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The most stressful elements of breaking in to full-time consulting

When you became an independent consultant, was the most stressful part finding enough business to stay afloat, the feast or famine syndrome, or something else?

In response to my article on landing that all-important first client, TechRepublic member JLogan3o13 suggested another topic idea:

One thing I would like to see, and bet others would too, is a poll or topic about how to get over that horrendous hump we all face as consultants - that point where you have business coming in, and are faced with the decision to finally make the break from the full time job or not. For me I know it was terribly difficult; I knew I could drum up more business if I spent more time marketing myself, but I couldn't afford to spend that time unless I quit the 9 to 5. Definitely a stressful time, but one I bet everyone handles a bit differently.

Any time you make a big change like this, a certain amount of stress accompanies it -- especially when the change involves your livelihood. Any uncertainty about paying the bills is going to keep you up at night, wondering if you're handling it the best way you can. I had it easy: my employer converted to a full-time client, so I didn't have the uncertainty about income. Nevertheless, the change still brought a lot of stress with it. Somehow the relationship seemed more tentative (although it wasn't), and I had to worry about funding my own benefits, paying my taxes, and a hundred other little details I never thought of before.

For most consultants, though, the decision to drop their full-time job has much bigger consequences. First and foremost, it means a temporary loss of income while you build other business. Before making that jump, you need to weigh your tolerance for going without a paycheck.

There's also a significant risk that you might not be able to drum up as much business as you think you can. You should set an income goal that is both reasonable and sufficient, but you should also prepare for a worst case scenario. What is the minimum revenue that you feel certain you can produce? This should include only business that you have already contracted. The longer that you would be able to survive on that income alone, the better your chances of not needing to. That isn't just Murphy's Law at work -- if you don't have to scramble to avoid bankruptcy, then you can be more clear-headed and strategic in your marketing plan.

The great thing about full-time employment is that you always know exactly how much money you're going to make. The bad thing about full-time employment is that you always know exactly how much money you're going to make. Going independent may allow you to earn a higher income overall, but you pay for that in its unpredictability. The "feast or famine" syndrome in consulting is so common that just saying those three words makes every consultant nod their head in agreement. You should evaluate your tolerance for sporadic income before taking the plunge.

Full-time employment also means working for one employer. That employer may have conflicting goals of their own, but in the end they have to decide what's important to them. When you have multiple clients, they all think they're the most important -- and that's how you should treat them, too. That means skillfully handling multiple #1 priorities, including the priority of finding additional business to keep your pipeline from drying up.

Since JLogan3o13 asked for a poll, let's have one.

Also read on TechRepublic: What's the most challenging part of working as an independent?

About

Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant b...

8 comments
matt.rodela
matt.rodela

I recently wrote a post on my blog about how tough my first year of full-time consulting was: http://www.yfncg.com/2012/04/12/first-year-of-consulting/ It took me a lot longer to build up a steady list of clients than I thought it would. And it's a much bigger deal when you're relying on those clients to pay your mortgage, as opposed to just some extra cash on top of your day job.

Greg Miliates
Greg Miliates

You'll be able to quit your day job when you have a reliable minimum monthly income coming in from your consulting work. That's essentially what I ended up doing. I started my consulting business on the side and grew it over time. After about 12 months, I realized that my time spent at my day job was getting in the way of how much I could earn consulting; at that point, I went part-time at my day job while I ramped up my business, and a couple months later, quit my day job completely. But one thing that helped was that my consulting income and workload was consistent and consistently growing. However, I didn't start my consulting business thinking that it would eventually become my full-time gig. When I started consulting, I just liked having the extra money--which was wonderful. I started my consulting business in January 2007, and within about 15 months was able to phase out my day job. Since then, I've QUADRUPLED my former day-job salary, and I'm MUCH more secure being self-employed and having lots of clients than I ever was by having a single employer. You can check out an interview I recently did where I talk about how I made the switch from employee to consultant, and where I talk about some of my initial fears & doubts, and give actual income & rate numbers: StartMyConsultingBusiness dot com / how-i-made-the-switch-from-employee-to-consultant Greg Miliates StartMyConsultingBusiness dot com

Odipides
Odipides

One of the biggest problems I encounter is that ALL one's customers expect to be at the top of the work schedule. Despite having procrastinated for three months, they STILL believe the original delivery date applies and that any other work commitments on the part of the consultant must be dropped immediately in favour of their own work. I find I've become very good at telling people to "Go to Hell" but making them look forward to the trip.

Professor8
Professor8

The difficult part is not being shoved from a real job into being bodyshopped. In recent years the difficult part is escaping from the bodyshop into a real job. Nearly all of the old tech placement agencies now have theor own bodyshopping operations, and use a lot of pressure on job seekers to force them into the bodyshop stables.

ylto
ylto

I never did understand worry. If you think you can influence an outcome to be more positive, why are you worrying about it? Make the change and reap the rewards. If you CANT affect the outcome, why are you worrying about it? Move on to something you CAN do something about, and let go of the results. Being a consultant definitely takes more organizational skills (or a high enough hourly rate to outsource the details), but three years in I wouldnt say I WORRY about any of it. Of course, I support IT infrastructure for small businesses, which means there will always be as much work as I want to do. If youre a more narrowly defined consultant who specializes in something there probably is more stress and worry. Hopefully, you've set your labor rates accordingly.

Sterling chip Camden
Sterling chip Camden

It shouldn't be a "bodyshop" -- we're talking consulting, not contract programming.

Sterling chip Camden
Sterling chip Camden

... isn't about things you know you can change or things you know you can't -- it's about the uncertainty of whether you're doing everything you can. But I agree, too much worry is counterproductive.

PMPsicle
PMPsicle

Chip, you're presuming the market sees/knows the diffference. In some cases, yes, you can live on giving advice. But in the IS/IT world, customers typically see a problem and look for a solution -- which may involve advice but typically requires effort on someone's part. Which is why the argument between consultant/contractor/who cares won't seem to die. In the eyes of our clients there is seldom any difference. That's also why making the leap to consultant is so difficult. Our marketing needs to identify a problem/solution in our client's eyes (rather than the solution/skill set we see). From your previous comments even you (with your specialized knowledge) spend much of your time in the contract role. Glen Ford, PMP http://www.vproz.ca