How did you come to be a business owner or consultant?

dynamikdynamik Posts: 12,314Banned
It seems like a lot of the more experienced and knowledgeable people here run their own businesses or work as independent consultants. I'm curious as to what motivated you to do that, how you planned and followed through with your course of action, and what the significant obstacles you had to overcome were.

TIA.

Comments

  • royalroyal Posts: 3,353Member
    I'm a consultant for a Chicago-based consulting agency. We're a midwest consulting company that was bought out by a Fortune 100 company.

    I was always into computers and decided to go to college for Networking/Management. When I graduated, I got the offer of a lifetime. My current employer called me and explained to me a program that they just started. Basically, they are looking for potential future architects that they want to train up themselves. They interview >100 candidates and only a select few are chosen. The interview process was very rigorous containing over 7 interviews with company architects, management, etc...

    So I went to the company's headquarters, when through all the interviews, and they selected me for hire. I then moved out of state for 1 year, and did nothing but go through an extremely rigorous training process where I went out to business with our company architects and senior engineers to learn as well as spend a lot of time studying on labs provided by our company. I poured a lot of time, even my own time, on studying, learning, going through white papers, and just making sure I learn as much as possible. This is why I seem to know more than most people with a typical 2 years of experience.

    I am now back in Chicago and it's been a year or so since i went through my rigorous training. Everything has been going well so far and continue to do what I am doing for a long time.
    “For success, attitude is equally as important as ability.” - Harry F. Banks
  • HeroPsychoHeroPsycho Posts: 1,940Inactive Imported Users
    I ended up becoming a consultant for a Microsoft Gold Partner in the Richmond, VA branch I guess from ramping up on various technologies enterprises use, with a strong focus on Microsoft. When my current employer found me on monster.com, I had only two years of full time experience, and several years of independent consulting work that I used to gain experience. But that two to three years included time working the Premier support call queue for Microsoft Exchange, and I had clustering and other advanced experience with Exchange prior to that, and of course was certified in Exchange 2000 to go along with my MCSE.

    After that, I did a federal contracting work in the DC area, but was not wild about the hustle and bustle of the big city, and the agency I worked for was shall we say exceptionally deliberate about implementing new technology. I was starting to get the itch to move on, and on top of that my wife and I missed Richmond, where we both grew up and have family, but I didn't think I'd be able to find anything good in Richmond, but my current employer found me on Monster, was impressed with my diverse experiences and very high level of expertise in Exchange. After coming aboard, I rapidly upgraded my MCSE to 2003 on their insistence, and have been rolling ever since, with certifications and expertise in ISA and VMWare, along with of course Exchange 2007.

    High level expertise is what gets you paid, but rarely does a company want that level of skill in very specific products unless they're a consulting company, or the maker of the product themselves. If you're looking to make top dollar in IT, you're probably gonna wind up being a consultant either working for a company, or you owning your own business.
    Good luck to all!
  • eMeSeMeS Posts: 1,875Member
    dynamik wrote:
    It seems like a lot of the more experienced and knowledgeable people here run their own businesses or work as independent consultants. I'm curious as to what motivated you to do that, how you planned and followed through with your course of action, and what the significant obstacles you had to overcome were.

    TIA.

    Another long post, but this is a topic that is important to me:

    I am part owner of a consulting company with two other partners. We do various types of work, and are currently branching into other areas. I would summarize our business not as a technology business, but a problem solving and results achieving business.

    My primary motivating factor was that I became tired of making other people rich. I spent years in IT in the financial services industry, and although I did quite well financially, I could have done much better. This is always the case if you are employed by someone else...they must make more money from your contribution than they pay you or you are no longer worth keeping around.

    You could say the primary reason is money, and you'd be correct! However, in my mind it's more about selling my capabilities for what they're worth.

