Comment by lwhalen | Hacker News Reader

Comment by lwhalen | Hacker News Reader

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OP should register himself as an S-Corp, hang out a shingle, and market it as a consultancy. Now the pay triples, your short stay at various companies is downright expected, and everybody's incentives align - OP wants to do the best work he can in the shortest amount of time possible (so he can move on to the _next_ client), and his employers^Wclients will pay more to collect on the value OP's work provides sooner. Ironically, if you start spending more than a year at any given client, future clients will start to get antsy about '...why were you there so long? Are you a foot-dragger? What's the matter with you?" This is why you should NOT do hourly-billing, to make sure everybody's incentives stay aligned as described above. :-)

Difficulty level: stop thinking of yourself as a 'programmer' or an 'engineer', and start thinking of how your programming/engineering work impacts the business' bottom line. See: https://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pr...

tl; dr - humans are weird.

It's a bit more complicated than that.

A) I would do it as an LLC, as it's cheaper, easier to set up and doesn't require a partnership structure.

B) Not every company is looking for a 1099 employee. In fact, I'd wager that most would rather hire W-2 (US) instead.

C) Trying to go the real consulting route will lead to long-ish sales cycles depending on your rate and what you're looking to do. You'll also need to go through procurement at a big enough place; that, in and of itself, can take a while.

D) You're on the hook for health insurance and retirement. Health insurance is expensive.

E) Days off outside of the weekend and federal holidays comes out of your PnL. You can (and should) factor that into your rate, but see (C) for why that might make building a book of business more difficult.

F) You'll need to sell yourself much more than you would as an employee. If you're the type that hates writing/speaking/meetings/selling, then I wouldn't recommend consulting.

LLC/S-Corp/whatever, if you're doing this, you're going to want to make friends with a CPA, and an attorney. Everybody's needs on this front is going to be highly individualized, the couple hundred bucks spent on advice from these two professional friends are going to pay staggering dividends later.

B) Not in my experience. W2 employees have a 20% overhead for various insurances, taxes, etc. There's also significant employment law one has to follow to a T, 'or else'. Consultants, you can be a little looser with.

C) Not disagreeing on this one, but there's also _tons_ of smaller shops and startups who have expensive problems a consultant's specialized knowledge/experience may be uniquely suited to solve.

D) As a non-smoking overweight single male, my 'gold plan' insurance on the west coast is ~$400/mo. At consultant profit margins, that is effectively 'lolwhatever' money.

E) This is yet another example of why hourly billing is nuts. Don't bill hourly. Bill per-project, and charge for the business-value of the work to the business. Considerable literature has been written on this, see works by Jonathan Stark, Alan Weiss, etc. tl; dr - if you're billing hourly, you're doing it Wrong(tm)

F) Strong agree. But just because one may hate writing/speaking/meetings/selling doesn't mean one can't A. learn it, and B. learn to excel at it. Would _you_ take a course on public speaking and read a book on negotiation if you were reasonably certain you could make your current annual income in a quarter's worth of work?

Absolutely agree with (F). Writing, speaking and socializing are learned skills! I'm proof: I was horribly socially awkward until I learned how to speak to people! I also wasn't a great writer, but I kept at it and learned from people better than me. Now, I'm slightly better!

E) I agree that Fixed Cost is better than T&M/hourly...if you're good at estimating and scoping the work beforehand. I.e. if you have lots of experience to sell. It's very easy to lose money on the margin if you're not, hence why I'd recommend hourly for someone new to the game.

(I'd wager that it only makes sense to get into high-rate consulting if you have tons of experience, but that's another debate.)

D) I didn't know it was that cheap for young and single people! But it gets expensive fast if you have a family or advanced conditions.

C) Right, but you'd better be specialized enough to make it worth a startup's while to employ you. Also, it is easier to find startup's willing to hire you in hotspots like NYC or SF than, say, Columbus, OH. You could work remote, but that is a more difficult sell depending on what you do and your rates.

Definitely definitely agree with (A). Mistakes in filling are costly, and you'll eventually have a contract dispute that is easier to suss out with a lawyer.

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