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Businesses The Almighty Buck IT

So You Want To Be A Consultant 260

Posted by michael from the billable-hours dept.
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."
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So You Want To Be A Consultant More

So You Want To Be A Consultant

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  • Not much money, but rewarding (Score:3, Interesting)

    by Anonymous Coward on Sunday January 30, 2005 @02:09PM (#11521105)
    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?

  • are you going to pay me? (Score:5, Informative)

    by Anonymous Coward on Sunday January 30, 2005 @02:10PM (#11521116)
    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? (Score:5, Insightful)

      by sosegumu ( 696957 ) on Sunday January 30, 2005 @02:34PM (#11521285)
      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.
      • Can't mod you up as "even more insightful and informative too", 'cause I got no points; but, this is one of the things that, sadly, SO FEW people understand.
      • As a banker at a large financial institution, I see that all too often. Something that can be solved by a simple line of credit, or even a business credit card, often brings down an otherwise succesful company.

        For any small business, my main bit of advice is figure out how to manage cashflow.
    • 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.
    • 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

      hey, the same thing happens to your boss if you work for a start up or small company! so it really boils down to the two choices:

      1. do you want to spend your time programming and let someone else deal with all the business angles or...
      2. do you have the attitude of "if you want it done right, do it yourself" and are willing to invest all that extra t
    • 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.

      Finance charges are the answer. Set them akin to a not-so-great credit card, and put in the contract for services that they agree to pay them AND that they agree to pay the fee for any collection agency out of their own pockets after 90 days.

      Another way to go, which a guy I know uses, is to get a merchant account and accept credit cards. His ratio

      • Re:are you going to pay me? (Score:5, Interesting)

        by ScrewMaster ( 602015 ) on Sunday January 30, 2005 @03:18PM (#11521592)
        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.
        • Good stuff, all of it.
          • Thank you. I've been ground up by that particular mill a few times along the way. Not often ... most organizations are honest about paying their bills. They have to be, or eventually nobody would sell them anything. But the thing to remember is that big corporations are generally set up to pay other big corporations, where Net 30 or Net 45 (or even longer) terms are common. That can be a bit rough on the little guy, though, which is why it's best to work out payment terms before letting them get into you f

        • First off: I like both of these pieces of advice:

          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.

          If necessary, offer an early-pay discount to sweeten the pot.
          [And believe you me, I know that 30/60/90 day AP/AR hellhole all too well...]

          Now here are two questions and a little plea for advice:

          1) If you're of a mind to di


    • When I started out contracting, even though I was billing monthly, I didn't get to see a single cent for just over 3 months.

      Everyone took their time for paying, the client took a couple of months, and the agency I went through another month on top of that. I'd maxed out all of my credit cards and have even borrowed from my parents just to survive.

      Of course, when I finally got paid, it was in 3 months the same as I'd previously made in an entire year, so all of my debts went instantly, but it was really ha

  • me too ! (Score:5, Insightful)

    by selderrr ( 523988 ) on Sunday January 30, 2005 @02:12PM (#11521129) Journal
    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 ! (Score:5, Interesting)

      by Monkelectric ( 546685 ) <{slashdot} {at} {monkelectric.com}> on Sunday January 30, 2005 @02:39PM (#11521316)
      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.

      • Re:me too ! (Score:4, Insightful)

        by Steve Friedl ( 854647 ) <steve@unixwiz.net> on Sunday January 30, 2005 @02:55PM (#11521416) Homepage
        > Customers will abuse your good nature to no end if you do freebies.

        I've not found this to be the case: the consultant gets to pick what he does and does not charge for, and if customers know that every time they call you, they get billed for 5 minutes, it doesn't create an entirely friendly environment. I think that a certain amount of "freebies" is part of maintaining a good customer relationship: I get paid for my time, but I don't nickel-and-dime my customer to death.

