Banking

What's the most challenging part of working as an independent?

Independent consultants face numerous challenges, which includes managing uncertain income, fighting procrastination, and keeping up with technology. Take the poll to let us know what you think is the most challenging aspect of independent consulting.

The folks from Independent.com Inc. posted this question on TechRepublic's Facebook wall:

What's the most challenging part of working as an independent consultant? We feel it's the lack of benefits....thoughts?

Certainly the lack of benefits is a big challenge. At least in the United States, independents must pay exorbitant fees for health insurance, if they can afford it at all. We're also on our own for worker's comp, and nobody else is paying for our vacation/sick/personal leave.

But I'm not so sure that those challenges are the hardest issues we face as independents. Here are a few others that may provide just as much or more of a challenge:

Managing uncertain income. Independents have to keep one eye on their business pipeline at all times, and we have to spend a lot of time developing new business. Nevertheless, even the most savvy consultant will have to deal with the feast or famine syndrome. It takes discipline to manage your funds so that you can get through the lean times. During the fat times, when you have more work than you can do, you still need to dedicate attention to the pipeline so it doesn't suddenly run dry. Balancing multiple clients. When you work for only one company, conflicting priorities can often be resolved by appeal to a higher authority within the company. Whatever's most important for your employer will win. When you have multiple clients, each one of them may have a #1 priority for which you're expected to drop everything. Perhaps even more challenging is when they don't -- then you're tempted to ignore that client to deal with all the squeaky wheels, which might just cost you that nice, quiet client. Fighting procrastination. When you're on your own, you have to be your own motivator. Especially when you have a seemingly overwhelming list of multiple priorities, the dread of deciding which one to attack first can often lead to a few hours of gaming or surfing instead. While it's important to take breaks from time to time, eventually you have to get yourself into the zone on paying work. Balancing work and life. Every hour you're not billing is lost income, but you don't want to give up your life -- otherwise, what's the point of working so hard? It's even easier to get sucked into the 24/7/365 shift when you work from a home office, or you carry your mobile phone with you at all times. Work is always potentially with you, so you have to find ways to turn it off occasionally. Keeping up with technology. When you work for an employer, they'll usually tell you what they want you to learn. When you're an independent, you must anticipate your market. Is this new framework going to take the industry by storm, or will I waste six months becoming an expert in something nobody uses? Getting paid. If you let them, clients will make this into a recurring headache for you. It takes a lot of fortitude to insist on timely payment, and to be willing to take drastic measures to make that policy stick. But not getting paid for work is worse than having no work at all. The good news with this one is that once you've made your point, the clients that you keep probably won't cause you any further trouble. The downside is that you often have to go through the whole exercise afresh for every new client.

By the way, April 14th marked my 20th anniversary as an independent consultant. Despite the challenges, I wouldn't trade it.

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...

35 comments
Steve_Arhancet
Steve_Arhancet

I've worked in the Independent Consulting space for at least 5 years and I'm very familiar with some of the challenges of being independent as well. To the list of challenges above you could add contract negotiation with clients, business insurance and overall asset/personal protection, and building a team to support your business (subcontractors, etc). I actually work for a company that helps independents overcome many of these challenges, and I'd like to offer up my contact info to anyone who is interested in learning a bit more. Here are a few examples of how we help: we handle the invoicing clients, make taxes easier to manage, and offer up several benefits that you can typically only get from traditional employment (401k, group health, etc). Feel free to reach out to me at sarhancet (at) mbopartners.com.

Gabby22
Gabby22

Getting the right balance of work, life, money is the key. Most of these are constants in a salary job but it all changes when you fly the coop. Some examples: # Potentially I can get paid for every hour I'm awake. This is very different from deciding to do some work at home or work a few extra hours so that I get my work done, for no extra payment. The downside is that it's easy to feel guilty when I'm not working. # I can work whenever I want (mostly). This is great and means I can go fishing or shopping mid-week. The downside is that working this in with the family can be tricky. Luckily my wife and kids tended to work shifts, so this was mostly OK. # At first I had no real idea about how much I was earning or how this was offset against benefits. My first work slump was about 14 months after I started and it really scared me. After looking at my books I decided I could take a couple of months off if I needed to, so I started working on those things I'd never got around to, like archiving. I look forward to slumps now. # My biggest ongoing problem is inherent in the type of work I do - the workload is never even - floods and famines are part of the game. I sometimes think my clients are conspiring together to achieve this. I know several people who have given up this life even tho they had plenty of work - they just can't handle the uncertainty. Not me - I love it.

