Outsourcing

Want to be an IT consultant? The grass isn't greener

Before you switch gears and follow your dream of being a full-time independent tech consultant, try to align your expectations with reality.

I get a lot of questions about how to become a consultant. Most people who ask these questions express uncertainty about how to get started or how to make the transition from full-time employment to full-time consulting. A couple of related thoughts materialize in my mind.

First of all, why do they want to become a consultant? I think there's often a "grass is greener" mentality involved, which is probably the result of a focusing effect: They're concentrating on one or two aspects of their current job that they dislike, and they think that becoming independent would solve all that. Some common examples include:

  • I'm tired of taking orders from the boss. If I could run my own business, then I could do things my way (cue The Chairman).
  • My salary is growing too slowly. I'll never make a lot of money until I go into business for myself.
  • I'm under-appreciated here. If I start taking my own clients, then I'll really shine!

Focusing on the negatives of their current situation leads people to ignore initially all the things about consulting that are harder:

  • Finding new work: Your employer makes sure you have plenty to do, and if they don't, you get paid anyway.
  • Running a business: accounting and taxes, purchasing equipment, business insurance, etc.
  • Paying for your own benefits, if you can even afford them: vacations, health insurance, sick leave, and personal time.

Even the things that you think will be better aren't unmixed blessings:

  • Congratulations--you traded one boss for one or more per client. They don't have to agree with each other on your priorities, and it's a lot easier for them to fire you.
  • You'd better make sure to charge enough, because you won't be able to bill anywhere close to full-time. A lot of consultants end up netting less money than they made as employees.
  • You may get some respect from the title "consultant," but just see how that holds up if you fall short of your clients' expectations.

When someone finally decides to put their dream plan into effect, then their soaring expectations suddenly meet the brick wall of reality. "How do I even begin?" is not an uncommon thought. At this point, fear of the unknown can make all the new things you have to do seem more daunting than they really are. If you break them down into smaller tasks, you'll find that you can be just as good a consultant as the next person. It's pretty simple, really: To succeed, you need to provide a service that people are willing to pay you to perform; everything else is ancillary to that. While certain personality types may be more comfortable with the independence and responsibility of consulting than others, there's nothing about it that you can't learn if you have the desire and patience to stick with it.

In summary, becoming a consultant is not as hard as you think--but it also won't be as rewarding as you might expect. It's a good idea to try to align your expectations with reality before you dive into consulting. On balance, I still prefer the independence consulting provides. Your mileage may vary.

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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...

26 comments
dl_wraith
dl_wraith

earlier in the thread it was said that you have to provide a service people are willing to pay for. A very true point. An additional fact I'd place here is that to sell the service you need to do it where people want it. In the modern era of VPNs, VDI, mobile communications and the multitude of connectivity services spanning the rainbow of 'Teh Interweb' this is perhaps less true than it once was but don't underestimate the power of your location in the selling of your services. I have a good example to illustrate the point. I have a friend who left the world of salaried employment to set up a small business consultancy where he was designing SME networks/server solutions, building them and providing remote support to the businesses after the fact. He was skilled, driven and set himself up in the middle of an area where there were plenty of businesses to target who had no real IT provision as it was. So far, he makes pretty much nothing. The problem he ran into was that people were (on the surface) willing to pay for his services and that he could get plenty of enquirers interested in the services but that these businesses all had a skewed sense of what IT costs (a point made elsewhere in this thread, I believe). The staff in these businesses were so used to free torrent downloads, ignoring licensing, buying retail/home equipment from local electrical stores to run businesses, getting family members to do their IT for next-to-nothing and so on that in their business life they carried the same attitude. So, while this chaps rates for his time were cheap and set for the area he was in, he couldn't succeed as he couldn't licence the solutions he was trying to sell/support. Attempts at open source solutions were batted back (after all, if you had MS products for free already why let someone change your setup so you'd be legal, right?) and attempts to sell a purely support consultancy failed as businesses continues to get their family members in or ask for freebies 'to try out the service'. The few contracts that did work out weren't enough to pay the bills. The real issue was the location of the service. Other acquaintances were reporting that if my friend had set up somewhere else in the UK that he'd have been able to sell himself many times over with no problem. It just happens that the area of the UK he set up in was ex-industrial and had a culture of 'cheap, cheap, cheap' and backhander deals. So, yeah - Sell a service people are willing to pay for and to help you do that, ensure you pick the right location to sell yourself. The culture and expectations of your potential customers can do a lot for your earnings potential. EDIT: My friend is now contracting for bigger, national companies with a different culture and attitude. he's cast his net wider now and found employ as a result. I suppose a secondary point to this story would be 'be prepared to travel.....a lot!'. If he's reading, good luck to you!