        Steve

        • I think that a certain amount of "freebies" is part of maintaining a good customer relationship

          Ok, well let me walk you through a typical day of mine with freebies:

          8:00AM, Melody at so and so wakes me up becuase she cant get her digital camera to work.
          12:00PM, Melody calls again because she got her camera to work but how does she get the pictures off it?
          1:30PM Bill from so and so calls he just wants a *really* quick change to his application/website/whatever.
          3:00PM Lisa from so and so calls because s

        • The policy my company takes is that if is a phone call only (no Terminal services required) and the call is less than 10mins per issue then it is free, otherwise it is billed.
      • Exactly, choose your clients well. If you walk into a "server room" and there is about a half mile of Cat5 on the floor, the servers are being used as a table for paperwork, you see a Windows NT 3.1 CD lying around among over a hundred boxes of software, there are huge freaking dust bunnies (like 6" wide) in the server cases (which you can see because the sides are missing) and the "IT guy" is still working there - don't walk, RUN out of there.
        It doesn't matter if your family needs to eat raman noodle for a
    • ...even if it is only 5 minutes : bill'em...

      If only I could do that with my family...

    • Re:me too ! (Score:3, Insightful)

      by Seumas ( 6865 )
      Keeping your first customer is just fine if they're making business for you. You can lose money on a person directly, but rake it in by the business they throw at you elsewhere.

      Also, you don't have to be an hourly-billing nazi. You can go the extra mile for a customer without charging them - as the whim guides you. You just have to know how to make it clear that it's exactly that - something extra you are doing beyond the call of duty and that you normally _WOULD_ and _WILL_ charge for it.

      You don't have t

  • So true (Score:5, Insightful)

    by ScentCone ( 795499 ) on Sunday January 30, 2005 @02:12PM (#11521133)
    Yup, most businesses would rather have an IT consultant that takes twice as long (and three tries) to solve a problem than one that won't return phone calls for days. I know, I've lost customers while busy with other ones - not because they were in a hurry to get something done, but because they wanted to talk it through and know, quickly, if what they're planning (whenever we would eventually get around to it) was rational or even possible.

    Communication, communication, communication. And it's not billable, most of the time - so take that into account when you set your rates for the time you can bill. You can spend 60 hours a week working in this mode, and only be able to charge for 15 of them sometimes.
    • Yup, most businesses would rather have an IT consultant that takes twice as long (and three tries) to solve a problem than one that won't return phone calls for days.

      In other industries, this is called "customer service" and it is something that is sorely lacking in IT.

      I do some of this on the side after hours and have been told that "being available" - even just returning phone calls and e-mails in a semi-timely manner - has gained me many customers and kept the ones I've got happy.

  • One of the most debased professions... (Score:5, Insightful)

    by ites ( 600337 ) on Sunday January 30, 2005 @02:12PM (#11521134) Journal
    "Consultant" used to mean an expert professional who could solve problems and provide advice based on years, even decades of experience.

    With the Y2K and dot-com booms, "consultant" became used to mean someone with more than three months of IT experience...

    Thankfully (for us real consultants), most of the amateurs have returned to horse farming, or whatever they used to do.

    It'll still be a while, however, before "IT Consultant" on a business card impresses anyone.

  • Consultants with poor skills.... (Score:5, Interesting)

    by jhouserizer ( 616566 ) on Sunday January 30, 2005 @02:13PM (#11521139) Homepage

    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.

    • True. I did contract development for a large mid-western company for about ten years. One project that fell into my lap was a remote document retrieval system. The idea was that the remote plants (all over the country) would be able to download and print production drawings and documents directly from the central engineering server. This was important to avoid production runs made with outdated prints, but also to maintain ISO compliance.

      The original PC-based system (this was back in 1995 or thereabouts)
    • The funny thing is that the consultants with the poorest technical skills make the most money

      If you're saying what I think you're saying, then you missed the point of the article.

      You're right, but in my experience the lower technical skills are usually backed up by good communication skills. Expect those with good communication to continue to out-earn propellerheads throughout their career. As a rule, the guys who control the checkbooks prefer to have talker than a thinker as "their guy/girl".

      Why?

      No on
      • Consulting is about customer management as much as it is about delivery of services. I agree!!! It's about knowing which type of person they prefer and playing that part. It also depends on your role, I'm often hired as a Project Manager to handle difficult/trouble projects. In that role understanding the technology is often secondary to being able to communicate to the customer and get their buy-in on what has to be done. I have found the guys who authorize the expenditures want someone who can talk to th

  • Technical skill? (Score:2, Interesting)

    by theapodan ( 737488 )
    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

    • Re:Technical skill? (Score:5, Insightful)

      by Steve Friedl ( 854647 ) <steve@unixwiz.net> on Sunday January 30, 2005 @02:40PM (#11521320) Homepage
      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 [unixwiz.net]. Mainly I write C code all day, though I'm sure that this slashdot post is seen as "marketing"...

