Consulting: Some Practical Tips I Have Learned
I keep my bills paid as an independent technology/team/engineering consultant. I’ve noticed an interesting phenomenon that more people seem interested in learning about how to become a consultant rather than the actual work that I do.
There is a lot written online about the practical aspects of how to mechanically do consulting, but I thought I would share a few things that I’ve learned with my larger audience, as I find myself sharing some of these same nuggets repeatedly with various friends.
Some things I’ve learned about consulting
Here are some random thoughts a friend helped me notate on a call recently. They aren’t sorted in any particular order. Hope these are interesting or maybe even helpful.
Find a meta-game in consulting
What's your meta-game for consulting? It becomes a lot more fun when you know why you're doing it, beyond a paycheck, and what direction it's helping you head in.
There isn’t a right or wrong answer here, but I find having a reason other than “money” is very helpful for my personal mental well-being.
Some example reasons:
Putting a new skill into practice
Helping you pivot into a new industry
Helping you finance an additional project
Working with people you like
Should you Create an LLC?
I’ve only found one concrete benefit to starting an LLC. A Sole Proprietor LLC makes convincing landlords that you have a stable income easier.
Consulting Agreement
You'll likely send your consulting agreement (find templates online) to individuals and small startups, whereas big companies will send you their contracts. Look for IP clauses in others' contracts and make sure it says that they only own IP related to the statement of work and that there are basic payment terms that seem right
Setting Rates
When setting rates, you can experiment a bit and should expect at least 50% of folks to try to negotiate the price down. That's when you know you're likely at the right price. One way to think about rates is to find the average salary for someone doing that sort of work, get the hourly rate from that, and then multiply it by 2.5-3x. The multiple comes from reduced overhead, the convenience of hiring someone quickly, not getting equity and benefits, etc.
Try to create time-boxed contracts
It’s helpful to have contracts that have end dates (do up to a year if you want it to be long-term and renew at that mark). This is useful for legal reasons (contracts without ends are tough to legally enforce), but more than that, it creates a sense of a finite time with your client and generally makes getting things done easier.
Deliverables
When creating statements of work, I usually try to write them in terms of goals and activities, not specific deliverables (see below for some examples). This might not be what every client is looking for so feel free to disregard if it’s not your jam. However, I’ve always found that if we write out specific deliverables early, those tend to not align with what the client actually needs/wants after you dig into the problem a bit. Removing deliverables means you don’t have to re-sign contracts every time the goals change (which happens often in consulting) and generally makes for a better experience all around.
Example Deliverables ( I try to avoid these):
Write this particular document
Fix this one problem in the product
Example Goals and Activities ( I like to use these):
Review this companies product and fix issues as discussed with management
Review company strategy and author associated documents as determined to be useful with the team via a bi-weekly check-in
Marketing self
Marketing is a bit of a loaded word, but you have to be super clear that you're looking for contract work in emails and outreach to potential clients. I find creating content related to your field with a note at the bottom that you work as a consultant to be quite helpful. Get organized and takes notes about people you chat with due to this marketing.
Hourly Tracking & Invoices
It sounds boring but you need to track your hours to hold yourself accountable and also prove to your client that you are putting in the work. I know there are lots of software tools out there to do this, but I’ve found keeping it simple is usually best. I have a template in Notion where I track hours and create invoices now which works well (I previously used Google sheets and it worked equally well).
Be the Calm Expert in the Room
People are looking for you to be a calm, rational presence in the room or on the phone; that’s why they hired you. Project a therapist's energy and sense of presence. Be calm, and even-keeled, and get people to talk through their things with you. Take 5 min before each call to breathe because that's what they're paying for you to do. I often refer to consulting as “business- therapy”
Hope You Liked It
I hope you found this to be thought-provoking if you are considering a career as a contractor or maybe just interesting otherwise. Let me know what you think by shooting me an email or replying in the comments.
PS Hire Me
You probably got the message by now, but I am a consultant and you can hire me!
You can read a little bit more about what I do at the link below if you are interested.