Ask HN: Lined up clients, gave 2 weeks, offered double salary | Hacker News Reader

Ask HN: Lined up clients, gave 2 weeks, offered double salary

20 pointscorpshackles23 comments

I got myself into a predicament, I've been with my current employer just shy of 2 years, and have strongly felt undervalued the last ~10 months. I make just over 6-figures at my w2 and lined up 2 clients to effectively bump my take home to $150k.

I gave my employer my two weeks, and their first counter was a supposed title/salary bump I was apparently due for, still less than what I'd lined up. I respectfully declined. Now I'm staring down a counter-offer that's near double my current salary and worth almost $50k more than what my contracts will pay..

I know counters should really never be accepted, but even if only for 3 months, it's a lot of money. I certainly feel I've contributed enough to command the salary, and can always pickup more clients.

Which bridge do I burn?

Doing my own thing is enticing, but cash is cash is cash.

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When evaluating a consulting pipeline, the expected revenue is the ideal revenue discounted for projects that don't happen, for projects that start but are abandoned, for clients that don't pay by design or economic changes, for projects that get delayed, for projects that get stalled, for projects that go to someone else, and so on.

If the target revenue is $100k/year, then the dollar value in the pipeline must be some multiple of that...probably at least three or four and often five or ten or more depending on competition, economics, client business models, client corporate structure and many other factors outside the consultant's control.

A potential client is not a client. A client is an organization with a signed contract and checks that don't bounce. Asking for a retainer to start the work is one way to separate clients from potential clients.

One last thing, a consultant is not their own boss. A consultant has at least as many bosses as they have client's and there's no hierarchy. None of them care what the other said or needs or wants when it comes to bossing you around.

Good luck.

Since you have 2 clients lined up, I assume you are working direct and not through an agency. If you are in the US, $150K 1099 will probably end up being less than $100K W2 (working for an employer) situation.

Here’s some data points:

1099 status means you pay all of the SS/FICA (~15%) deduction instead of half you pay as an employee.

Health insurance costs are insane and are getting worse. My health insurance is going from $800/mo to $1600/mo next month for 2 people. My bottom of the line health insurance will have ~$10K deductible next year if I keep the same plan. If your wife/husband has health insurance through work, the situation is a lot easier.

You can only charge for work you do for the client. Printer died? You can’t charge for the time it takes going to OfficeMax and getting another. I work about 5 billable hours a day. You will get paid for a lot less hours than you spend in the office. Don’t make the mistake of thinking you will get paid for 2000 hours a year.

When the contract ends you stop getting paid until you line up another gig. Being a “man of leisure” as I call it, can cut into you income a lot. Contracting involves assuming lots of risk and you need to charge for assuming that risk.

I am absolutely not trying to scare you out of contracting but you do probably need to recalibrate your costs and bill accordingly. You should bill at least $100/hr.

As for the “not having a boss” thing; it depends on your attitude. Like a lawyer, I provide a service to my clients. I dont think a lawyer feels like his clients are his bosses and I don’t either. It’s an attitude thing. Picking good clients is a good skill to develop. Raise your prices and you’ll get better clients.

Can you hire someone to handle the client work? If so, use part of or all of the salary increase to cover payroll. Stay in your job, do well in the role to be fair to your existing employer but get 4 more clients. Then when you’re at 6 clients, leave. Treat the salary increase as your seed capital to build a business.

As a rule of thumb, consulting work needs to pay twice as much as a salaried job. Salaried jobs include benefits and you typically have an hour of unpaid work for every hour of paid work when you go it alone.

So, your clients need to be paying you $400k to be worth as much as a $200k salaried position.

If they can double that kind of salary that easily there's something off. Assuming you're not the world's worst negotiator, why couldn't they afford to pay you more before? $100k is a lot of money. Doubling that without so much as a thought seems pretty frivolous to me but it doesn't necessarily mean they suddenly value your work more.

If you take their offer in the best case the deal will amount to golden handcuffs. Worst case, they'll try to extract all the domain-specific knowledge you have and you'll be let go on the next possible occasion.

Assuming your prospective consulting / contracting deals are more or less certain then you have a fairly safe platform to start a consulting business from. You'll have revenue right from the start, distributed among 2 clients, which significantly reduces your risk. Most importantly, with 2 clients lining up you already have the promising foundations for a potentially prosperous network, which arguably is worth a lot more than the money alone.

If you deliver high quality results and continue to expand your network and market your business $150k certainly isn't the ceiling for what you can achieve with a consulting business (while $200k in your current job might be).