      Steve


    • Modded "interesting"?

      Gimme a break. This moron never bothered to read anything else on the site.

      If he had, he'd see there is a ton of technical articles there and and the author writes them for tech journals.

  • Different flavors of Consultants:

    • Contracting
    • Consulting

    "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 m

    • Re:One consultant to another (Score:5, Interesting)

      by ScuzzMonkey ( 208981 ) on Sunday January 30, 2005 @02:42PM (#11521325) Homepage
      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.

  • Sub Contracting (Score:2, Interesting)

    by odyrithm ( 461343 )
    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.

  • Pros and cons (Score:5, Interesting)

    by defile ( 1059 ) on Sunday January 30, 2005 @02:19PM (#11521177) Homepage Journal

    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.

  • Resume Placement (Score:2, Funny)

    by Anonymous Coward
    I've been a self-employed consultant for almost 20 years, and I'd like to place a sales pitch for my services on Slashdot. What is Roland paying you?

  • So true ... customer service keeps me in business (Score:3, Insightful)

    by greenmars ( 685118 ) on Sunday January 30, 2005 @02:20PM (#11521184)
    I've been doing IT consulting evenings and weekends for ten years now, and I've seen lots of other consultants for the same client come and go. Lots and lots of the ex-consultants would not return phone calls, would implement solutions that they wanted instead of what the customer wanted, etc.

    My advice for new consultants:

    Incorporate. Protect your savings, house, car, etc., if there's a disaster.

    Be available. This includes evenings, weekends, and vacations.

    Be responsive. Check your customer email several times a day and respond.

  • Fixed bid projects. (Score:5, Insightful)

    by mingot ( 665080 ) on Sunday January 30, 2005 @02:21PM (#11521194)
    Excellent article and I suggest any consultant or person thinking of being one RTFA.

    One thing I would like to add, though, is a fixed bid tip. The author admits he does not have much experience with this type of work and omits one important detail that can save a lot of headache for both parties and keep cashflow going during a large project.

    Always try to do a fixed bid project with milestone based payments. This keeps the customer happy since they get to see the code at intervals, gauge the progress, and offer feedback. It lets you get paid as you go and helps you use customer feedback to make changes (and no matter how good the spec, there will be) as you develop.
    • Good advice. We don't get involved in many projects that would have milestones but we do require that most customers pay hardware/software costs upfront. Unless they are long-term customers in which case we require 25%.
    • Also, be sure to CAREFULLY control scope. Scope creep can cost you a lot of money. You should negotiate payment for anything outside the orginal scope. That is a tough thing to do, but it protects your business from begin stuck for years doing something that should have been done in a few months.

  • I've been a self-employed consultant (Score:5, Funny)

    by Fuzzums ( 250400 ) on Sunday January 30, 2005 @02:32PM (#11521267) Homepage
    "I've been a self-employed consultant for almost 20 years - I still have my first customer!"

    Parents... :D
    • I am reminded of a Johnny Bravo episode where Mr. Bravo is trying to earn money in order to buy his mother a birthday present. His diminutive friend Susie suggests that he become a consultant; that is 'Someone who tells people what to do.'

      Our hero goes out into the street, sees a man who is walking with a slouch, walks up to him and says:

      Johnny: 'Don't slouch. That'll be 10 bucks.'

      Sloucher:'Gee, thanks. Here's your money.' (Hands Johnny a bill). 'You know what you should do with that?'

      J: 'What?'

      S: 'Put

  • Some of this strikes a chord with me... (Score:4, Insightful)

    by andalay ( 710978 ) on Sunday January 30, 2005 @02:37PM (#11521304)
    A financially-struggling consultant does not give a customer The Warm Fuzzy Feeling(TM)

    Recently, I was in salary negotiations with a company without any competing job offers. I asked for a really high salary relative to others applying for the position. When asked why or do I have any other offers, I simply reiterated that I am very interested in this position, and the salary is what I have discovered through other companies is market.

