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Re: Consulting firm, job-based consultant, or hourly contractor?

by gloryhack (Deacon)
on Mar 17, 2007 at 18:03 UTC ( #605289=note: print w/replies, xml ) Need Help??

in reply to Consulting firm, job-based consultant, or hourly contractor?

The first two forms you mention are still working just fine to keep me busy, but I've only been at it since '96 so I'm still new enough to it that I could make a ridiculous terminal blunder any time now. (I've been in the "high tech industry" for 27 years, but transitioned into my current gig in '96.)

I believe that my business and yours are very much alike so I'll just approach the matter from that standpoint. My clients range from solo web designers or contract system administrators to Fortune 1000 corporations, with the majority being small companies whose annual sales are in the seven and low eight figures range. I've avoided the hourly consultant gig for the past nine years or so because I just don't like it, so I can't authoritatively address that aspect of the market.

Most @VLCS have in-house talent but their staffing levels are anorexic so they occasionally outsource projects that are too important to leave undone but not important enough to divert their in-house staff. (Coincidentally, a fellow monk just brought me such a contract with his Fortune 1000 employer, although our common ground was unknown until after the initial contact. Thanks, $FELLOW_MONK!) Larger consulting firms won't touch those smallish projects except as necessary evils because they can't cover their overhead with them, so there's opportunity for us small fish there. I don't actively pursue $VLC business but when the right deal comes over the threshold I'll gladly take it.

Non-tech start-ups and small companies (whose annual sales are in the $1M to $10M range) are my most profitable segment, and have been for right at six years now, ever since the dot-bomb. In this market class, you're more likely to deal directly with the executives and/or senior management, so you only have to explain your terms once -- if they're not comfortable unless they can see you every morning, you'll find out right up front and not waste a lot of time discovering that the relationship can't work. Most of my clients are referrals (made at that executive/senior management level), so they already know that I'm not likely to work in-house and any anti-small firm/one man band bias has been overcome before I hear from them. Usually they've already been sold on me by someone they trust, so they're not shopping around and they're not inclined to impose a bundle of restrictions upon me because they've seen what I've done for the client who referred them. And, eh, if it can't work out then it can't work out, thanks for calling and have a nice day.

So, while market forces might be driving some of our peers into suboptimal situations, there's still some opportunity out there to work the way I do and as I assume you do.

I gotta wonder about that "get paid if I deliver" bit. How's that working out for you? Have you not been stiffed by a shady client yet?

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Re^2: Consulting firm, job-based consultant, or hourly contractor?
by punch_card_don (Curate) on Mar 17, 2007 at 20:08 UTC
    Yes, does sound like similar business situations and similar stages in life. Fifteen or so years in R&D followed by this past decade in contract web development.

    I've had the luck these past 5 years of having a small stable of regular clients in that small-to-mid-sized category you mentioned. So no issues with shady clients. But in general my quotes include a payment schedule where interim payments are based on achieving a demonstrable technical milestone. On any sizeable project there is always a deposit and interim milestone payments, so that the finished product is never delivered with more than ~20% of the contract value remaining to be paid. Clients like the milestone system because they see progress, and know they only pay for what's been produced. I like it 'cause I can never get stiffed for much. Everyone wins.

    Referrals are always best - but are a problem for me. My particular clients seem more interested in keeping me to themselves. But they've grown to the point of probably making the leap to those large consulting firms soon - so it's time to start expanding my horizons.

    Good to read that the smallish job-based web development contracting company formula is still working for others. Also good to read confirmation that others in the same boat are finding their business in the same kind of target market. I'll be pursuing that first...

    Forget that fear of gravity,
    Get a little savagery in your life.
      My clients, too, for the most part try to keep me to themselves. But only for the most part -- there's one in particular who is one of those social/business networking types who sends referrals my way to ensure that I'll stay in business for the next time he requires my services.

      I wonder: Is there anything keeping you from growing your company's ability to match your client's increasing requirements?

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