[zenpaul]

I've been there and done that for better and worse. It sounds like the author wants to create their own agency which is a different game than being a solo consultant. If you really want to be a solo consultant...

Lessons from 20+ years as a solo consultant:

- Customers rarely know what they want.

- Customers always change what they want.

- Change control in fixed bid work is vastly more important than how smart or productive you are.

- It takes an extraordinary amount of effort to find customers.

- One gets customers by searching, networking, having other good customers and mastering useful technologies.

- What matters long term is consistently making money every month.

If you truly want to be a solo consultant:

- Maintain good relationships with your customers.

- Bill hourly and get paid no later than monthly.

- Be willing to work with consulting agencies and accept their markup on your rate.

- Always be learning and using new technologies.

- Always be looking for the next opportunity.

[TuringNYC]

I did this for a short time, but one more important lesson I learned: The more $ you charge, the better you get treated by customers. The less $ you charge, the more abuse you take from customers.

[zenpaul]

Yes, absolutely.

Also, once you get good rates, you ask for a higher rate from the next customer. If it is higher than their highest rate they tend to tell you what their highest rate is which gives you a great place to negotiate from. Like, maybe I'll take less if I can work remote 2 days a week.

[unreal37]

I agree. As 20+ years as a consultant, I can't imagine billing "per project". That dream project where the requirements don't change and the scope is perfectly estimated in advance doesn't exist.

[nosianu]

Anecdote:

I - then working as a freelancer programmer for a few years - once had a (German company) customer where the person that I was supposed to work with was so unpopular and known as "difficult to work with" inside the company that the manager that had hired me for the job apologized profusely, especially that he had to place me in the same room with that person. All the people I had contact with were similar.

Why was he never fired? Well, because he was so good, you could say he was perfect. So they gave him a room for himself - usually it was about four people per office and accepted the rest. And I say that with decades of job experience in many software companies in the US and in Germany. The documents describing what he wanted down to the last detail were just.. perfect! I ended up doing two programming jobs for them a year apart and both times I simply took the documents and worked on it from top to bottom until it was done. I never had to ask a single question, there never were any changes. Sometimes I had to explain a few things I did, but that was just usual communication, there never was anything unclear.

And also, I never had any issues with that guy myself, even during the time we shared a room. He "merely" expected everybody to be on his level, other than that he was fine. Once a female colleague came into the room to ask him something, and in an exasperated tone he told her that he had already described everything she asked for in paper X in section Y. And he was right, what she had asked was right there. As always, he had everything perfectly planned and documented well in advance. Of course, that's no way to gain any social points and that woman was almost ready to cry (I had quite a few chats with people working in the other rooms and the women disliked him the most, but the men did too), but for better or worse, he was just too perfect and expected the same perfection from everybody.

That was the first and only time I ever had such an experience, everybody else apart from that one guy is just working normally. Right now I have the exact opposite experience, I program for people who only have very fuzzy ideas what they want. Works too - you just have to treat it differently and have a different mind set. That one job is one of my most memorable experiences, including the social drama.

[burnte]

Most of my 27 years were as a consultant. Honestly, every time I hear someone talk about what you did, scope change, I ask, "What was the original definition in the contract?" Usually I hear back, "it was just a quote for the job, no contract."

Scope changes aren't scary if you write a good contract. As a consultant, that's truly one of the most important skills, writing a well defined scope for contracts. That way when it changes, you're covered by change order fees.

[hobofan]

Those responses are so funny to me, as there seems to be a complete difference in recommendations, every time this topic comes up.

I'm also very happy with hourly billing, but the last time I saw a similar topic, the whole comment section was insisting that per-project billing is the only viable way to make money in consulting. Oh well..

[agumonkey]

Have you ever had a project stuck because of you ? something you didn't manage to pull off (that you didn't foresee) ?

[hermitdev]

> Customers always change what they want.

Definitely this. I moonlighted as a consultant while at a full time salaried day job. Job was billed as some minor enhancements to a data processor and a website for one of their clients. What it quickly devolved into was badically me being the scapegoat for everything that was wrong and expecting me to to answer rather impolite and unprofessional emails from their client (this was in finance). Even billing at 150/HR, it wasnt worth it and I quit after a few months.

The little extra per week just wasnt worth the stress and hassle.

Edit: grammar

[chiefalchemist]

It's not that they don't know what they want. It's not that they change their mind. It's that they are oblivious to the cost (to you) of both. Furthermore, when the cost is fixed there's typically no incentive for them to be reasonable.

I find it funny how often I hear, "it's just..." Really? You hired someone else because of your lack of knowledge/experience but suddenly miraculously you have complete clarity on what it's going to take?

[tel]

Why do you suggest hourly? I understand fixed big puts all of the risk on you, but would you also consider daily or weekly billing as a reasonable compromise?

[AzzieElbab]

Larger clients are not flexible about how you bill them. Hourly is the only option. Never mind that you might be working on multiple projects, run training, meetings and so on

[zenpaul]

Billing hourly or daily is about the same. Weekly gets complicated. It is all about reducing risk, locking in cashflow and getting compensated for your time and energy.