    Some other factors that contributed to my decision include:

    1 - Ability to focus on results - I despise organizational politics and I have no desire to climb any ladders, which limits my earning potential. In large organizations at some point it is possible to run into "salary caps", etc... Very simply put, I like to achieve things, and the other crap that comes with being an employee somewhere tends to get in the way. I was involved in too many projects during my time as someone's employee that failed simply because people in the organization were not focused on results. IMO, a lack of focus on results is a real problem in 99% of all organizations out there.

    2 - Control, or the ability to choose what I do, how I do it, and when I do it - Working for an employer typically means that control over what work, how it's done etc is surrendered. Being independent means that I can accept or decline work on whatever basis I choose. If I feel that someone or an organization is unethical, I can decline the work.

    3 - Career fault-tolerance - I disagree strongly with the notion that having a job for an employer equals "job security". There is no such thing. Being employed by someone means that you are subject to the market forces that affect them. If business goes south, your job/benefits are things that can be potentially cut. Especially in IT, since rarely does a traditional IT function generate revenue for an organization (IT in most organizations is an expense; I consider consulting organizations a bit differently here, consulting is more about solving problems and does not necessarily equal "IT"). Working independently means that one can actively work for multiple customers in multiple lines of business and economic segments. This is the only way to achieve career fault-tolerance.

    Someone will likely respond to this with, "but what about insurance and other benefits?". None of those things are guaranteed to be at the same level or to even be in place in the future by any employer. I have seen medical benefits degrade over the years and increase in cost for many people. My family and I have health insurance, etc.. that is more than adaquate to cover our needs. It is very easy and usually less expensive to find the benefits you need in the open market vs. accepting what an employer can get for you. See point 4 below....

    4 - Tax advantages - The tax code in the US is designed to encourage certain behaviors. Having children, financing houses, and owning businesses are some of those behaviors. Please don't misunderstand me, I am not encouraging tax evasion or anything illegal (in other words, don't setup a business solely for tax advantages...some people do this, but what is it really contributing?). However, it is my belief that everyone should pay their fair share of taxes and nothing more.

    5 - Ability to adapt based on market demand - Often many people end up in a role in an organization where they focus on one specific technology. This is great from the perspective of the organization, because they get very specialized knowledge at a low-cost, and reduced risk over time becauset that person becomes less attractive to other employers as the demand for that specific technology wanes. Working independently, I am able to adjust my skillset based on what the market wants. For example, I spent several years focusing on a product called "ITG" (IT Governance, Kintana, now HP's Project and Portfolio Management). I really don't like this product, but people who can design solutions in it are in high demand. In the last two years, when I saw that ITIL was going to finally become hot in the US, I began to adapt my skillset to ITIL and IT Service Management. What I learned from that experience is that not only is ITIL hot, but so is technical training, which further led me to diversify into different training areas. This is the freedom that typically comes with being independent and is not usually available to regular employees.

    6 - Tendency to not mince words - I have a tendency to not mince words or suffer fools while working. I really just want to get stuff done and move on to the next thing or go home. More often than not this would get me into some kind of trouble as an employee (nothing bad, just a lot of closed door meetings with management and HR!!!). However, as a consultant, customers are paying me to tell the truth because the people that work there cannot or will not.

    7 - Seeing other consultants "churn" clients - Having worked in financial services for many years I saw many cases where consultants were hired to do hourly work and accomplished absolutely nothing but to secure more hours that they could bill. Many times, the customer was paying $200 per hour plus and was receiving no results for that money. This is common in the consulting industry. I knew that I would always be ableto outcompete others in this respect by making myself more qualified than everyone else and by demonstrating a track record for achieving results.

    ========================================================

    Planning

    1 - Read, read, read - There are many good books about starting your own business, but there are probably more bad books about this very topic.