vhutton
vhutton

Hi All: I've attempted to start a new discussion, but that page appears to be broken so I'm commenting on this one because it looks like a good one with a lot of pro's joining in. I am doing a marketing paper on Staples technology solutions and would love to get some insider IT perspective on what you all think of their service, how they market, what they are doing right or what they are doing wrong or even if you had no idea Staples offered these services. http://www.itliberated.com/#/about/ Thank you! Virginia

biancaluna
biancaluna

I've been with a very steady stream of work for a long time, in fact, I have to knock things back and turn clients down. I have health, income, trauma and professional insurances and pay some outsourcer to do my paperwork, taxes and insurances. I've made some choices early in my career to level the feast and famine phenomenon and also add a lot of money in my retirement fund. That is paying off dividents now with a really healthy buffer in the bank and investment properties for later. I see some indies who do not do anything about financial independence :) or a safety net as they think it is too complex or it won't happen to them. It does. I've had a serious health issue that required surgery and a few years of treatment after and it does happen to you. We are very lucky that our health care system is still somewhat affordable. I have had to convince the insurance company as an independent, and it was tough for me to get insurance in the first place as I am a diver, the way I resolved that is to package up some of my finances and that made it easer for my financial advisor at my bank to drive it through - make a sale, buddy. And he did. Priorities and balancing work/life are my major issues. But there is something more at play in the latter- I find it a real challenge to marry my personal values with some of the clients that want my services. Some of the industries that have engaged me are just not aligned to my sense of integrity, like the defence industry or Government agencies that waste taxpayers money on ego and lack of process and service mindset. I am really struggling with that, yeah, I can make a lot of money, but I can't do it. Somewhat of an interesting place to be, maybe my old hippy heart is to blame and I am just getting old. Continual education is a time management issue for me, most of those costs are tax deductable in Australia and it is a matter of understanding what adds most value to my worth in the market and my clients. It is a factor whether you are an employee or an independent. Procrastination. Yup. McGrew has it spot on, why am I writing such a long response. But it is more than that - perfectionism plays a part in my reasons for procras part 10,000. And some of it has to do with mental burnout, as consultants our brains are engaged all of the time, at least mine is. I suffer from mental fatigue from time to time and it makes me want to do things like listen to music or surf or social network instead of writing that applications value matrix. Boooring.

wfreeman
wfreeman

I voted for "Lack of Benefits" because I believe it's as much a cause of Uncertain Income as any other factors. Even as a software developer with mostly-US customers, I'm still indirectly competing internationally, against developers who either live in a country whose government actually cares about its citizens, or the cost of health care is so low as to not be a factor. The cost of health insurance in this country is a disgrace and at the same time the costs of health care have the potential to bankrupt anybody, even the insured, at any time. This one factor alone increases the costs of doing business in the USA well beyond the competition's in Europe and Asia.

dmckay2
dmckay2

You are always chasing the next project or money from the last project. However, you will NEVER be unemployed!

loren.saunders
loren.saunders

Benefits can be bought. That's by far not the most challenging item... I would say it's: uncertain income priorities maintenance and discipline keeping the pipeline full