RW17
RW17

I always find these articles / blogs to be way too high-level and general. It makes me think of people who write horoscopes... "write in a way that applies to everyone, easily associatable within own minds, all the time and you will not be critiqued". Let's have some specifics! Let's have some cojones in today's written word! You won't make some people happy... but you will make the right people actually be interested and learn! Wanna be a consultant? - Expect to be critiqued... heavily! Your evaluators will like your style in one place and dislike your style in another... as it is doubtful you are a chameleon, grow a crocodiles thick skin or be consumed! - What worked for you in one place will not work for you in another! This is another "you aren't a chameleon" comment... but more oriented towards your deliverables here. Try to push what you did previously is as likely to get you booted as patted on the back! Don't force your past client's solution on your new client! - You are evaluated not on what you get paid... but on how much you bill! You're expensive! Really expensive! That smoke break you just took cost the client $50! Expect to be viewed through these glasses! - So many "freshers", as they appear to be called out of India, think that Information Consulting is a licence to print money! You can make a good living, but your likely not getting that yacht without submitting to bagged lunches! Also, you must bust your hump to actually get to a level where the earnings are half-decent! Simply showing up to the client's office and not putting in the hours... I see too much of this behaviour! - Expect to put in the hours of a significant lawyer... but get paid far less... and get far less respect in your private life based on your occupation! Tell a bank you are a lawyer, and you get their best rate. Tell your bank you are an independant IT Consultant (or even one working for the big firms) and expect to have to show statements of earnings for several consistent years before they will even talk to you! - "Oh... you have seen so much of the world!" I have indeed been to many places, and I have been fortunate to take a little extra time outside of work contracts to explore. However, when I am "on a client" in a foreign country, or even foreign city, one thing has always been proven true: An office in Toronto, an office in New York, an office in Calgary, or in Vancouver, Quebec City, Philly, Denver, London, Chicago, Buenos Aires, Seoul, Auckland, Sydney... they all look the same! Traveling for work does not equate to traveling for fun! - You are a traveling consultant and even if you do work for a Consulting Firm, you will have no relationship of investment with your boss! Yup... they don't have to see you! They don't get to know you! If you are independent, your client boss has a much easier time firing you! If you work for a consulting firm... your boss at the firm will not have a personal relationship with you on which to inhibit such dismissals either! - You're a consultant... you are ONLY as good as your last mistake at a client! Reality doesn't matter much... perception does! Do 50 things right, and no one hears of you! Do one thing wrong at a client and you will face hell trying to scrub off that tarnish! Now... being a consultant is not terrible... even if I outline reasons above that make it look like it is terrible. My points above were intended to be a "tell no bull" train of thought around "the grass is not greener..." Caveat Venditor, my friends! Caveat Venditor!

reisen55
reisen55

In corporate It, my life consisted of knowing one monsterous network very very well indeed, and that represents the sum total of your knowledge and experience base. When you are an independent consultant, you have to know alot about a whole collection of very different networks and gather such knowledge up very quickly. IBM used to call it drinking from a firehose and it is very true. The gain in knowledge and experience, however, adds considerably to your skill set so that as you enter into working behind more and more networks and customers, your ability to use this increased set of tools and brain cells increases your abilityto move, yet again, into different networks. At Aon, I was a lotus notes guru and knew very little about exchange and outlook. Well, that has changed considerably. We had a data center FAR away from us in Manhattan. Now, I have constructed and migrated entire domains and networks in a weekend and found software tools to do so most effectively. The sum total of your information tech handbag and brain set undergoes a very radical change. Sometimes I may miss old Notes but not often these days. The downside is paychecks. I have no control over that, and the lack of receiving one every two weeks is a terror beyond belief sometimes. My wife still does not understand that. Most of my clients pay very well indeed and a few are a real PITA. Look that one up. But cash flow goes out the window sometimes. Some months are good, others are slack. BUT if you get enough clients, business AND individual home accounts, eventually ENOUGH problems and projects will kick in to give you a consistent income and THAT is the trick. You have to have a basket full of projects whether corporate or home based. Corp are better. But a goodly selection and you can bless old Microsoft forever thereafter for screwing things and providing you a bountiful income and mental challenges

