So you want to be a consultant…?
Why work 8 hours/day for someone else when you can work 16 hours/day for yourself?
I’ve been a consultant of one form or another since 2002 when I started my old company, with a friend from college, and actually did bits and pieces of consulting. I have been asked often about the business, and I decided to write this up.
Please note that I am providing observations from my own personal experience, but I am not providing tax or legal advice. You need to pay somebody for that, and I’m not qualified.
Different flavors of Consultants
There are many ways of structuring a self-employed practice, and I’ll touch on two that are at different ends of the spectrum. I only have my own experience to draw on, so these should be considered broad generalities rather than pigeonhole-type definitions. I have gotten substantial pushback on these definitions, so I urge you to take them only generally.
A “contractor” is typically hired for one project (via a “contract”), and the relationship is often more technical than personal. One is hired to write a communications controller, build a website, or modify some software, and at the end of the project: you’re done and you move on.
Most contractors work on one project at a time, which surely allows a great deal of focus, and though there is a often a bit of hanger-on work after the project has finished (say, helping the in-house staff integrate your work), once the contractor has moved on, the focus goes with him.
This is not to say that you won’t be back: doing a good job on the first project certainly means you’ll be given more consideration for a subsequent project, but it’s just as often a new project as opposed to working on the old one.
A “consultant” typically has multiple customers at a time, and it’s more about a long-term relationship than it is about a specific project. There will certainly be projects in the course of a consulting relationship, sometimes big ones, but the general idea here is that you’re an always-available resource they can call on for big matters or small. In a few cases, the IT department for several customers, and they use IT personnel so they don’t have to hire a dedicated person for it.
Unlike the contractor, this involves a lot of juggling when the fluctuating demands of multiple customers comes into play. It’s harder to get a deeper focus because of all the context swapping going on, but long term relationships are worth it in the long run.
I mainly operate as a traditional consultant, and though from time to time have done one-time projects on a contract basis, this paper mainly addresses the consulting relationship.