As with any stage of my career since the dreaded Wendy's job (don't eat the chili), people have responded with both envy and disgust when I explain my consulting gig. Envy with, ' You get to make your own hours,' and disgust with 'you have to cancel your trip for a deadline?' And honestly, I don't think the average person has any idea what a consultant does every day.
To be fair, my 10 years of consulting have been so varied that it took me about half that time to understand the job myself. I also know from working with my consulting peers that the niche of work that I've carved for myself is very different from other freelancers in similar situations. However there are a few characteristics that seem to hold true for all of my colleagues which may shock other people.
SALES
First, let's talk what a consultant must do for his or her sales operation. I'll compare both side-by-side below:
| Consultant's Sales Cycle | Employee's Sales Cycle |
|---|---|
Identify client leads | Discuss a potential project |
Connect with client leads | Negotiate on the project's deliverables and dates. |
Discuss a potential project | Complete the work |
Quote on a given project | Get approval of work completed |
Negotiate on the quote's deliverables, dates, and prices | Negotiate a raise based on previous work |
Complete the consulting work | |
Get approval of consulting work completed | |
Send invoice including tracked expenses | |
Get paid |
It's important to note that a client can drop off at any step above without paying a dime and generating a total loss of time (including at step 8). Short of being fired, the employee will always see payment, even if their work results in a project that never gets started.
OVERHEAD
Next, let's look at the responsibilities of a consultant as compared against a full time employee. Again, there are similarities, but I will bold the tasks that can be completed on the clock for pay.
| Consultant's Responsibilities | Employee's responsibilities |
|---|---|
Completion of paid work | Completion of work |
Business Management (cash flow, setting prices, legal management) | Marketing (making bosses happy) |
Marketing (identifying and attracting clients, making clients happy) | Human Resources (insurance, retirement) |
Sales and Contracts (see above) | |
Human Resources (insurance, retirement) | |
Office Management (office, equipment, internet, supplies) | |
Accounting (invoicing, taxes, collections) |
When I began I had no idea how much time overhead would take. I spent over 20 hours per week at the start of my consultancy, mostly in sales and marketing. I now have systems and a client base well defined, yet it still takes me 5-10 hours per week. Of course the overhead is built into my billing rate, but how does one set their rate? (Stay tuned for a future article on that.)
RESOURCES
This article has focused thus far only on the tasks that are peripheral to the real work, but the lion's share of a consultant's time will be spent actually completing the project. There are differences here as well. Many consulting jobs are done in the consultant's own office, which can become lonely. Worse than the solitude is the lack of resources available. An office employee has the benefit of the company's earlier designs, manufacturing experience(s) and guidelines, MRP, component selection tools, and inventoried parts. Perhaps the best resource an employee enjoys is their fellow employees to bounce ideas off of and catch their mistakes. When a consultant hits a wall, their best resources are forums, Google, and the client's employees. Fellow members of the client's design team are likely the most important contact at the company for a consultant. They have the ability to make the job productive, the experience a lot of fun (or not), and may help with finding future work!
A CONSULTANT IS A COMPANY
The underlying point is this: with consulting it's all on you. That's why consultants are valuable to companies: you take care of everything yourself. You have to define your business. You have to sell. You have to negotiate contracts. You have to deliver a design that works and is safe. You have to take care of your retirement and insurance. You have to manage the books and chase down unpaid clients. (Keep up with this article series to learn more) The worst part is that if you are deficient in any of your tasks, the burden is yours alone. There is no marketer, manager, purchaser, accountant, or legal department behind you. God help any consultant if their design hurts someone.
I'm certain that there are many who read this article and it quiets the little voice in their head that says, 'This company is holding me back. I should go out on my own.' To those people, I suggest bookmarking this article and returning whenever the little voice needs quieted.
There are others who will read this article and see it in the same way a skydiver would see an open door of a plane. Normal people would not take this path, but those that accept the risks and challenges may find the experience empowering, exhilarating, and fulfilling. It may not be easy, but you'll be in good company.
James Benson is writing a series on 'Engineers As Consultants' to educate and encourage salaried engineers to consider if hanging a shingle is right for them. New posts on the first Monday of every month.
Pt. 1: So You Want To Be A Consultant
Pt. 2: How Do Engineers Find Consulting Gigs?
Pt. 3: How To Price Consulting Services?
Pt. 5: Finding The Best Client Mix
Pt. 6: How To Turn Down A Client
Pt. 7: How to Write a Client Acceptance Clause
Pt. 9: Taxes, Writeoffs, and Accounting
Pt. 10: When Subcontractors Quit
Pt. 11: When a Client Turns into a Deadbeat
Pt. 12: Getting Paid with Company Stock
Pt. 13: How to Assign IP Ownership in a Contract
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