    Two of my favorites are:

    http://www.amazon.com/Million-Dollar-Consulting-Professionals-Practice/dp/007138703X/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1213201598&sr=8-1

    - This guy is a bit cocky and arrogant, but his advice is spot-on, and he is very successful -

    http://www.amazon.com/Choice-Theory-Psychology-Personal-Freedom/dp/0060930144/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1213201643&sr=1-1

    - This book is not specifically about business or consulting, it's about being responsible for the choices you make in life. This book is no nonsense and is not motivational life coach bs....the guy is an MD with many years of experience. Understanding this book results in the knowledge that the choices that you make culminate in some result...that result is whatever you want it to be.

    2 - Professional help - Definitely speak to an accountant and have one manage your books. A good one will save you money. If you are involed with others in your business have an attorney draw up the agreement and necessary papers (in my case, we are an "LLC", so we have a company agreement that explains rights, distributions, etc...). Avoid the things online that say you can incorporate for $99...I personally wouldn't be able to sleep at night without knowing that I had a relationship with an attorney that (at least while I am paying him) has my best interest in mind.

    3 - Professional liability - Don't overlook this. Pay the small fee to properly ensure yourself. Additionally, when you meet with clients you can present this up front rather than waiting for them to ask you about it. It communicates that you can see both the big picture and focus on details.

    4 - Professional organizations - To some extent these are worth joining. My rule of thumb is that I only join as many as I can actively contribute to. These can help with various discounts, etc., and can be a source of business advice and new work.

    5 - Contacts - It is likely that your first work will come from someone that you already know. Always keep track of who you know, what they need, etc...

    6 - Family - Ensure that your family is a part of your planning, and that you all understand the effect this will have on them. For example, sometimes as a consultant you have to travel a lot...this will affect your family, it is best to be prepared for it. It's best to think about these things and discuss them beforehand than to be surprised when they hit. Of course, this same risk exists with any job as well.

    7- Education - Get the best education from the best name school that you can. Don't worry about the degree field (especially undergrad). It doesn't matter much except only in a few instances, and no one really cares what your degree is in as much as they care about whether or not you have one and what school it came from. Specialize once you get to graduate school.

    ========================================================

    Follow-through

    Don't plan forever. You only live once, break things down into steps that can be accomplished and get started.

    ========================================================

    Obstacles

    I've encountered quite a few, but probably not all of the possible obstacles that can get in the way of success.

    1 - Yourself - You are the biggest obstacle to your success. The results you achieve will be the culmination of the choices that you make. Not defining the results you want, and then doing achievable thing to achieve those results will cause a different outcome than what you wanted.

    2 - Reading/Learning - If you don't like reading and learning, then being indepedent is probably not for you. There is another independent guy on this board (I can't remember his name) who once indicated that he reads about 4 hours per day. I would say that's about right.

    3 - People Wanting Something for Nothing - As an independent you will encounter everyday someone that wants to pay you almost nothing for your services, and is shocked when you tell them your rate. I could tell countless stories about this very thing, but yesterday one happened to me.

    I was offered a 3-day ITIL v3 Foundation training assignment and was requested to offer a quote for it. My quote was 3k + reimbursement for travel and expense (this is standard for this particular class). The person offering the work responded that this was too high, and that he was receiving quotes in the range of $800 to $950 per day all-inclusive and could I meet those quotes.

    This is total bs on his part. First, there are very few people in the world that are qualified to deliver this particular course (however, there are many unqualified people out there that have no business teaching this, which could have been the source of his bids). Second, if he had found someone willing to do it for $800 per day why would he even contact me, and why would he say a range of $800-950 per day? Third, doing this for $800 per day including expenses would net me about $48 per hour. If that's all I'm going to earn for going to Iowa for 3 days, I think I will pass and stay at home with my wife and son.

    I responded that if those people he found were qualified then he had found his lowest price. He continued to send me emails asking me to lower the rate. Finally, he indicated that if I wanted more business from his company in the future that I should start out offering lower rates and build up to higher rates based on my success.

    I don't receive coaching very well from people I don't know, so I responded that he was a greedy bastard and could go f*** himself. I added that my revised offer was now $4500 plus reimbursement for travel and expense. He continues to email me. I'm certain that he has no one else that is qualified that can do this class. I'm also fairly certain that I don't want to work with his company, so they're going to pay a premium if they want me.