JohnMcGrew
JohnMcGrew

Like the wife that just screamed because of something the dishwasher was doing. When I first started out, most of my friends (many who were still in school) would call all the time assuming I was available to go do things because I was self-employed, and therefore available 24/7 to do things other than work. It's great to be able to take an afternoon off to go sailing, but that's got to be made up in some evening or weekend too. As for the issues listed above: Lack of benefits: "Benefits" are simply forms of income that "normal" employees get paid in lieu of money. As an independent, you simply must make the mental transition to understanding that you are responsible for your own benefits. When I started out, everyone thought I was "rich" because I was billing out over 2x what I might have been making as an "employee". What they (and most people) don't understand is that their real "wage" is 50% or more greater than what they actually "take home". Out of that "gross" amount we collect, we must pay all of our Social Security & Medicare taxes, health insurance, retirement savings, etc out of that money. Also, there's no "paid vacation" for you either, so that's got to be built-in too. Uncertain income: As I once told another TR member here, "December is on the calendar, so it shouldn't come as a surprise". If you're not making enough to cover the nut during the busy months, you will not survive the lean. And like the experience one member described above, it's not just the "lean" months you have to worry about, but the truly unexpected. You either need disability insurance and/or a 6 to 9 month emergency fund. (Even if you're a "regular" wage-earner, you should have that anyway) Multiple priorities: This is both a problem, and a good thing. It's dangerous to be dependent upon a single or too few clients. A few years ago, I lost a major client representing about 1/3rd of my billables when they got bought out by a bigger fish with their own IT department. Fortunately for me, this was both not unexpected. I had other solid clients wishing bigger chunks of my time, and it opened me up to exploring other opportunities. But if this had been my single client, this transition would have been quite stressful and difficult. Procrastination: Why do you think I am writing this long post instead of working? Work/life balance: I've felt I've always done pretty well with this. My wife accepts my working evenings and some weekends as a fair trade for being able to do things during weekdays. Skills maintenance: Something you have to do no matter what business you are in. The first couple of hours of my day are usually spent reading up on what's new and relevant to my client's existences. Collections: Have been relatively lucky in this regard. In over 25 years, have only had to actually "go legal" twice. Most of the clients I have had know better than to screw with their IT person...

reisen55
reisen55

Having served seven years in the corporate world, and 4 as an independent, I have vastly increased my skill set beyond the nominal, small, world of corporate dictates. My previous employer, Aon, was a Lotus Notes shop and never EVER touched Exchange. Outside of Aon, I have dealt with Notes, Exchange, GroupWise and performed a vast range of tasks I NEVER had the freedom to do in corp. But that is a challenge too, when I pick up a new account (a very local law firm this week), there is always the NEW stuff to learn and be responsible for. That is a very hard part of the job, learning how a client's network functions and how everything works. Usually, too, badly as the last consultant is (obviously) no longer there for a good reason!!!!

hermeszdata
hermeszdata

This is indeed a very interesting question! I have experienced the ins, out's , ups and downs since becoming an Independent in June 1999. I learned very quickly how to economize and set aside money to carry me through the slower period (November to March). 911, ups and downs in the economy (companies not upgrading infrastructure), changes in business thrust by companies (moving away from the mom and pop operations, who have always been the core of our country's economic structure, to companies that have hundreds of sub-contractors) trying to minimize their efforts, the reduction in offered compensation for services rendered, to out-sourcing services overseas are all things many of us have had to deal with! The most difficult aspect of being an Independent is balancing the Work/Life relationship, especially when my spouse is my partner in business. It takes time to research and write proposals/contracts when a new prospective client come up. Operating as a one man shop as I do requires taking on these tasks when not working paid assignments, most often after normal business hours, giving up vacations, holidays, and such. Being self employed takes its toll physically, emotionally and socially. Yet I, like others, would not trade what I do for anything else. The introduction text to this pole mentioned the expenses involved in being an independent, insurance being one of the major expenses. Any prudent self employed individual should at a minimum carry General Liability and Workman's Compensation coverage in case of an unexpected event while on the job. Unfortunately, as I recently found out regarding Worker's Comp, the self employed often have to fight harder to receive the benefits they had been paying for if injured than they did to earn the money to be able to pay the insurance premiums! Almost seventeen months ago (4 December 2009), while en route to a customer's site over an hour from my office, I had the unfortunate experience of having an uninsured driver turn left in front of me without yielding resulting in a totaled vehicle (45MPH impact) and being transported to the emergency room. I filed the legitimate claim over a week after the accident when the doctors placed me on a no work status for an additional two weeks between visits. My carrier, one of the most well know in the US, denied the claim. I needed to hire an attorney to fight them and they finally admitted liability six months later just before we were scheduled to appear at an administrative court hearing. Since their admission of liability we have had to fight their continued denials of recommended treatment (because the "injuries happened X months ago") and are fighting to this date. The neck, back and head injuries have limited my abilities to 5% capacity of my pre accident abilities in work and due to the delays/denials of treatment I will end with a substantial permanent impairment/disability. Being self employed definitely has its benefits ... and risks, and as I stated earlier, the prudent will do everything they can to mitigate those risks. Unfortunately, prudence is sometime insufficient. If I had been an employee of a company verses a sole proprietor/one man shop, I would have received the necessary treatment and been back to full duty in just a few months. Instead, I, my family, and my business have been made to suffer un-imaginable hardship. This practice by the insurance companies seems more the rule than the exception regarding the self employed. But, when all is said and done ... I would still rather be self employed!