    The name of the game is: "Never show all your cards"

  • The secret formula is... (Score:5, Insightful)

    by invisik ( 227250 ) * on Sunday January 30, 2005 @02:38PM (#11521312) Homepage
    I saw this in a advertisment for a consulting gig.

    50% Personality, 50% Technical Ability.

    If you can't walk into an office and within 2 minutes be mostly comfortable and getting along with everyone, then you shouldn't be a consultant. You don't have a long time to get going, like you would if you were an employee. There's no training, no hand-holding. You are there doing your thing. It's actually quite fun and interesting most of the time!

    I also still have my first client.... heh

    -m

  • Simple Rule of Thumb. (Score:5, Insightful)

    by sanityspeech ( 823537 ) on Sunday January 30, 2005 @02:43PM (#11521332) Journal
    Persons allergic to incompetence cannot be consultants. - Ioan Tenner
    • Great quote! I'll repost a quote on a related theme that I've become fond of:

      "There are few things worse than close supervision by someone who doesn't understand what you're doing."

      -- Paul Graham, What You'll Wish You'd Known [paulgraham.com].

      Often the case on consulting projects when a client who lacks expertise wants to make design and development decisions that he's not qualified to do.

  • Generally good advice, except about the copyrights (Score:3, Interesting)

    by ScuzzMonkey ( 208981 ) on Sunday January 30, 2005 @02:54PM (#11521405) Homepage
    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.

    • However, I think he's off-base on his suggestion to allow the customer to "own everything".

      What I've typically done is include a clause to the effect that "Company reserves the right to re-use certain portions...etc, etc," If I'm ever asked, I simply explain that technical work (like programming) to a large degree, is based on collective knowledge. The more collective knowledge, the better the service. No one customer can take ownership of the means used to provide the service being offered- it's simply n
    • I recently finished my first big custom project (a hair over a year of constant work), and learned a lot about customer relationships. The article was very good, but I also choked when I got to the part about copy rights.

      I told my customer up front that I would retain all copy rights to the code. I would provide her company with full source code, and the company would have a license to modify the code for its own internal use.

      I also told her that it was not practical for me to then support their modifie

  • Challenges I've experienced (Score:5, Interesting)

    by westendgirl ( 680185 ) on Sunday January 30, 2005 @02:54PM (#11521407) Homepage
    I've been consulting for seven years -- full-time for six of those years. I find that my greatest challenge is getting my contacts to understand how my skills and experience have evolved over time. Although newsletters, success stories and a website can help explain developments, people don't always read them. So it can be difficult to explain that I do far more advanced work than I did seven years ago. I actually find my most challenging and interesting work comes from newer clients, who can be more easily persuaded of my full skillset. I don't mean that my longer-term contacts think I'm an airhead -- it's just that people who don't see you regularly have a hard time understanding how things have changed. That's why it's important to market yourself to existing contacts, as well as new ones.

    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.

    • on evolving skills (Score:4, Interesting)

      by Quietti ( 257725 ) on Sunday January 30, 2005 @05:50PM (#11522908) Journal
      My first two IT jobs were both in Technical Writing:
      • 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.

  • Excellent read... this is something that I was going to do had I not been hired by my Dream Company [ni.com]... it would have been very useful, but now I'll let someoene else take the reigns.

    Try lots of shit and see what works :)

  • As a consultant myself I only realized that I am one a few months ago. I was self employed for 6 years now working for different customers on a variety of projects. I always thought I was a web guy, a sysad, a tech-writer or even a tech-teacher. But it turned out that I am just that: an IT consultant.

    Thanks heavens that it turned out I am pretty good at it. ;-)

    This is probably the best read on this subject I had in a long time. If you are planning to do this kind of job and follow his rules you really mig
  • Hey folks --

    I too am a small-time consultant. I have a client who likes my work. There has been a lot of feature creep, which is good as far as moeny, but problematic for keeping organized. I'm looking for a software package (hopefully LAMP) that is designed for the one-person developer -- feature estimation with nesting and dependencies, hour tracking, and invoicing. I've looked at dotproject and it seems to lack invoicing.