    Here's the financial reality of the situation...a course such as this costs about $1700 per student, with a minimum of 8 students and a maximum of 16 students. That's total revenue range of
    $13,600 - $27,200. Even in the most extreme cases, the expenses associated with this class are less than $10,000 (there is no equipment required, material is about $100 per student, etc..). Thus, my offer was about 15% of the maximum revenue. My rule of thumb is to stay in the 15 to 20% range of maximum revenue on these types of assignments...I'm not sure if that's an industry standard or not, but it's what I like to follow.

    This is only one of about a million stories I have like this.

    My Advice - Stand Firm on Your Pricing - Be prepared to lose work but also understand that by not working for people that are greedy or aren't professional, you are in the long run saving yourself time, money, and headaches.

    4 - Outsourcing - Be prepared to outsource work to professionals from the very beginning. I am not an accountant, nor do I want to be, so this is a type of work that I hire a professional to do. Sales is another area where this is important (in fact, we are expanding a sales force now). Basically, to be successful means that you can't do everything yourself...you have to focus on what your'e best at.

    ========================================================

    Finally, don't spend all of your time responding to posts on message boards! (oops...I dropped the ball on that one this time....).

    MS
  • royalroyal Posts: 3,353Member
    eMeS wrote:
    I don't receive coaching very well from people I don't know, so I responded that he was a greedy bastard and could go f*** himself. I added that my revised offer was now $4500 plus reimbursement for travel and expense.

    I enjoyed reading this part the most.
    “For success, attitude is equally as important as ability.” - Harry F. Banks
  • eMeSeMeS Posts: 1,875Member
    royal wrote:
    eMeS wrote:
    I don't receive coaching very well from people I don't know, so I responded that he was a greedy bastard and could go f*** himself. I added that my revised offer was now $4500 plus reimbursement for travel and expense.

    I enjoyed reading this part the most.

    Thanks.

    I learned the "increase the price" tactic from a guy I once worked with who was a fighter pilot in Vietnam. If you've ever know a fighter pilot then you'll understand his demeanor and attitude well. He was having a garage sale once, and an item was marked "$5".

    A customer came up, looked at it, and asked the price.

    My friend said "$5, it's on the price tag that you're looking at."

    The customer said, "I'll give you $2 for it", to which my friend replied, "the price is $5."

    The customer then said, "ok, how about $3." My friend then said, "the price is now $7."

    It's a simple example of a strong tactic that can really throw people off of their game. In a business setting this will either get you the money you want or get you thrown out, both of which are outcomes that are in your favor.

    Telling him to go f*** himself is my own unique spin. It is public domain, so you are welcome to use it.

    MS
  • garv221garv221 Posts: 1,914Member
    dynamik wrote:
    It seems like a lot of the more experienced and knowledgeable people here run their own businesses or work as independent consultants. I'm curious as to what motivated you to do that, how you planned and followed through with your course of action, and what the significant obstacles you had to overcome were.

    TIA.

    2 months ago I started my independent consulting by entering into a contract with a company paying me $100/hr minimum 5 hours a week of maintenance and handling requests after that. Its about average 8 hours a week. I did it because I cannot punch a clock for the rest of my life and drive an SL65 working for someone else.
  • garv221garv221 Posts: 1,914Member
    eMeS wrote:

    I learned the "increase the price" tactic from a guy I once worked with who was a fighter pilot in Vietnam. If you've ever know a fighter pilot then you'll understand his demeanor and attitude well. He was having a garage sale once, and an item was marked "$5".

    A customer came up, looked at it, and asked the price.

    My friend said "$5, it's on the price tag that you're looking at."

    The customer said, "I'll give you $2 for it", to which my friend replied, "the price is $5."

    The customer then said, "ok, how about $3." My friend then said, "the price is now $7."