santeewelding
santeewelding

I could fly in here and wrap it all up for you with my experience of independence. But, I can't. It's still new every day.

AnsuGisalas
AnsuGisalas

I ball up the whole administrative part of running a business into that one (Yeah, I'm mean!). All the forms, report deadlines, book-keeping for VAT, etc. I'm not scared of many things, but that pile of official papers on the corner of my desk has a way of turning my attention away from it, if you know what I mean...

HAL 9000
HAL 9000

To be an issue at the beginning. After you have been in business for a while there is income all of the time, and while not as much as I personally would like [i]as if that will ever happen[/i] I've found that I'm torn in several different directions at the same time being the most problematic. But then again I have staff so maybe I'm in a different position. Col

mike
mike

You have the meanest slave driver in the world for a boss and the laziest person in the world for an employee.

Sterling chip Camden
Sterling chip Camden

... we have 42 votes. Although "Uncertain income" is currently leading, none of the categories has anywhere near a majority of the votes. Does that mean that different people find different aspects of consulting more challenging, or that most people had trouble deciding which one to choose? Probably a mix.

nwnick
nwnick

Never Heard of them, Guess that's your answer to their marketing.

Sterling chip Camden
Sterling chip Camden

No matter how much they're willing to pay you, you'd always regret taking it. You'll never regret leaving it behind if you feel that it's wrong for you.

JohnMcGrew
JohnMcGrew

It's simply not possible to have brains that "are engaged all of the time". There are days where I can't write a coherent line of code to save my life; if you're head isn't into it, it's not going to happen, or at at best not happen well. It is frequently helpful to allow distractions to divert you for periods of time, and allow you to "reset" to a mode where you can be focused and efficient. The problem is when the "distraction" overwhelms any possibility of being "focused and efficient" later on...

Sterling chip Camden
Sterling chip Camden

I have health insurance, but no prescription coverage. We recently had to change one of our prescriptions for economic reasons: it cost over $900 for a one-month supply. Luckily, a similar medication was available in a generic for about $7/month. Thank you, US patent law. Of course, if we had had Rx coverage, then Pfizer just would have screwed over the insurance company -- which gets turned around to consumers in the form of higher insurance rates. Don't let anyone tell you that that's free-market capitalism at work -- it isn't: it's a government-sponsored socialist protection racket.

Sterling chip Camden
Sterling chip Camden

Yeah, that's a good one. You never have to dread being called into the office for "the talk". Independence scales to the economy, instead of being on/off. Of course, you have to make sure that when it scales down you can still survive on it.

Sterling chip Camden
Sterling chip Camden

My wife assumes that I'm available all the time for any interruption. And if I try to lay down the law, she'll remind me about the one time she walked in to find me procrastinating in front of a computer game. "You have time for backgammon, but you don't have time for me." Just try to explain your way out of that one.