[thdrdt]

I found billing per 4 hours works very well. The customer understands this and I can reserve a part of the day for one customer.

[agumonkey]

> - Change control in fixed bid work is vastly more important than how smart or productive you are.

Care to explain ? don't accept overwhelming changes without adapting the cost ?

[zenpaul]

jiggawatt has a good example.

The thing is that managing inevitable scope changes is an art and a science. Some changes get accepted as part of the project, others are scoped as fixed price updates and others are very hard to scope so may be hourly. In any case this involves identifying the changes, scoping the work, estimating the work, pricing the work and then negotiating with the client to accept the pricing on the change. All of that takes time, often has little to do with the actual development and adds additional risk. That change control is the delicate balance of pleasing the customer while continuing to make money without taking on too much risk.

[jiggawatts]

I know exactly what he's talking about.

I work for a small consulting firm, and we keep bidding on very aggressively-timed projects with technical challenges and high skill requirements. Things like directory system mergers, mail migrations, complex infrastructure builds, etc...

The conversation always goes like this:

"How long would it take your to do it?"

"Physically? 2 weeks of button-pressing time."

"With change control and stuff?"

"6 months."

"What!? That's crazy, the customer won't accept that!"

"Well, tell them to stop adding 2 weeks of change control management paperwork for a no-risk 5 minute task in a green field environment with zero data and zero users and then we can do it in 2 weeks."

"They have processes! You know that!"

"Their processes are stupid, that's why it's going to take a chunk of a year and cost an order of magnitude more."

"Fine, we'll promise we'll do it in 4 weeks and then bill them for anything over that if we're slowed down by change control"

"So now I have to do both the change control paperwork and I'll have to track everything internally so we can charge the overheads back? It'll take one year."

"You're wrong! You'll see! It'll be 6-8 weeks at most."

... one and a half years later...

"I told you."

The customer of course signs off on the 4 week estimate, thinking they got a good deal, and the final bill is like 95% overruns and paperwork overhead, but we make a much bigger profit so we don't care. Why would we? We get paid at consulting rates to sit around and fill in boring, simple paperwork. The customer doesn't care either, because they see the costs as "unavoidable", and it's not their money. It's either the taxpayer footing the bill, or it is some huge department's budget at MegaCorp. The decision maker never gets any personal penalty for this kind of thing.

This is why 90% of larger government IT projects have cost "overruns". It's not really an overrun, it's just how these things play out.

PS: This really does happen this way. At a recent project the minimum lead time for any change of any magnitude was 2 months, which was negotiated down from a proposed 4 months. If anyone forgot a firewall rule somewhere we all had to put tools down and twiddle our thumbs while one guy on the team filled out the paperwork and jumped through the hoops to convince the powers that be that yes, server applications really do need networking.

PPS: I have seen change control stop a bad change going ahead exactly once in twenty years. Once. That's because I rejected the change, and this caused an argument and then eventually they did the change anyway and broke stuff. I'm convinced that change control is 99% pointless. The 1% benefit is dwarfed by the overheads and costs. Change my mind.

[goblin89]

I’m not so willing to engage with consulting agencies. I find it very difficult to deliver a good product with an added degree of removal from the final customer, which is how some of those agencies structure work in order to maintain their business.

[JamesSwift]

When you say "Be willing to work with consulting agencies and accept their markup on your rate.", are you saying that they should pass on your cost to the customer? Or do you advocate reducing your rate to acknowledge the customer-acquisition-cost of the agency?

I've struggled with this myself. I am firm on my rate, but I also haven't really considered that it might make sense to reduce it in the case that someone else is finding the clients.

[BigBalli]

I agree with everything except "Bill hourly". A client wants a benefit, not x lines of code. Charge them for the value you deliver.

The few hourly projects I agreed to when I first started were always a challenge because I had an incentive to not go full speed which then ended up killing the enjoyment of loving what I do.

[maratd]

You should be flexible enough to bill in whatever manner that works best for the work at hand, the client, and most importantly, yourself. If the job requires hourly billing, don't pass it up because "I don't bill hourly". With some clients, you simply won't get them past that and it's up to you to make it work anyway, for both of you.

I agree, you should push clients away from hourly billing, but sometimes it's not possible and it's not worth losing an opportunity over.

You can propose to "sell" a fixed number of hours every two weeks or month, then allocate those hours when you estimate, without forcing you to keep a timer open while you work.

Yes, it's a compromise, you're not selling value, but you're not exactly selling time either and you have sufficient incentive to be productive.

Please let's not pretend that there is an infinite amount of opportunities out there and it's just a matter of your grabbing the right one. You need to keep money rolling in every month and you take what's in front of you, making the best of it.

[amelius]

> It takes an extraordinary amount of effort to find customers.

Aren't there services to help with that?

[zenpaul]

Yes, the consulting agencies or headhunters do just that. They do the day to day work of talking to hiring managers. Then they take their cut either when they place someone full-time or take a cut out of the hourly consulting rate.

It varies from place to place, but in the NYC metro area it is common for companies to only staff up through agencies so there is no chance to go directly to companies unless you know someone inside the company already.

[kartickv]

Like?

It will help me, so thanks in advance.

[zerr]

What about creating own agency?