osgcurt
osgcurt

At least I can be truthful with clients and potential clients. It's great to be wanted, and you can choose not to work for someone. Some clients are just impossible to work with and thats reason that they need you, but then they impede your help. If you are "engaged" in the client, then they want you available. Even better if you have your affairs set up to deal with emergencies. But true enough is the fear of over charging for certain markets. Not getting paid, is really bad. But dealing with it firmly and graciously gets you a good name which is better than gold. You can't be a push over and be a consultant. You must spend some of your time making sure people know you and know your "Street Creds". It's REALLY hard being your own boss but in the end you will find out what your made of and enter the biggest room in the world. The room for improvement.

logos200
logos200

This field has changed and continues to change at an astounding rate. There is too much going on and on top of that, there is no standardization so every company uses different technologies and versions of technologies. Additionally, they [the client] expect you to be an expert in their domain, whether it's homeowners insurance, widgets, pharma, chemistry, medicine, finance, etc. You cannot be all things to all people and the headache is not worth it. This is why if you were to go on your own, you cannot specialize in one niche and expect to be gainfully employed the entire time, unlike some other fields where specialization and even sub-specialization is highly lucrative. For example, you have lawyers who deal exclusively with elder law and doctors who deal with reproductive issues for women who have fertility issues. These professionals learn their subject matter one time and people utilize their services because their is a perpetual need. IT is a business expense carefully scrutinized by militant corporate bean counters. Basically, you are an interchangeable cog in the wheel. In closing, work for someone else and if you don't like the shop/manager/whatever, go find another job. The end.

dba88
dba88

I definitely agree with Glenn's comments! Going independent is not for the feint of heart! It's hard work. In my case, it's difficult to get the next project and you can liken it to looking for a new job after each project engagement has ended. Even if you are proactive and have learned these lessons in the past, and begin your marketing / search efforts well in advance, there are no guarantees that you'll have a new project for many weeks or months!! You'll be interviewing right along with others that can do what you can do. The competition, your interviewing skills, your ability to network, and several other key factors will play an important role in your success and the speed with which you can get a new project engagement. Another major nuisance is that there are some very crappy recruiters out there looking for contractors!!!! But there are some very good ones, too, that are honest and forthright! You must remember, their clients are companies... not you!! There are a few project managers and program managers that are trying to reverse that thinking with recruiters, because these roles, in particular, can help recruiters put many more contract consultants onto a project. This is especially helpful when the project manager has worked with certain specialties on prior engagements and know how the team can work together. Recruiters don't want to hear this. They want the low(er) hanging fruit, so they'll laugh this idea off. Their loss. Before you take the plunge, know the risks!!

sysdev
sysdev

First - all of the items mentioned are true and more. I have been in this business for 47 years and have been on the consulting side since 1976 (36 years). Until the turn of this century and a little bit past that, what was written was all you had to deal with most of the time. Yes there were clients that made life 'unpleasant', but mostly clients were quite pleased that you helped to solve their problems and helped to train their staff to things a better way. Until 2001, the only 'gaps' I had were ones that I picked myself. More often than not, as I was finishing one project I had 2 or 3 others that had requested my help. I made money - much more than if I had stayed an employee. I wasn't leaving a bad situation, I was going to a better situation. I learned from each of my consulting engagements. I dealt with people from a junior programmer to several CEOs and very few people were nasty because I was an 'outsider'. The whole world of data processing consulting is different now and If I had to make the decision today, I would not consider going into consulting. I get offers every week at rates that I wouldn't have accepted 30 years ago. There are a lot of things that are broken now and the best I can say is that I worked hard, traveled a bit more than I wanted, made a lot of money, and can retire with the knowledge that I helped a lot of people, and that I helped a lot of companies. If you are contemplating becoming a consultant now, I would recommend that you seriously reconsider and if you decide to do it, be prepared for hell.

