So you want to be a consultant? | Hacker News Reader

So you want to be a consultant?

unixwiz.net

193 pointsCaptainMorgan26 comments

I wish I could upvote this a hundred times. It's been a couple of years since I've consulted, but almost every piece of advice in this article is good.

I take some issue with his finance section, but it looks like he's a set up as a Sole Proprietorship (it's a bad idea if you're consulting by the way; set up an LLC or a Corporation, and spend a few bucks on a CPA). It's risky to run all your personal accounts in line with your business accounts; I think most people here understand why (in case you don't, this is where "piercing the corporate veil" occurs).

Otherwise, there are tons of great pointers in here, including more than a few that I wished I had thought about when I was consulting.

If you're thinking about consulting I would seriously print this out and read it multiple times; I know it would have saved me some heartache when I was getting things figured out.

I agree about setting up a company - I think if you're not prepared to separate personal and company accounts, you're not ready to do consulting.

The Secrets of Consulting by Gerald Weinberg is also an excellent resource for consulting nuggets like those presented in the article.

Overall a great article, but I had a few issues too:

1. I worry about giving away some things for free. If you give away research time for free, or you chase a dead end and decide not to bill it, do you set a precedent that those things will be free in the future?

2. You're absolutely right on the financial front. Mingling your business and personal expenses, and not operating as an LLC or corporation, means all sorts of unnecessary risk.

3. He suggests that a consultant who only works regular hours is less valuable than a consultant who is willing to work 24/7, and so justifies lower rates. I think this is backwards: if I'm going to pay someone $100/hour, I want to know that they're thinking clearly and have slept.

Otherwise, this is great advice. I wish I'd had it 5 years ago, when I started my first dev shop. The Warm Fuzzy Feeling (tm) concept right on; customers want a good relationship, and responsive communication, as much as they want technical skills.

"If you give away research time for free, or you chase a dead end and decide not to bill it, do you set a precedent that those things will be free in the future?"

I don't think so. You set a precedent that you will be fair to the customer. If you don't chisel them out of every minute, they'll trust you when you do bill them.

If someone reads only one part of that page, it should be:

Why work 8 hours/day for someone else when you can work 16 hours/day for yourself?

If you think it's a dumb question because the answer is obvious, you've got the right mindset. If you think it's a serious question, stick to your day job.

Excellent point. I'd rather work all day for myself... actually, I do that now - and I wouldn't change it(unless I had no choice) for some 9-5'er. :)

Great article. It's good to note that "The warm fuzzy feeling" is not unique to consulting. It is important in any area of business. This includes dealing with customers, investors, and even co-workers, employees, or supervisors.

I printed this article out a couple of years ago when I started consulting and it has been an inspiration to me. It's always worthy of a re-read!

Great article. I have been consulting and though I stand by all of these, it had been real hard to manage some of those. I can't say it in words how much this article helps.

excellent article, especially in the current economic situation where everyone could use a consulting gig to supplement their income

There's no date on this article and I remember bookmarking it long ago. When was it written?

What this document basically means is - You Don't Want To Be A Consulant.

Because?

You could probably turn that into 100 reasons to (or not to)...

A big one is that these are businesses more difficult to sell.

They're easier to sell; they just sell for much less.

Because it's very stressful.

This is true... if you make it true.

My time as a consultant included the most challenging stuff I've probably worked on; but it was also some of the most rewarding work I've done. Consulting is a pretty vast world; you can be a glorified contractor or you can go help companies actually solve some of their deep problems. If you have a good customer-base, you can be up to your ears in interesting work and get paid incredibly well for it.

The downside is that you're a bit of a ronin, and you have to be ruthless with the customers you keep as well as the new customers you bring on.

I don't think I have the energy to do it full time any more, because it is incredibly time consuming; but I am definitely glad I did it for as long as I did.

Everything worth doing is stressful. Try making payroll.

If that's what you think after reading articles like this, then you are absolutely right. Some people aren't wired to work for themselves, and they are better off being dissuaded from doing it.

Consulting is not the only way to "work for yourself". Income from consulting scales linearally with the time you put into it. Considering there are only 24 hours in a day and that you need to sleep every so often, you tend to hit a wall with respect to income. This is why people want to avoid consulting; it is an endless march of death. There is no way to get ahead.

Anyway, making a product is the way to scale past $WAKING_HOURS. I have only written a book so far, but even that provides some income. It is nice to see royalty checks a year and a half after I've written the book. I would almost call it free money, and that's the best kind :)

Income from consulting scales linearally with the time you put into it

While that is true, there's no need for your value/hour to be fixed. E.g. if you're worth $x/hr to implement something from scratch for one customer, you ought to be worth $n*x/hr to do the same or similar work for another, since now you have experience, reusable code, a reputation, etc. There is a limit obviously, but it's not clear when you start what exactly it might be.

The author is completely wrong about "client v. customer". Your "customers" should be "clients", because it instills confidence. The difference is the country doctor versus the highly payed surgeon. A country doctor pokes around and asks "where does it hurt". The highly payed surgeon goes in to the situation and says, OK, this is your problem, I have performed this procedure 100 times, this is what we need to do. So if your client's pain is not having a good website, you go in there and say, OK, this is what we need to do, wether that be the look and feel, optimizing it for search, adding video, whatever. Don't say "what do you want me to do", say, "this is my recommendation based on my knowledge of the problem you are having and my experience in that problem's solution".

The principle underlying this, is you want your revenue curve to be linear as you add more customers, but you want your cost curve to be logarithmic, that is, you want to do LESS work for the next customer than you did for your last customer, and still get the same payment. What I mean by less work, is basically provide the same solution for the same problem, but since you have done it before, it is easier the next time. Have a basic approach for the problems your clients have, so, for example, if they need their website optimized for search, have a basic strategy for doing this, and apply that for each new customer with this same problem.

Kissing the customer's behind and re-inventing the wheel for each new customer doesn't do anybody any good. It reduces the consultant's profit by requiring more time, and it reduces the efficiency with which the customer gets their solution, because the consultant is being a short-order cook with them and re-inventing solutions for every new problem, which takes a lot longer.

So if you want to slave away re-doing the same thing over and over again for each new customer, by all means, treat the client as a "customer", but if you want to provide timely solutions for the client, and not have to re-invent the wheel all of the time, then take the "surgeon" based approach and not the "country doctor" based approach.

The client pays you to know the solution to their problem. So don't ask them what solution would they like, rather, tell them the recommended solution that you know works. Kind of like you don't want your doctor asking you which treatment for your brain tumor you most prefer. Rather, you want your doctor telling you which treatment for your brain tumor is going to the most effective, based on how that treatment has worked for others. Sure be nice and respectful to the client, but inspire confidence in having a good grasp on what will work for them and what will not.

5 paragraphs about country doctors notwithstanding, it costs more to constantly acquire new clients than it does to continue servicing a steady client. It also makes your pipeline more predictable, and it generates word-of-mouth business. Companies continue to do business with people they like doing business with. Customer service is a win.

You had some good points, but it felt to me like everything you said was repeated 2 or 3 times.

"I didn't have time to write a short letter, so I wrote a long one instead." - Mark Twain

good article, it's been bookmarked for future reference.

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