    My ex employer who is the CEO, meet his best partner in this negotiating tactic and they both ultimately became rich together. My CEO was going to do insurance paid construction for this attorney but during the bid process the attorney kept low balling him. My CEO finally said "I'm not doing this work unless you pay me "X" dollars and put an additional "X" dollars in a retainer for me to cover the costs of my attorney when you decide to sue me after the completion of the work." The attorney loved it, they struck up a friendship and a multi million dollar business was created.
  • vistalavistavistalavista Posts: 78Member ■■□□□□□□□□
    I got a question for all you guys that have been doing consulting for a while and that have just started. How do you start out in consulting? How hard was getting that first client? And how do you try to grow your business (Do you have permanent sales people and do you pay them commission or salary)?
  • dynamikdynamik Posts: 12,314Banned
    I got a question for all you guys that have been doing consulting for a while and that have just started. How do you start out in consulting? How hard was getting that first client? And how do you try to grow your business (Do you have permanent sales people and do you pay them commission or salary)?

    To follow up on those, and at what point did you feel like you were technically competent/experienced enough to go it alone?

    Thanks to everyone who has responded :D
  • vistalavistavistalavista Posts: 78Member ■■□□□□□□□□
    http://www.unixwiz.net/techtips/be-consultant.html

    It's a good read for anyone interested in consulting.
  • keatronkeatron Posts: 1,208Member ■■■■■■□□□□
    I was first a consultant, then a business owner. Part of business is training, and I discovered my passion for it years ago. Once I had a few clients and was keeping myself busy 60 to 70 hours per week, I started to explore getting help. At the point I reached 80 hours per week, I went out and got my first employee. I had good legal counsel, a good CPA firm and a good Insurance rep, from the beginning. So even though I only had one employee at the time, I had benefit packages, and all that stuff set up. It's not as expensive as one might think. I basically followed the same formula up to this point. Get everyone billable and busy, then get more help. The fact that I'm also a trainer helps a lot in getting employees profitable early on. I always find ways to challenge and inspire my guys (i think the training peice comes in again here). Not only that, I make sure everyone else is in the same frame of mind. In other words, part of your job (and yes it's in our job descriptions), it is expected do what you can to inspire those around you. I don't tolerate politics and back stabbing. One of the fastest ways to get on my bad side (or get terminated), is to come to me or any other senior person talking negatively about another employee. If you have a problem with another employee, work it out with them. If you can't and need our intervention, i'll sit down with you, AND the person you have a problem with. This keeps everyone forward thinking and minimizes the political garbage I hated so much when I worked at other companies. My salaries are well above anything remotely similar to an "industry standard". My bonuses are "insane" according to some of my employees. Bonuses are based heavily on performance.

    Early on I considered just being a consultant, and contract trainer, but once I got bit by the entreprenuer bug, I knew I'd pretty much be a business owner for the rest of my life. Honestly, it was the only way I saw to be able to do all the things I love doing. I get to do security consulting (including pentests, vulnerability assesments, etc), forensics, I get to train and interact with all kinds of people all over the world, and I get to watch my business, and my employees grow; And not only that, I get to contribute to the same. Running a growing business is hard work, Once I passed 10 employees, the work of actually managing the company seemed to increase in difficulty exponentially. But I wouldn't have it any other way. I treat everyone with respect and help whenever I can.

    Again, I guess the biggest factor contributing to me starting the company was the fact that I knew without my own company, I might not ever be able to do all the things i wanted to do.
  • garv221garv221 Posts: 1,914Member
    keatron wrote:
    Again, I guess the biggest factor contributing to me starting the company was the fact that I knew without my own company, I might not ever be able to do all the things i wanted to do.

    That is the key.


    How did you come about a name for your company? I'm struggling with that. I know all the keys to a good name but I'm too picky.
  • keatronkeatron Posts: 1,208Member ■■■■■■□□□□
    garv221 wrote:
    keatron wrote:
    Again, I guess the biggest factor contributing to me starting the company was the fact that I knew without my own company, I might not ever be able to do all the things i wanted to do.