Dr_Zinj
Dr_Zinj

"It’s pretty simple, really: To succeed, you need to provide a service that people are willing to pay you to perform." Man, that is soooo true. Biggest reason I've not quit my job to work for myself - none of my revenue projections equal what I'm making working for someone else yet.

PMPsicle
PMPsicle

I have to agree with everything said so far. 1. You're going to work for the worst boss you could ever have 2. You're going to switch one boss for many 3. Your earnings won't be nearly as high as you think they will 4. You aren't going to be appreciated any more than you were 5. You are going to have to do things you don't want to do Add to that my own comments: 1. Ignorance is endemic: a) Interviewers who don't know the difference between employees and contractors (and ask inappropriate questions). b) Clients who don't know how to properly calculate an hourly employee's rate and a contractor's rate. c) Clients who don't know the difference between employees and contractors (and try to impose inappropriate controls). d) Clients (and others) who don't realize that you can do more than one thing. e) Clients (and others) who don't understand the work that you do and misjudge the effort/skill involved (especially when you do something just left of centre). 2. An inefficient market (meaning rates are not generally known) 3. Having to do things you don't like and aren't good at 4. Changing your mindset from working in the business to working on the business 5. Constantly interacting with the hiring process (and all it's weak points) 6. Being on the cutting edge of the economic cycles And I'm sure I could come up with even more. Having said all that, I like being in business for myself. Glen Ford http://www.vproz.ca

robinfgoldsmith
robinfgoldsmith

After 30 years in my own company (they do call it a 'practice' after all), I still work for an idiot jerk--but one I much prefer the idiot jerks I worked for in other companies.

Charles Bundy
Charles Bundy

Not only am I my own worst boss, it's hard for me to charge appropriately for services rendered.

Sterling chip Camden
Sterling chip Camden

... has a lot of factors. One of those is the culture of your location. Another is the state of the economy, and whether clients think it's a good time to be investing in their businesses or battening down the hatches to weather the storm.

techrepublic
techrepublic

Or as an old agent of mine always said: "One aw$hit wipes out ten attaboys!"

techrepublic
techrepublic

I have been "Consultant" or, more properly, an "Independent Contractor" since 1988. I always had work off and on until 9/11 and then... The bottom dropped out. Even all the agencies I used to do business with are out of business. Just recently things seem to be opening up a bit. My advice: avoid consulting until the economy firms up to pre-9/11 levels. P.S. Some loose definitions: Consultant - get paid for what you know. Contractor - Get paid for what you do.

PMPsicle
PMPsicle

And here I thought it was just me! :D (I've also noticed that trend ... including the trend to try to pay the same rates as 1980).

JohnMcGrew
JohnMcGrew

...that most people don't get. They haven't a clue how much those "intangibles" that employers provide (insurance, vacation time, taxes, etc) really cost. When I started out on my own, most of my friends assumed I was "rich" because my hourly rate was two to three times what most of them were making. They didn't appreciated that out of that rate has to come everything that they get, but never see on their paycheck.

Sterling chip Camden
Sterling chip Camden

It's amazing how many people lose sight of it. The next step is to figure out ways to alter some of its components so that it does work out.

JohnMcGrew
JohnMcGrew

I have many clients who highly appreciate me, and frequently tell me so. These people know the value I add, and they know I am always watching their back. It's a good feeling.

Sterling chip Camden
Sterling chip Camden

Consultants generally undervalue themselves, and if they ever figure out what they should really charge, it takes their breath away.