    I would like to do this on my own of course, but I don't have the time with this

    • I would be very interested in finding a tool like that. Something FOSS, hopefully. There's aceproject.com, but they're a commercial service ...

      If you find anything, could you let me know? Thanks.

      (I've recently switched to Bugzilla for bug and feature request tracking, that's been quite useful :))

    • Didn't see invoicing mentioned on their site, but I keep hearing a lot of good things about Basecamp:

      http://basecamphq.com/ [basecamphq.com]

      It is a newer offering, which also means it's likely actively gaining new features (they may be open to suggestion), and the price is more than fair IMO.

      Disclaimer: I'm not affiliated with Basecamp in any way, it just came to mind. For my affiliations, see .sig :)

  • in my area of the country. A couple of years ago when I started out there were a great number of consultants in the area. Most of them had the social skills of Atilla the Hun but people used them because they just figured that all IT people were freaks. Currently, these consulting companies are having a very difficult time. Other companies (like mine) are hiring people that have people skills. It doesn't take a genius to figure it out. I must have interviewed 15 people trying to find a guy (no women a

  • 10 out of 10 (Score:4, Interesting)

    by perler ( 80090 ) <pat@patspTWAINlanet.com minus author> on Sunday January 30, 2005 @03:42PM (#11521824) Homepage
    brillant article. one addition (i also wrote it to steve):

    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

  • The trouble with consulting (Score:3, Insightful)

    by rsilvergun ( 571051 ) on Sunday January 30, 2005 @04:02PM (#11522033)
    is competition from a class of people I call "idiots with a screwdriver and a copy of Norton". It's so easy to get started consulting (although it gets hard, fast) that just about anybody looking for work whose even seen a computer considers jumping in. It's really tough charging a decent amount for decent service when I've got morons charging half what I do and then calling Microsoft for support. Oh well, at least with everything going to India these shmucks are out their tech support life line. Should help weed out the worst of the bunch. My favorite is having another (usually better looking/more personable) consultant hiring me do to his job, and then double charging the customer. Oh well, I still get paid....

  • Customers Paying Bills on Time (Score:3, Interesting)

    by hackus ( 159037 ) on Sunday January 30, 2005 @04:05PM (#11522072) Homepage
    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
    • 60 days? Whaa whaa whaa!! One hundred percent of my customers pay by 60 days. The trick is to set it at 30 days but don't bitch until 60 days have passed. Usually after writing or calling once they take care of it. I have NEVER had to write off a bad debt. I've been in business 2.75 years.

      I -HAVE- had to fire (so far) only ONE client who had payment problems (and had them with all their vendors)

  • Been there, done that (Score:5, Funny)

    by Linker3000 ( 626634 ) on Sunday January 30, 2005 @04:09PM (#11522118) Journal
    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...

  • "Something" about them that makes people want to help or buy from them...

    I was thinking about becoming a consultant. After looking at various successful self-employed people I've known in or out of my family circle, I've come to the conclusion they have one thing in common. Due to their personality, charisma, looks, or whatever combination thereof, other people feel compelled to do something for them or buy something from them.

    Because of that "something", they can get the contacts, get the customers, ge

  • Reading the article, it "would appear" that the author thinks that "the secret" to being a "good consultant" is to "put things in quotes" all the time.
  • I still have my first customer!

    Realize he's talking about his mom.
  • Article is interesting (I disagree with some of it, but hey, opinions are like strings, every yo-yo has one).

    The one thing I want to point out is that the article is very *VERY* centered on consulting from a freelancer point of view. Working for a consulting company is an entirely different ball of wax. The emphasis on technical vs. soft-skill is different, and the politics are totally different.
    While the author does a decent job of talking about what it's like to be a freelancer, don't read this thinkin
    • > Working for a consulting company is an entirely different ball of wax.

      This is absolutely true: being just one guy has a whole different set of dynamics than being a firm. One of the nice things about being solo is that overhead is generally so much less, but your customers don't see much depth for backup. I'm sure the list of difference is long and distinguished...

      Steve

      P.S. - I'd love to know what else you disagree with, either here or privately.