    That is the key.


    How did you come about a name for your company? I'm struggling with that. I know all the keys to a good name but I'm too picky.

    Well I think one thing that people often struggle with when coming up with a name is trying to make sure the name is related to the company. Don't stress this too much, because it's really not that important at all. If you build a good company and establish a solid reputation, the company will make the name, not the other way around.

    Let me give you some examples of successful companies who's names don't say anything about what they actually do.

    1. Google. Heck, before the company, I doubt there was even a such thing as google. Now it's pretty much it's own verb.

    2. What about Starbucks? Who would ever relate that name to coffee. But it's a great name and it's easily remembered.

    3. Apple. A brilliant name. Even though it's a fruit, it somehow fits a tech company nicely.

    4. Monster. Really doesn't have much at all to do with job searching.

    5. Nike, Reebok ?

    6. Cisco. The first time i heard this name I thought about the little plastic juice cups we use to get in elementary school. Remember? They were plastic little cups with tin foil or aluminum like peel off lids. The company name that made most of those was named Sysco I think or something like that.

    7. How about Chase for a bank name?

    8. Yahoo!

    9. We cant forget Intel.

    10. And actually I always thought Gateway was a good name for a computer company.

    These are just a few but the list goes on and on. So I think part of your challenge might be trying to find something that somehow illustrates, describes or is somehow connected to what you do. It's really not a requirement as you can see from the above examples, and I've seen people settle for horrible names in the interest of trying to make the name describe the company. That's what we have slogans for!!!!
  • PashPash Posts: 1,601Member
    Inspiring stuff!

    My bro also works in IT, for the same company as I funnily enough, different customer site though (wouldnt wanna see his ugly mug all day). We always said that one day we would make a family business and be our own bosses but we have only been in the industry for less that 4 years combined, my question is:-

    "How many years industry experience is baseline for getting new clients attention?"

    We also have a friend who did exactly the same as some of the above and made his own company with an old work colleague. They said in the first year or so they were working so hard, falling asleep during the day at their office desks wasnt uncommon. Keatron outlined the hours expected early on above, "80 hours a week". How tough is it and whats your keeping focussed techniques?

    I honestly would say I would need to undergo personal and professional changes if i could successfully run a consultancy business in the future. While I do enjoy learning very much, my time planning is poor and this would need a massive overhaul. Does everyone have these tiny idiosyncrasy's that required work arounds to be successful?

    Sorry for my questions but if they get answered be very happy :D
    DevOps Engineer and Security Champion. https://blog.pash.by - I am trying to find my writing style, so please bear with me.
  • PashPash Posts: 1,601Member
    Sorry also another question which ties in with my experiences so far (small story i promise):-

    I am on some levels doing consultancy to excisting customers of my current company, mainly the proof of concept type of engineering done in the background, which probably doesnt get much attention but is critically important before attending meetings with customers for projects!

    Although currently I am being shoved between sites for support working BUT still expected to take care of other customer project engineering. This naturally has lead to slow responses, with no time to 'simulate' customer requirements and management offering unrealistic deadlines......It's one huge pot of boiling **** currently.

    If I was the client/customer I would see this as hugely unprofessional....do I start panicing now that I cant build up proper relationships with customers or look 100% committed all the time? Anyone else have a simular situation?
    DevOps Engineer and Security Champion. https://blog.pash.by - I am trying to find my writing style, so please bear with me.
  • homerj742homerj742 Posts: 251Member
    eMeS wrote: »
    ========================================================

    Planning

    1 - Read, read, read - There are many good books about starting your own business, but there are probably more bad books about this very topic.