HAL 9000
HAL 9000

Easy answer is [b]Tennis Players[/b] seems that they love playing on Grass and they don't seem to be tested for it either. ;) But on a more serious Note the very first thing that anyone contemplating working for them self needs to do is draw up a Business Plan and understand it. They should then make numerous visits back tot hat Plan and study it again and again. OH and I totally disagree with your Statement that you'll be swapping a Boss you don't like and be the Chairman, the reality is that you'll be working for a much worse boss that you'll ever find in Business as you know what you can and can not do and what you need to do to make money successfully. Becoming a consultant not only means not having any form of regular income but also doing all those things that you hate to continue to get what income you can nearly survive on let alone prosper. After doing Consulting for 20 years or so your expectations have changed so dramatically that you're ecstatic with so much less than when you where working for a Boss who paid you instead of a Boss who knows every time you are Goofing Off. Col

info
info

The problem is that it also takes away the breath of the customers. Even the rich ones figure they can toss a teenager a $20, and they should be able to fix ANY tech-related problem they're having. Sometimes, even if you do an awesome job, they never call you again because they had to pay what it was worth. I used to do work 'with' a millionaire 'on the side'. He'd opened up his own shop years previous, but a 'friend's' company ran up a big bill and bankrupted it. "Hey, business is business," said the 'friend', which taught me NEVER to go into business for myself. Seen too many people get shafted. Back on track, I only charged $15 an hour, give or take, because there were some perks to be had as well. One day he didn't agree with the way I was doing something and we had a falling out. Since we were also friends, I'd been doing it more as a favour to him anyway, so no big loss to me. Weeks later, he called up saying one of his millionaire friends, that I'd helped out before, needed something done. Since we were no longer 'speaking', he asked me how much I would charge professionally. When I said, "$150 for me to show up, and $100 an hour after that," I could hear him choke on the phone. I think he called around to other people and didn't get any joy, because he quickly got me back on 'speaking' terms shortly afterwards... ;)

HAL 9000
HAL 9000

Cheap Work never gets you any friends. They feel that you haven't done them a favor as they paid for the job so they insist that you drop everything and fix the mess that they have made after you left. I found a long time ago you either did it free or under some sort of Barter Arraignment or you should charge the Full Amount as the going rate. That way when they ring up complaining that you broke their computer when you looked at it 6 months ago you should fix it now for free. After all they paid for the repair and can not now use the thing. ;) Strange thing is that any Full Paying Customer who has a failure has never attempted to jump on me demanding a free fix even when the system has not run for 2 days after the repair. [b]The sad thing is that any Cut Rate Repair never acts that way so I came to the conclusion you either charge the Full Rate or do it free.[/b] At least you have some money in your pocket when they want things fixed free or something else to show for your time and Effort. Col

mdavis
mdavis

1. MIllionaires got that way by being frugal so the fact that someone is a millionaire (assuming they EARNED their way to being a millionaire) doesnt necessarily equate to larger dollars/hour in billables. 2. Working for friends for money almost always turns out bad. I have a little matrix of sorts that has served me quite well. Everyone is lumped into one of three categories based upon their status to me. A - Personal friends and family B - Professional friends/acquiantences C - Clients/Customers A = Free work or work for beer on MY schedule / free time B = Barter for professional services. 2 hours of my billable time for 2 hours of their billable time (lawyer/doctor/mechanic/etc...) and they pay cost for parts. Cost means they either supply the parts I tell them they need or they buy them from me at what I paid for them plus gas/time to go shopping for them. C = Regular clients/customers pay a retainer plus hourly rate and a modest upcharge on parts equipment. If I have a "Friend or family member" that cannot wait for my timetable then they get moved to the B or C category, depending on if they have anything I want, professionally. Has worked pretty good for me so far. I have had neighbors who are attorneys who believe they are close enough to be part of group A, balk at me when I suggest a swap of my time for their time. I then ask them why that is a preposterous idea and they say "well I went to school and spent a lot of time studying and passing exams and as a professional my time is worth more money". I then tell them that I went to school, have a bachelor's and a masters degree (just like they do), have spent years learning my profession, just like they have, have paid for, studied for and sat for certification exams validating my professional credentials, just like they have, so... why is my time less valuable than theirs? 9/10 times this has been met with an "Oh well I guess I never though about it that way" and I end up making a deal under terms B.