Consulting companies

[Bill Tews]

I am a consultant through a "consulting company". I get paid a salary, but

get paid straight time (salary / 2080) per hour for each hour about 40 per

week. Thus, it gives the effect of hourly.


I am very interested in going independent, but am unsure how to get started.

Can anybody point me to a web site that goes through this kind of process?

Any hints? Does anybody "subcontract" to take care of the sales side of the

business?

[Jim McCreary]

You get started by talking to everyone you know, attending local technical meetings, and spending time on the phone. This takes a lot of your time and may not be your best skill.


If you want someone to take care of the sales, you end up working for a body shop. They typically take about 30% of the client's money for fees and overhead. In all fairness they do have a lot of overhead in recruiting good workers and do have some book keeping expenses and pay some taxes. However, as the worker it doesn't feel that they do much for me since I was only placed once over 18 months ago and they are taking 30% of the contract money.

[Once and Future Consultant]

Agencies are not all created equal.


If you negotiate your second year on a contract, and the agency does nothing for you, then in some cases, you don't pay the second year. This is the typical "head hunter" kind of agency.


If the agency does things on an ongoing basis for you, then you likely pay them on each contract. This would be cases where you are allowed to put them on your business card, you can get some services from them such as taxes done and accounting advice, and maybe a mail drop and some very limited secretarial services.


Another option is to form a partnership with one or more other persons who you trust and who are going to contribute to the same general business as you. Thus you may see three or four app. programmers form a company. They can share an office, employ a secretary, share the burdens of things like taking out adverts in trade mags, get contracts and contacts for eachother, and so on. This is, of course, the deep end of the pool. And you should be sure of the law in the area you want to work before you embark on this.

[chaitra]

Can anyone pl. tell me some general differences between a Discussion Forum and a discussion Board. The difference between their implementation and their design?


thanks in advance


regards

chaitra

[rick]

In this site, there appears to be no difference at all.

There is only a difference in usage that is described at

the top of the forum page.

[Rick]

In this site, there appears to be no difference at all.

There is only a difference in usage that is described at

the top of the forum page.

[Nathan]

I've been an independant computer consultant for 6 years. Owning the company is great.. here are the things I've learned.


1) Start by cold calling local companies.. (Your local business/enterprise park is a great place to start.) just get your name out. Business cards/small brocure work good for this. And, its about the only time you have to wear a suit. :)


2) Let ALL your friends know what you are doing, and make sure they know you are good at it. Let them know some services you have etc... (Its amazing how many leads you get from friends)


3) Don't be afraid to pick up a 9-5 when business is slow.. it happens now and then


4) Go slow.. Get a small client base and work pure quality.. give a lot of discounts etc.. until you get really off your feet.


5) Setup an office in your home for awhile.. just like if you were Telecommuting. An actual office that you rent is way too much overhead for one person to just "start a business".


6) Don't even think about all the extra "fringe benefits" such as 10000 phone lines, really fancy expensive briefcases etc.. They just waste money you need to save.


7) Don't pay yourself a fortune. Lets say you charge $100/hr (discount consulting.. heh).. Only take about $50 for yourself.. the rest goes back into the company's savings.


8) If the workload is too huge.. find a friend or another small company to sub-contract to. This works both ways, after you give them some business, during your slow times, they will return the favor.


9) Get 2 phone lines.. Phone #1 is for your business voice line, the second if needed is for internet connections/FAX machine if you need one.


10) Use your computer as an answering machine, make sure it can page you when you have new messages.


Those are the ones I got off the top of my head..


E-mail me if you have any ??'s..


Nathan Haby, nate@nresults.com

[Colin Davies]

I Couldn't agree with you more Nathan. Those are Ten top tips.

I have seen friends and associates go down the tubes, I believe by just ommiting one of those tips.

I would append Tip 7 there also to Understand what Working Capital is.

If you don't your debt collectors will be knocking on your door or worse.

Just because you billed out 300 hrs last month. Doesnt mean you'll get paid for 300 hrs this month, as in a Salaried Job. If a big client goes Bankrupt on you. It'llt hurt. So have other clients.


Regards

Colin Davies

[Dianna Dearborn]

Great response! I can only add two things gleened from two $5000 (total) lessons:


11) Don't work for friends.

Money changes things and can hurt a friendship unless it is unusually strong or they can separate work from friendship. I miss the friend more than the money.


12) Always, ALWAYS write up a contract encompassing:

12.a) Agreement on what a "Completed project" means and some "quality" measure

Nothing is 100% perfect and bug free! [ except my code, of course :) ]


12.b) Time frame and milestones

Plan design reviews, simulations, demos, etc. Get sign-offs for agreed items. Tie these to mid-contract payments. They also help you plan better on the next contract.