Finally, depending on your location and on how close-knit your particular industry is burning bridges with those 2 clients might very well mean you'll have a much harder time starting your own consulting business later on.

Oh, and doing something for the money alone, particularly something shady like accepting and then moving on after 3 months anyway, is never a good idea.

If you decide to turn down the new job(s), you could ask them if they will top the counteroffer. If they don't, well, you were going to turn them down anyway.

Then: are you happy where you are? Will you be happy continuing in the same setting and in the same role doing the same tasks? (I would at my current position, as I still have too many ideas left to try.) Or is it a good time for a change in your environment and maybe see and learn something new and fresh? (I was in such a position before, and I didn't realize at the time that this was the case, so my changing jobs was just a lucky choice.)

One more thing. Do you earn enough for you not to care about finances? It won't be long before you forget about how much you bring home, but if you choose the job that's not satisfying, you'll feel it every day.

I'm content where I am. I earn enough now to generally not have to worry about ordinary day to day expenses. But I've got young kids, college funds to grow, and a future I'm planning for.

I see myself going at it alone eventually, but the safety of a job, even if only short-term, is comforting.

Take the counter, keep the contracts, and find a sub contractor. I’m available for some (full stack java) work, email in profile.

At > 200k a year you'll be able to send two kids to college.

Esp if you are spending at a little over 100k

Leave. You'll line up lots more clients, and if they want you badly, they can hire you back, as a consultant, at your given rate, on your time schedule.

Agreed. But I'm thinking in terms of hours worked. It's easy to find another $100k/yr job or more clients that will do $75/hr.

But does that mean more hours worked in a day? I don't think I can charge significantly more hourly and find clients as easily. I see that as equally challenging if not impossible as finding another $200k/yr job.

It's morally good to fulfil promises - why not do contracting for these two clients - see how you like it, after a while figure out if you want to and can find a way expand the business, or find another w2? You could tell your current employer you promised these guys, so you want to do it for a while, and ask if the $200k can be delayed 6 months? You can ask your employer - Surely they aren't wanting to pay you money to break people's trust?

Do both. Hire cheaper devs than yourself from Upwork or the likes to help build out the contract work. Execute and collect!

What do you mean by "lined up" the two clients?

I mean, do these people expect you to start working for them (because you made them believe that somehow)?

If this is the case, I don't see how you can tell them "Hmmm, sorry, I changed my mind, I am not going to leave my current employment anymore." and get away with it.

Still supposing that the two clients (wishing to give you combined 150K per year) are in the industry, most probably in an executive role.

On the other hand, putting for a moment aside the actual amount of money your current employer offered you, it is a 50% raise, it may happen that they somehow undervalued by accident your contributions, but 50% seems a bit too much to be an oversight.

Such a huge difference would undermine the (IMHO needed) fiduciary relationship with them.

Yep pretty much. I said I was going to burn bridges..

Taking the counter and leaving in 3 months = burning bridges. They expect you to stay for the long haul. However, as stated, they can also hire you back as a consultant. They are doing all of this so they can cover their a with replacing you. If you stay, you may end up being let go later on. Ask yourself if you are staying for the long haul or not. If you are, then the offer might be valid. But don't leave after 3 months.

Find a way to do both! It's how companies get started.

For your clients, do ONLY what YOU have to do and outsource the rest. Maybe all YOU really need to do for them is project management, requirements, UX specs etc... Do you really need to write everything yourself? Implement code review to check on your contractors.

Be the face but you don't have to be the muscle.

Nice work! (Good problem to have.)

How long are the two clients for? (6 months contract? 12 months?) I am wondering if you couldn't do both if you hired a personal assistant to help with things like laundry, shopping, driving, etc. =) (Too bad they can't sleep for you!)

What do you want to do?

If you can, make you current employer your 3rd client. I would not take the counter offer. They didn’t value you before...

y, take the money and keep your day job.

Make sure you have a new contract (or your old one) that allows you to do your own thing on your own time, that being products, a SaaS or consulting.

Consulting is hard work generating 6 figures on your own, even at $75 to $100/hour. So I think you would bank more with less stress at your $200k/yr day job.

Instead of consulting I would plan to do products (info) or SaaS in the future.

Check out Rob Walling's stair step approach.

StartUpsForTheRestOfUs.com

Have you signed anything with the clients? If you have you might want to look into "breach of contract" with a lawyer.

a bad independent contracting agreement could have consequences.

https://www.techrepublic.com/blog/it-consultant/independent-...

OP: What kind of work would you be doing for the new clients?

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