Sterling chip Camden
Sterling chip Camden

Always something new, isn't it? That keeps it from becoming a bore, but always a challenge.

reisen55
reisen55

I did not have an accident per-se, but in May of 2010 I developed a breathing issue (bad, climbing ten steps put me out of commission) and into a hospital for six days, which equalled corporated death for six days. My wife, when she came to visit, asked (not thinking) " well,did you get any invoices?" (WHAT CAN I DO FROM HERE?) So it goes. Actually, once I had my wireless laptop, I WAS able to do remote work for my clients which was great as it put me back into a normal world as opposed to the abnormal hospital world. Also downloaded from my home network THE GREAT RACE (1965) so I had MOVIE NIGHTS too. So condolences on your medical issues - been there, done that.

Sterling chip Camden
Sterling chip Camden

Sorry to hear about your misfortune. Insurance is a racket by any measure, yet it's risky to go without it.

Sterling chip Camden
Sterling chip Camden

Good point. Fortunately, red tape seems to be one of those things that I can figure out how to systematize.

AnsuGisalas
AnsuGisalas

Just a couple of months ago income was spotty at best, but now it seems I've got enough clients to keep up a pretty steady flow of income. Of course, since my work is more mercenary, I also have to battle my own greed. When I look at the contracts available I can't help but think like the Pokemon motto; gotta catch em all!

Gabby22
Gabby22

It's interesting to see what stresses us and what doesn't. These days I'd say 99% of my work is stress-free. I work for 2-3 clients in very trusting relationships, with time-based charging. Most of the work is business analysis, report development, DB queries, change requirements and coding. Hard deadlines are rare, as are crises. In fact, I look forward to the occasional crisis just to get the adrenalin flowing again. I think of myself as semi-retired now, with only about 30 hours a week (some more, some less) and I don't chase work. I've shucked several clients who I decided I didn't need. I refuse anything that sounds like 'on-call'. I avoid installations and major configuration changes the night before I go fishing (learnt the hard way). I actually had a couple of years off about 10 years ago when I retired from a higher existence as a software/systems engineering consultant (in defence/aerospace) which *was* stressful. I got bored, so I took on this stuff instead. I found out something very interesting (at least to me): I'm over 60 now, and the main reason I work is that I want to be *useful* to someone - the money's nice too, but not essential. From your 50s, you become less and less relevant in the world. My work is one way to fight back.

biancaluna
biancaluna

Exactly right, Chip. To thine own self be true... or something like that. I had a discussion with a fellow consultant the other day, who got out of the indie business for a while as her clients were starting to use her as a private confession service. That happens too, particularly when you work with small businesses for a long time. A few fine lines in our line of work, keeps it interesting and keeps you focussed on values.

biancaluna
biancaluna

John, I agree with you, it merely feels that way. Sometimes by Thursday arvo, I am completely brain dead. I have some hands on recreational activities such as renovating, crafts and sports that get me out of that cerebral mode of operations as I have found that the right brain left brain integration just needs some dirty work. Time out is healthy, I don't call that procrastination :). I also think a decent sense of humor and humility to be vital, when I start to take myself too seriously in consulting mode, I know it is time to sit on a rock for a while and laugh out loud at these social constructs.

Sterling chip Camden
Sterling chip Camden

... is the guilt and frustration that attends it. There's also the "broken window" syndrome: having destroyed my productivity for an hour, why not make it two?

Sterling chip Camden
Sterling chip Camden

That seems to be a common feature of big clients. I don't know whether it's just the amount of red tape and disconnect between the front lines and Accounts Payable, or just company policy to improve cash in hand, but the big boys are often late. A smaller company, who can afford it less, is often more prompt.

hal
hal

...and I still say "Uncertain Income" at the top of the list. I try to commit to a client, even if a contract with more lucrative pay comes along in the middle of my existing one. When I'm between clients, it's hard to negotiate good rates when you're not sure how long you're going to have a dry spell. Second on my list is "Getting paid." Not usually afraid of not getting paid, because my clients tend to be Fortune-1000 companies, but just getting paid within 30 days. One client sometimes dragged their feet for 90 days! (Not to name names, but their initials are I.B.M.). Clients that pay within 10 days of billing are wonderful, and I'm willing to negotiate lower rates for speedy payments. "Fighting Procrastination" is number 3 - it frustrates me that I can be easily distracted ("SQUIRREL!!!"), but I'll work long hours to make up for it and keep the deliverables in my sights. In any event, good list.

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