    Two of my favorites are:

    Amazon.com: Million Dollar Consulting: The Professional's Guide to Growing a Practice: Alan Weiss, Alan Weiss: Books

    - This guy is a bit cocky and arrogant, but his advice is spot-on, and he is very successful

    I really like Alan Weiss's books, particularly the one you mentioned and "Getting Started in Consulting". Great post. I'm glad I got to see this thread :)
  • JBrownJBrown Posts: 308Member
    eMeS wrote: »
    snip
    ========================================================

    Planning

    1 - Read, read, read - There are many good books about starting your own business, but there are probably more bad books about this very topic.

    Two of my favorites are:

    Amazon.com: Million Dollar Consulting: The Professional's Guide to Growing a Practice: Alan Weiss, Alan Weiss: Books

    - This guy is a bit cocky and arrogant, but his advice is spot-on, and he is very successful -

    Amazon.com: Choice Theory: A New Psychology of Personal Freedom: William Glasser: Books

    - This book is not specifically about business or consulting, it's about being responsible for the choices you make in life. This book is no nonsense and is not motivational life coach bs....the guy is an MD with many years of experience. Understanding this book results in the knowledge that the choices that you make culminate in some result...that result is whatever you want it to be.


    ========================================================

    snip

    Finally, don't spend all of your time responding to posts on message boards! (oops...I dropped the ball on that one this time....).

    MS

    Just ordered both books from amazon.

    Thank you for the links.
  • rossonieri#1rossonieri#1 Posts: 800Member
    @ eMeS

    i have nothing to say,
    it seems that you've put all the things there on the right corner :)

    and i should agree with homerj - i should get that mr. weiss book, it looked interesting to read, and put on my book library.

    ;)
    the More I know, that is more and More I dont know.
  • homerj742homerj742 Posts: 251Member
    Get this too: Amazon.com: Getting Started in Consulting: Alan Weiss: Books

    I hope to become an independent consultant in the near future.
  • WillTech105WillTech105 Posts: 216Member
    Thanks dynamik for starting this thread -- I've always thought about doing consulting (and thanks to eMeS for that great wisdom!) . Like many of the other people here, I'm getting tried working to make someone else rich off of my work. I'd like to call my own shots, hours, and what jobs I'd take. I will soon be starting a new position with a consulting company so I hope to learn some real-world consulting experience from them (unfortuantly still 8-5) to sometime in the near future to open my own consulting company.

    Thanks again to everyones posts its very informative and inspiring!!
    In Progress: CCNP ROUTE
  • chmodchmod Posts: 355Member ■□□□□□□□□□
    The most importante thing:

    Cash Flow

    Beyond having regular ongoing work lies matter of cash flow. Even if you regularly invoice at the start of every month, customers have their own schedule for paying, and this can be nerve-wracking to deal with.

    For many years I operated on net-30 terms — payment due within 30 days of the invoice — but when you add postal delays, waiting for manager approval, being put on the next regular check run, and sitting on the president's desk for a signature, it's not hard for invoices from even good customers to take 45 days to arrive in your hand.

    I moved to net 10 terms, and this made an enormous difference in cash flow: a few customers simply cannot accommodate that fast of an invoice turnaround, but it's been a big win. This is a "soft" 10: I tell my customers that the first regular check run on or after net 10 is timely, and this usually means 10-15 days. What a huge difference this made in cash flow.

    Where this still gets tricky is when a customer is a bit late for whatever reason: your creditors don't really care. But a consultant can never do anything other than perform routine collections with a customer. Asking for a stale invoice to be paid is fine, but it's exceptionally bad business to give the customer any hint that you're in a bad place.
    Consulting maxim:
    A financially-struggling consultant does not give a customer The Warm Fuzzy Feeling™

    No matter how tight your bind, your customers can't find out.

