves these sorts of guys -- then again, we aren't worried our jobs are going to be taken by them (heh! I'm more worried about accidently sabatoging my own job than someone else taking over).
It really sounds like you probably have no customer skills and are a bit afraid. Its the geeks vs. the jocks all over once again for you isn't it?
Was my biggest problem.
:-)
They simply refuse to do so, some of them taking as long as 60 days to pay on a invoice.
Doesn't matter the time on the invoice due date.
Handling this sort of thing is still dicey and although I am sensitive to customers needs, I still have to pay the bills on time as well.
Some tips not mentioned in the article:
1) Although shortening your invoice schedule may have worked for this gent, I can say that is rarely has any impact on my customers.
2) If you are going to start a consulting business, insure you have about 90 days of operating income (complete business quarter) to start with.
3) Projects should be divided up into your invoice scheduling if that is what your invoice shcedule is.
If you really have certain customers that are really bad, work with them for a long time on timely bill payment (say 6 months). That means continually sending them letters, discuss it with a variety of people in the organization, not just your contact there.
If they continue to be greviously late, then drop them or stop work citing a long history late payment history.
I did this with one customer and all sorts of people started asking where Hackus was??? When they found out they were late on a payment AGAIN by 90 days, they paid and offerred me a job.
Your milage may vary.
-Hack
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
- The first one because I hadn't yet decided on a career focus and I wanted to leverage my native English language skills to quickly get a foot inside a foreign country's IT sector, as a freshly landed immigrant;
- The second came as one of those offers one cannot refuse, based on my excellent performance at the first job.
Once I got pigeonholed into Technical Writing, applying for any other job became a dauntingly difficult task. I just kept on getting comments like:- This opening is for a Project Manager. That doesn't match your profile: you're a Technical Writer.
- Hi! This is Ms.Clueless BitchAufHR from soonbankrupt.com, how ya doing? Thanks for your application for this Product Manager position. We were all sitting here reading your CV and we have a nice Technical Writer job for you.
- Oh, so you're fluent in 7 languages. That's good, cause we're badly in need of a Technical Writer who can do both English and German.
At some point, it almost felt like my college degree was being systematically ignored, which made me ponder whether I would be better off switching field rather than fighting the HR drones.I stopped sending out CVs and instead focused on contacting old friends, which paid off in spades: within a few weeks, I landed myself a CTO position at a really forward-looking startup where a mere acquaintance was working, based solely on his pitching my CV to his boss.
Since then, I haven't bothered with the CV mailing game; I utilize the power of social networking. It works.
Software is not supposed to be about how to work around a useability issue. - Ken Barber
The below comments serve only as guidelines and are not intented to be truths. Becoming a consultant is more than just deciding to become one. Here's where to start. You'll need no less than $10,000 to start depending on how good you are at bargaining. 1. Get an attorney. a. create an 'S corp' and 'LLC'. b. drawing up a consultant agreement form 2. Unless you own nothing of value or expect to own nothing of value in the next five years do the following; a. Obtain liability insurance of no less than $500,000 but preferably $1,000,000 and, if it has anything to do with accounting software/hardware $5,000,000. 3. Write down all the products or services you're going to offer. For lists less than 10 highlight the top three. 10+ the top five. a. For each of the highlighted - list five things benefits you'll offer. b. for each benefit list five things why it will benefit your customer. c. If you can't list five things then drop it. 4. Buy at least one terabyte of portable storage for backup purposes. 5. Bill by the hour (minimum 2 hours + expenses if incurred beyond normal) and bill monthly. Offer 10%, net 30. Either portal to portal (better if traveling 500+ miles) or on site. 6. Notify them when you arrive and have them sign. Notify them when you leave and have them sign. 7. Never give anything for free unless they're a new customer (and only for the first month) or if they incur monthly bills of over $1000 regularly and only then give one hour free). 8. Determine within the first three billing cycles if they are are bad customers (don't pay reasonably). Fire them...there are plenty more customers. 10. Get a very good business tax accountant (they are worth their weight in gold). 11. (unspoken) if you really believe in yourself - never give up.