Watching the animated children’s movie The Land Before Time with my daughter some years ago, I learned there really was a green valley, but the journey to it wasn't all that easy. In fact, it was filled with dangers and disappointments for Littlefoot and his friends. Before you get to your green valley, you will likely experience the ups and downs of independent consulting.
Striking out on your own is exciting, challenging, fun, and nerve-wracking all at the same time. If you have several years of solid paid work experience and possess expertise others are willing to pay for, then you may well be ready to enter the cruel, cold business world as a consultant. My intent, however, is not to help you decide whether or not you should strike out on your own, but to arm you with the knowledge needed to smooth out the rough spots nearly all independent consultants will face at one time or another.
The disadvantages to a life in IT consulting
I’ll start off with the downsides to working as a consultant so we can end on a positive note. Obviously, there are exceptions and new Internet offerings are changing the world of work and the world of consulting on a daily basis. However, here are some issues you need to be aware of and plan for because independent consulting is more risky than traditional employment.
- You will not have any paid vacation. In fact, many independent consultants will get hit twice: no paid vacations and no billable work while on vacation. These factors make your time off twice as expensive and twice as precious, so make certain you consider this or plan for it when taking time off.
- Make sure you have access to a good accountant to keep you out of trouble with the IRS as well as a good attorney to review and draft contracts. You don't want to find out when you're ready to make your annual estimated tax payment that you should have been making quarterly deposits all along. Make sure you calculate such professional fees into your fee schedule and understand that they are part of the cost of doing business.
- For anyone in need of professional liability or errors and omission insurance, an independent insurance agent is also a must-have resource.
- For most, there are no sick days as you may have been accustomed to, and there are certainly no sick days with pay. So plan accordingly.
- You won't always get paid on time. The client may not be satisfied with your work and decide to withhold partial payment. In some cases, your client may not pay you until he is paid by a third party, so make sure you are aware of such contingencies.
- Neither your work hours nor your pay is likely to be on a predetermined schedule, making planning and budgeting that much more critical.
- For many, freelance work tends to be inconsistent: a feast-or-famine scenario.
- You are responsible for marketing yourself, and will have to add business development, organizational, and project management skill sets to your repertoire.
- It is a myth that your time is your own when you're self-employed. More often than not, your work and free time is dependent upon your client's availability and project deadlines.
- Unless you work through an agency—in which case your hourly compensation will be less—you will have to fund your own benefits package.
- You will have to pay for your own professional development and staying up-to-date with your technical skills and certifications, especially since consultants—more than anyone else—are expected to be current on all the latest new technologies.
- Qualifying for big-ticket credit items, such as a mortgage, is much more difficult for the independent consultant than for a corporate staffer who is assumed to be in a more stable work environment.
There’s an upside, too
But it’s not all gloom and doom. There are lots of advantages to working as an independent. Here are a few:
- Freelance or contract consulting can be very lucrative and more flexible when compared to the traditional corporate career ladder.
- Assuming you can afford to do so, you can turn down or not pursue projects you don't have an interest in, or you can work on multiple projects if you can multi-task assignments and prefer the variety.
- Even though you may have to pay for training yourself, the opportunities for professional growth and acquiring new skill sets are much greater for independent consultants than for their corporate counterparts.
- You will have the opportunity to build something of value (your business and your professional reputation) and be compensated in direct proportion to your efforts.
- A number of Internet sites now offer a wide variety of benefits and services for independent consultants.
- Your level of self-satisfaction and sense of accomplishment is generally much higher, suggesting a higher level of job satisfaction when compared to your colleagues in the corporate world.
Some of you have already encountered several of the ups and downs I listed, while others may be fortunate enough to never encounter any of the typical drawbacks to independent IT consulting. Knowing what obstacles you are likely to face as a consultant should make it easier for you to plan for the downturns. It's an old cliche, but forewarned is forearmed.
Edwin W. Smith is vice president of training for IntraLinux, Inc., the first open source networking solution that comes with onsite installation and support at the customer's premises. He’s also founder and CEO of ITTalent.com, an award-winning, one-stop employment and recruiting resource for IT, IS, and MIS professionals.What are the potential drawbacks to a life in consulting? How about the advantages? To share your thoughts, post a comment below or send us a note.