    I have experienced this, and i really hate it.
    Besides these, if you think you can go ahead.
  • rossonieri#1rossonieri#1 Posts: 800Member
    @ chmod
    Where this still gets tricky is when a customer is a bit late for whatever reason: your creditors don't really care. But a consultant can never do anything other than perform routine collections with a customer. Asking for a stale invoice to be paid is fine, but it's exceptionally bad business to give the customer any hint that you're in a bad place.
    Consulting maxim:
    A financially-struggling consultant does not give a customer The Warm Fuzzy Feeling™

    No matter how tight your bind, your customers can't find out.

    I have experienced this, and i really hate it.
    Besides these, if you think you can go ahead.

    could not disagree with you ;)
    you've said it all.

    well, not to discourage some - but, just like the other - we do have good times and all that smiley face as well as not a comfortable some. so, we really need that mentality & be prepared :)

    in short, there is no big difference between being a self-employed and an employee = we must responsible to our job/duty that is.

    i represent my company. if i cant make it 8 to 5 sharp, then that will my company be ;)
    the More I know, that is more and More I dont know.
  • Vancity.rigelVancity.rigel Posts: 14Member ■□□□□□□□□□
    I picked up the Alan Weiss Book Getting started in consulting third edition.
    Its a very good read so far about half way through. There is good advice for a wide variety of industries. In fact I wish I would have read this book before becoming a financial planner. I know I am years away from starting up but I do know I am going to read more of his books on my journey.
  • Solaris_UNIXSolaris_UNIX Posts: 93Member ■■□□□□□□□□
    I'm not a consultant (I'm at the bottom of the organizational totem pole and I work to make other people rich from the fruits of my labor).... but I just wanted to say that reading this thread and getting a small taste of the wisdom and insight that people who have been in this field for a long time have is very inspiring.


    ps -e -o pid | xargs -t -n1 pfiles | grep "port: $PORT"

    dtrace -n 'syscall::write:entry { @num[zonename] = count(); }'

    http://get.a.clue.de/Fun/advsh.html

    http://www.perturb.org/display/entry/462/
  • milanchatterjeemilanchatterjee Posts: 36Member ■■□□□□□□□□
    Hi eMeS
    Your post is really inspiring and informative. I have saved a copy of your post separately on my laptop for reference and information.

    The situation is slightly different in India because of the low and lax enforcement of various Govt. rules and directives. I would like to know one thing.

    How do you deal with a customer, when he refuses to release payment, which he keeps delaying giving minor pretexts and others and you are in bad need of the money for some urgent and immediate payment?

    Thanks very much

    Milan Chatterjee
  • joey74055joey74055 Posts: 216Member
    I have a question. What is the going rate to typically charge? Is it the same rate for all things or does the price vary depending on the type of work down? For example, how much is usually charged for building a server? Putting in a firewall? Setting up an exchange server and etc.? Is server type jobs say $25/hour and networking more or less or do you just pretty much charge $50/hour for all services rendered?
  • eMeSeMeS Posts: 1,875Member
    Hi eMeS
    Your post is really inspiring and informative. I have saved a copy of your post separately on my laptop for reference and information.

    The situation is slightly different in India because of the low and lax enforcement of various Govt. rules and directives. I would like to know one thing.

    How do you deal with a customer, when he refuses to release payment, which he keeps delaying giving minor pretexts and others and you are in bad need of the money for some urgent and immediate payment?

    Thanks very much

    Milan Chatterjee

    I missed this post...apologies.

    I've never had this problem. I work only with well-established companies that pay their bills. My general target market are large enterprises. The biggest I've worked with has an IT budget of between $1 Billion and $2 Billion per year. Any work I do in the Caribbean or Mexico, which is usually very lucrative, is paid up front. That's the nature of dealing with third-world countries, but it's a tiny fraction of our business.

    If I did have a client that wasn't paying, I'd have my attorney demand payment. If that didn't work eventually it would escalate and at some point I'd get a judgment and try to collect on it.

    One way you might want to mitigate this in the future is to structure your payments in a way that you are paid as the project progresses. I see this a lot in the US, especially with governmental agencies because it tends to be a way to get things approved without having to go through a competitive bid process...

    MS
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