You're a man of the world, aren't you...I mean, er, you've er... you've been there haven't you... What's it like?

December 19, 2010 12:31 PM

I'm going to start consulting this summer - what will it be like? What should I know going in?

I will almost certainly join a small consulting firm this summer to work as an analyst (or possibly a project manager) for enterprise IT projects. What should I know before I take the dive?

-Are there things about being an hourly consultant (as opposed to a salaried employee) that I should know beforehand?
-I've worked with clients on similar projects when I worked for the vendor (see background below), and I'm used to working wit clients and travelling to client sites. But I haven't worked as a contract employee. Will the relationship be different this time?
-I have a few consulting firms that are interested in bringing me on board - What do I need to know about the consulting firm before I join?
-I'm going to talk to a CPA about how this will affect my finances and taxes - what questions should I be asking to get the full story?

This is purposely a little open-ended. I have several ex-coworkers who have made a similar move from the vendor side to consulting, and they all make it sound too easy - as if it's the same as our previous jobs (see background below). I'm having a tough time believing that there aren't any major differences, so I'd like to hear a little about what distinguishes being a consultant at a vendor from being a third party consultant.

Background: I'm an analyst with significant experience with a particular vendor's enterprise software. That software package is doing well and there's demand for consultants with my experience. I worked for the vendor for several years as a client-facing consulting analyst, and did a little PM work as well. I recently left that company, but since third-party consultants with my experience are in demand I will almost certainly join a consulting group when my non-compete with the vendor expires. For the sake of the question, assume that I'm monitoring demand in this area and will only make the jump if the demand is there. Some of my colleagues have recommended some smaller, specialty consulting firms to look into (including one run by a former coworker whom I trust), so I'm not particularly worried about finding the right firm to join, though thoughts about choosing a firm to work for are welcome.

posted by Tehhund to Work & Money (6 answers total)

You will be doing the same work, but you will be looked at differently. Not badly, just...differently. Contractors/consultants are on the team, but not part of the team, if that makes sense - depending on the company, you probably won't get to go to some team functions (like holiday luncheons and whatnot), all-employee meetings, and the like. This, incidentally, is why I became a contractor in the first place; there's much less corporate BS to wade through as a contract employee. If a sense of belonging to a group is important to your work life, though, consulting can be somewhat lonely.

As a consultant, you're judged almost solely on your work - there's no "evaluation process" or yearly review. You produce results or you're gone, and you're only as good as your last delivered work product. I really like this aspect of consultant work.

Also, this may sound obvious, but as an hourly employee, when you don't work you don't get paid - you don't have the PTO bank or the two weeks of vacation a year or whatever, so you can kinda dictate when you work and when you take time off. If you plan on taking a week's vacation, make sure to budget accordingly.
posted by pdb at 1:05 PM on December 19, 2010

Make sure you set aside taxes as you get paid!

I've been working as a contractor for over a year now, and the first year I got owned by me not thinking ahead and putting some money for taxes away. Having an IRS monthly payment liability over your head really puts a damper on your finances the next year.

I generally put away about 20%+ of my paycheck, but more wouldn't hurt, and if you end up saving too much, just push the extra into a savings account. Win Win.
posted by egranlund at 1:48 PM on December 19, 2010

This, incidentally, is why I became a contractor in the first place; there's much less corporate BS to wade through as a contract employee. If a sense of belonging to a group is important to your work life, though, consulting can be somewhat lonely.

This sounds wonderful. I don't need to feel like I'm part of a group, I need to feel like I'm doing something and getting paid for it.

you don't have the PTO bank or the two weeks of vacation a year or whatever, so you can kinda dictate when you work and when you take time off. If you plan on taking a week's vacation, make sure to budget accordingly.

I'd like to hear more about this - how far in advance do you let the client know that you're unavailable? I worry that I would be less in charge of my time off because the client would expect me to be on call for them. Is it really easier to dictate my time off?

egranlund, thanks for the tax advice.
posted by Tehhund at 2:25 PM on December 19, 2010

how far in advance do you let the client know that you're unavailable?

Just like as a full-time employee, the more notice the better - for things like planned vacations, I generally let my employers know as soon as I book it, so they can plan future work around my absences. If I just want to take a random Friday off or something, I generally try to let them know about a week in advance.

I have never felt like an employer expects me to be on call for them, which is nice - as long as you let them know in advance what your plans are as far as time off, and don't take a thousand random days off for no real reason, I have found they're generally pretty cool about letting me come and go as I please. Again, it really does come down to "did the work get done?" and if it did, employers won't really be bothered if you want to take the occasional day off.
posted by pdb at 2:50 PM on December 19, 2010

I recommend The Secrets of Consulting by Gerald Weinberg.

There's a continuum of non-employees, from consultants, who are hired to solve a problem, through contractors, who are hired to do a job, to temps, who are hired to do what they're told. Weinberg's book is more useful to consultants than to contractors or temps.
posted by Bruce H. at 3:33 PM on December 19, 2010

After consulting for nearly a decade I have learned:
--to get everything in writing, even if I am friends with whoever is hiring me
--to put money aside for taxes and pay my taxes on time
--that should all of my work come to a screeching halt, I am not eligible for unemployment
--to be meticulous about documentation and saving receipts
--to ask for what I am worth (my pay isn't equal to that of an employee because I have to pay my own health insurance, taxes, vacation pay, sick leave, etc)
--to have more than one client. If you look like an employee, act like an employee, and are treated like an employee, then you may very well be classified as an employee (which can have a significant impact on your client)
--to have an emergency fund (clients can go belly up with literally no notice)
--to not act like an employee (you can't get away with coming in late, leaving early, gossiping about the boss, etc, like an employee because you are a BUSINESS and everything you do impact's how people regard your business--and the likelihood that you will get future work!)
posted by MsKim at 6:22 PM on December 19, 2010