12.c) Deliverables

These include exe, source, help files, makes, docs, etc.


12.d) Ownership and exclusivity of algorithms and code

You may have code libs, etc., you reuse on every project that you want to keep yours and don't want customers to reuse free or sell.

Customers may want to keep you from developing the same/similar app for competitors for a period of time - two years is reasonable)


12.e) Post-contract maintenance and support

Bug-fixes vs. feature creep - that's why mid-contract reviews help. 2-3 is good for bigger projects.


12.f) Payment schedule

You *can* ask for 7-day payment after billing. It also helps in court, if needed.


12.g) Contract renegotiation provision

The customer may (often?) want new features.


12.h) Contract cancellation provision

You may want out for non-payment, etc. Make sure to get paid for your time if customer cancels project for other than non-performance reasons.


12.i) Limited liability provision

Sh** happens! See a lawyer.


12.j) Conflict resolution

Investigate local arbitration groups.


Written contracts help, even for small jobs, because reasonable people can disagree on the meaning of words like: complete, feature, quality and bug (use "software defect"). A verbal contract isn't worth the paper it's written on - especially between friends or small projects. That was my biggest mistake, though it was only $1200 of the $5K. We thought we agreed on the project at the onset but fought over nearly everything.


Payment for milestone met and quick turn-around payments on billing keeps losses low if the project bombs for management reasons or a startup bellies-up (that was my other big mistake). At a previous company, we hired a contractor who wrote in his contract "payment in 7 days after billing". You should-a seen how the mgnt people panicked :) when we defaulted on this item at the first billing. A check was written that day and no others were late!


Not all customers are goodness and light! Fairness is in the eye of the beholder. Paraphrasing the "good art" quote, beware of the customer who's attitude is something like, "I don't know what good programming is, but I recognize it when I see it." Ask for an engineering interface for the project or a knowledgeable referee. That mistake happened to a friend of mine.


Indemnify yourself for non-performance - get a bond. Sometimes unexpected things happen that make you miss a deadline like a disabling auto accident or an illness or a death in the family, etc. Business is business and home is home. Keep them separate and protect home. You don't want to be forced to sell your house for a customer's claim of "lost profits". That scares me most.


Others here with more experience will have much better insight. Call me twice burnt and *very* shy. I learned that knowing the business is not the same thing as knowing business. If I contract again, I will be better prepared!


From a happy, salaried, 9-9 telecommuting employee...

[Once and Future Consultant]

Having multiple clients is really a keystone, but not just for the possibility that one

goes bankrupt.


There was once a consultant engineering firm, about 20 people. They did more

than 90% of their work for one very large client. The union at the client decided

that this consultant company was taking too many jobs away from the union.

Poof! The consultant company is no more. Killed off by their own good work.

[Jim McCreary]

Money makes the world go round. Had an agreement, mostly verbal, that I would invoice every 2 weeks and they would pay within 2 weeks. Started out ok for about the first month and then payment stretched to 30 days (I was "out of sinc with their schedule".) and then to 45 days ("well our clients are slow pay too") When I informed them that I would have to shift priorities to another client because my accounts receivable was too getting too high and I had bills of my own to pay the CEO (small company) tried to get rid of me because I had a "bad attitude." I had a good working relationship with my technical contact inside their firm and I continued to work for them off and on for nearly a year until they found someone else who was hungry enough to work under their terms. I had to wait nearly 60 days for payment of my final invoice.

[Dianna Dearborn]

Sounds *too* familiar, Jim. Hard lessons, huh. Expensive, too. I got strung along too. I think they squandered their startup capital on the fancy digs and fancy furniture. If I ever do a start up, I will pinch pennies until the cash coming in starts blocking up the hallways :).


I'm glad that you finally got paid, tho...


Do you know if anyone on the net keeps a list of these *generous* money types to warn other contractors? My experience is too old to list, but I was just-a wonderin'

[Once and Future Consultant]

Posting gripes about past contracts could be trouble. Who is to verify the stories?

Who is to deal with it if there are false accusations? Who is to be held accountable if

there is a law suit? Who decides what stays posted and what does not? Sounds like

a lot of strife for the person maintaining such.

[Jim McCreary]

Not a good idea.

[Dianna Dearborn]

You and Jim are both correct. What I had in mind was more like a BBB listing by a contractors group, but now that I think about it, it was a dumb idea. :( Besides, the nightmare I have may turn out to be your best contract ever.

Never mind.