  • Transparency really is key (Score:3, Insightful)

    by real gumby ( 11516 ) on Sunday January 30, 2005 @05:59PM (#11522968)
    TFA says (among other good advice) that transparency is important. It really is. I hate getting bills I don't understand. So with our clients:
    • We don't do anything billable without a contract in place. This means there are no unpleasant surprises later when the client says "oh, I didn't realise this would be so much" or "we don't have the budget allocated." On the other hand, if there is no arrangement ahead of time (perhaps what I'm doing is outside the scope, or they're a new client) then we don't invoice, and the time we spent was our problem.
    • Don't charge for the small stuff. Quick phone calls don't add up to a ton of short charges as they do with a lawyer. But it also means that if the subject is clearly long then I have to pay attention and be sure to tell the client "You know, this is going to take more than a few minutes. Let's schedule a time to go over this in detail." It also means, as TFA says, that you have to fire people for whom this doesn't work -- in that case the calls are just a symptom of something worse wrong with the client relationship.
    Basically our principle is: if you wouldn't like to receive a bill for it, you probably shouldn't be sending one for it.
  • Your 'product' isn't something the customer can hold in their hands, taste, or smell. It's an intangible. They know their machine is getting fixed, the hardware is being installed, thier program is getting written, their network/server is being tweaked, etc... But, it's all intangible to them. That leaves customer service. They have to feel GOOD about what you've done. If they have any feeling that you can't do the work then no matter what you do, however great it is, won't be enough. They'll still f
  • I'm a college student who's just gotten some freelance marketing work. I signed a contract, but since I'm not too experienced, I left out a termination clause in the contract.

    Now, the real issue comes in now that I may be hired by a great agency full time with salary and benefits, but I don't know if I'll be able to work on personal projects on the side like this. Now, normally, if I got the job, I'd just quit this freelance thing, but since I don't have a termination clause, I can't figure out any way ou

  • self-discipline (Score:5, Insightful)

    by LuxFX ( 220822 ) on Sunday January 30, 2005 @08:45PM (#11524282) Homepage Journal
    I, too, run my own business. With the article author's definitions, I would be a consultant, although I never really decided what to call myself. The part of the article that I can relate with the most is deciding if you have enough self-discipline to work by yourself at home.

    I've been doing this kind of work for the last six or seven years. And it took me the first five to figure out how to work at home. During that first five years, working at home was not easy! I hadn't yet developed the discipline needed, nor the mental state necessary for home and work to co-exist.

    I eventually figured it out, and am extremely happy with my lifestyle right now. The first step was learning how far I had to distance my work life from my personal life. For example, we bought a new house this year. When looking for a house, the number one necessity on my list was an office area on a seperate level than the living area. We found one with a basement den that became a really wonderful office. It's a half level from the living room, and a full level from the bedrooms. Wonderful.

    Something else I learned was that, no matter how much I thought I could get done with a TV on, it was best to be distanced from all television. The same goes with music with lyrics. For maximum concentration, I need to listen to instrumental music (fortunately my two favorite musical genres are classical and movie soundtracks). Interestingly, as long as I play only instrumental music, I have better concentration than if I don't listen to any music, because it will drown out other distracting noises. (headphones are also a good signal to the wife: don't bother me!)

    Speaking of the wife, another challenge after getting married was not only me learning to work at home, but my wife learning to let me work at home. Make sure that everybody in the household knows that work time is work time. If you worked at an office, nobody would expect you to swing by the house to straighten up the living room at 2:30 in the afternoon. Don't make it an excuse for not doing any extra work (believe me, wives hate that), but make sure that your wife knows that while she's welcome to ask you to help out, not to expect it to get done until after your work time.

    Now, if anybody has figured out how to cure the /. obsession, please let me know, that would really help with my productivity...
  • I started my own consulting business about 18 months ago, and was lucky enough to land a nice 14-month long gig with the company that laid me off, working on a major software implementation. Nice, eh?

    Well, it was, until the project kept growing, and they kept requiring me to bring on more people to help finish the project. I was opposed to adding people, but it was "if you can't, we'll have to find someone who can". We were billing on an hourly basis, but the lag time on invoices began to creep up, mos

  • The real deal (Score:4, Interesting)

    by threedognit3 ( 854836 ) on Sunday January 30, 2005 @11:04PM (#11525199)
    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.

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