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."

Comments

are you going to pay me?

[Anonymous Coward]

Even if you regularly invoice at the start of every month, customers have their own schedule for paying, and this can be nerve-wracking to deal with

I think that's the reason why I wouldn't do consulting/contracting. A friend of mine recently decided to be self employed as a consultant and the biggest problem is getting people to pay him in an orderly fashion. When you are your own business you end up putting up money for various things, and when your incomming payments start to lag, you can end up in serious trouble.

Re:are you going to pay me?

[sosegumu]

When you are your own business you end up putting up money for various things, and when your incomming payments start to lag, you can end up in serious trouble.

Which is why being under-capitalized is the number one reason new businesses fail.

Re:are you going to pay me?

[ScrewMaster]

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.

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 ... let them have it if they will agree to pay you promptly. It never hurts to ask.

me too !

[selderrr]

I am also a self-employed developer/consultant (although I'm technically a programmer, I find myself spending a lot more time on consultancy)

Keeping your first customer is NOT perse a good thing. Only if you still make money on work for that customer. The first 10 years of my own business, I found my self spending a lot of time giving phone-support for previously programmer stuff. Or for other stuff... or for no stuff at all (help, my mouse doesn't work properly anymore !)... The most difficult thing in being self employed is : learn to charge for everything. If you work on something, even if it is only 5 minutes : bill'em.

It's the only advice I can give. If you start a relationship with your customer based on free support (in the widest possible interpretation of support), yuo're fucked

Re:me too !

[Monkelectric]

I am self employed to. This is the best advice there is.

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.

Pros and cons

[defile]

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.

I've been a self-employed consultant

[Fuzzums]

"I've been a self-employed consultant for almost 20 years - I still have my first customer!"

Parents... :D

Re:Technical skill?

[Steve Friedl]

My point on the Warm Fuzzy Feeling is that if your customer doesn't have it about you (they don't like you, find you hard to work with, etc.), it doesn't matter much about how good your technical skills are. New consultants usually focus on the technical skills and forget the people skills, and this doesn't make for good, long-term customer relationships.

I'm much more on the technical side of consulting, and the only "marketing" I do is publishing original, technical content. Mainly I write C code all day, though I'm sure that this slashdot post is seen as "marketing"...

Steve

Re:One consultant to another

[ScuzzMonkey]

Actually, I think he's got it more close to correct than you do. I've been doing this for about ten years now, and although there is a lot of splashover in how the terms are used, the understanding of them among people I typically interact with is that contractors are single-job at a time, specifically skilled, with a specifically contracted engagement. Consultants, on the other hand, are those who typically manage a number of simultaneous engagements, often without specifically executed contracts, typically with a less well-defined issue at stake. I think what happened to muddy the terms is that a lot of companies found it was easier to hire contract labor if they called it 'consulting' and a lot of people found it more palatable to work without insurance and benefits as long as they got to think of themselves as 'consultants.'

I think you'd be surprised at the number of 'top professional companies' who use consultants; it's often less about hand-holding than bringing in fresh perspective or someone with experience at other companies for a common industry issue. I would agree it's less about customer service in those instances (although, in my own view of the 'types' of consultant out there, the two categories are 'technical', where you make your reputation by being correct, and 'sales', where you make it by handing out warm fuzzies... but I digress) because you are dealing with people at that point who have enough knowledge to know what it is they don't know, but it's definitely not the same as being brought in to fill in as a sysadmin for three months.

Simple Rule of Thumb.

[sanityspeech]

Persons allergic to incompetence cannot be consultants. - Ioan Tenner

Been there, done that

[Linker3000]

Stephen Friedl fell at the first fence by writing up his experience and making it free to all. I am a **TRUE** consultant see:

If you want *my* insight into the industry and how to work it, I can arrange a coaching session or formal meeting together with comprehensive notes and a presentation - here are my rates...