Consulting on the side - dos, don'ts & protips
March 20, 2016 5:37 PM Subscribe
I'm considering doing some consulting work on the side, both to bring in additional income, and to get back into an industry I used to work in several years ago. If you've done something like this, I'd love to hear your advice.
I don't anticipate making enough money this way to give up my day job any time soon, so I'll have to confine it to nights and weekends. Maybe I'll be pleasantly surprised by how successful it is and I'll be able to make it my full-time gig, but that's not my current plan. For the record, I've checked and this doesn't violate any of my employer's policies.
I'm really looking for any advice at all from people who've done consulting in addition to a normal "day job." Things you did that worked well, things that didn't, things you wish you'd known. Please don't hold back.
Particular things I'm curious about:
I don't anticipate making enough money this way to give up my day job any time soon, so I'll have to confine it to nights and weekends. Maybe I'll be pleasantly surprised by how successful it is and I'll be able to make it my full-time gig, but that's not my current plan. For the record, I've checked and this doesn't violate any of my employer's policies.
I'm really looking for any advice at all from people who've done consulting in addition to a normal "day job." Things you did that worked well, things that didn't, things you wish you'd known. Please don't hold back.
Particular things I'm curious about:
- How do I make sure I don't take on so much work that I get burned out?
- How do I navigate clients' expectations about the times of day that I'm available (I need to draw a clear line, and not do any side work while I'm at my regular job)?
- How much can I advertise/publicly talk about this without making my boss worry that I'm looking to quit soon (I'm not)?
Best answer: I don't know what you do for consulting, but I'll tell you a few thints that improved my life greatly.
1. If you have a specific client and their cashflow is dodgy, charge a monthly retainer fee with guaranteed hours then have a separate hourly rate afterwards. Roll unused hours into the next month. This will help ensure your used efficiently and that they have a use and monly allocated time and budget for you.
2. Set your fee with cash terms, meaning have a fee for an invoice paid within 14-28 days of issue that favor on-time payment. I run with a 5% cash discount, which means that those that pay with credit effectively cover my cost of processing such payments.
3. Calculate out your fee such that you are covering the non-billable time that all jobs require, as well as make sure that you are counting on what you'll be paying in taxes at year end.
If possible pay yourself at months end after all expenses have been paid and you have allocated your tax reserve.
4. Regarding your contract work. If you don't have two cell phones, set up a Skype number to handle / screen any contract work issues. Clients will need to understand that you are available from X to Y time and that they can reach you them. Outside of those hours, you will contact them within 24 hours of leaving you a message. Minimum billable time should be 15 to 30 minutes or whatever is reasonable in your field.
posted by Nanukthedog at 7:40 PM on March 20, 2016 [2 favorites]
1. If you have a specific client and their cashflow is dodgy, charge a monthly retainer fee with guaranteed hours then have a separate hourly rate afterwards. Roll unused hours into the next month. This will help ensure your used efficiently and that they have a use and monly allocated time and budget for you.
2. Set your fee with cash terms, meaning have a fee for an invoice paid within 14-28 days of issue that favor on-time payment. I run with a 5% cash discount, which means that those that pay with credit effectively cover my cost of processing such payments.
3. Calculate out your fee such that you are covering the non-billable time that all jobs require, as well as make sure that you are counting on what you'll be paying in taxes at year end.
If possible pay yourself at months end after all expenses have been paid and you have allocated your tax reserve.
4. Regarding your contract work. If you don't have two cell phones, set up a Skype number to handle / screen any contract work issues. Clients will need to understand that you are available from X to Y time and that they can reach you them. Outside of those hours, you will contact them within 24 hours of leaving you a message. Minimum billable time should be 15 to 30 minutes or whatever is reasonable in your field.
posted by Nanukthedog at 7:40 PM on March 20, 2016 [2 favorites]
Don't talk about your side job at your day job, ever. Whatever your side gig is - school, consulting, coaching your kids soccer team, whatever - don't talk about it at your day job. Your day job gig should be blissfully unaware that you consult on the side.
posted by 26.2 at 8:17 PM on March 20, 2016
posted by 26.2 at 8:17 PM on March 20, 2016
First check your primary employment contract to see if there is an exclusivity clause preventing you from working a second job. Some contracts only forbid direct competition but others can exclude all other work even in a different field. These rules can vary by state.
Make sure there are no ethical conflicts such as working for the same clients as your employer or using information gathered from your first job.
Make a clean separation between the two jobs. Don't be answering calls or dealing with email from the second job while on the first job. And make sure you never use any resources of your employer for your second job.
posted by JackFlash at 1:20 AM on March 21, 2016 [1 favorite]
Make sure there are no ethical conflicts such as working for the same clients as your employer or using information gathered from your first job.
Make a clean separation between the two jobs. Don't be answering calls or dealing with email from the second job while on the first job. And make sure you never use any resources of your employer for your second job.
posted by JackFlash at 1:20 AM on March 21, 2016 [1 favorite]
Best answer: On dealing with your current employer.
I did not have any exclusivity written in my contract. I did however have a year of pay go south because the company had a bad year, not because my performance was poor. I used this, along with the on-the-job-training nature of my contract work to actually get approval from my boss - and he forced my boss's boss to be cool with it.
I learned a host of new skills that were directly transferable. I supplemented my income. My consulting hours were 100% outside of work hours. It worked.
Also, a year later, when I left and went to work for another company, I rolled out "I run a small consulting firm that does X which does not interfere with your industry" during the hiring process. By telling them at the start of employment, it allowed me to sidestep having it written into my contract that I couldn't do it, and even having it expressly written and (and widened) so that I could do it (and more). It also provides me with enough coverage that I can share directly with management above me some additional "best practices" that would otherwise be outside of my knowledge and I can site exactly how and why I know these things.
Point being: in first job, I knew exactly what the sell story needed to be in order to "win my freedom" and make it viable for them to know, me to be able to still show value, and for me to be able to make them want to say "yes". Once I had my sell story in place and the accompanying paperwork, I was able to translate that permission to new skills which I then translated into a different principal employment where I was unrestricted and completely above board with my consulting.
posted by Nanukthedog at 5:33 AM on March 21, 2016 [2 favorites]
I did not have any exclusivity written in my contract. I did however have a year of pay go south because the company had a bad year, not because my performance was poor. I used this, along with the on-the-job-training nature of my contract work to actually get approval from my boss - and he forced my boss's boss to be cool with it.
I learned a host of new skills that were directly transferable. I supplemented my income. My consulting hours were 100% outside of work hours. It worked.
Also, a year later, when I left and went to work for another company, I rolled out "I run a small consulting firm that does X which does not interfere with your industry" during the hiring process. By telling them at the start of employment, it allowed me to sidestep having it written into my contract that I couldn't do it, and even having it expressly written and (and widened) so that I could do it (and more). It also provides me with enough coverage that I can share directly with management above me some additional "best practices" that would otherwise be outside of my knowledge and I can site exactly how and why I know these things.
Point being: in first job, I knew exactly what the sell story needed to be in order to "win my freedom" and make it viable for them to know, me to be able to still show value, and for me to be able to make them want to say "yes". Once I had my sell story in place and the accompanying paperwork, I was able to translate that permission to new skills which I then translated into a different principal employment where I was unrestricted and completely above board with my consulting.
posted by Nanukthedog at 5:33 AM on March 21, 2016 [2 favorites]
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2. How flexible is your work schedule? Could you put in a few minutes here and there to update clients or answer short emails? If so, let them know. Tell them anything more involved will have to wait until whatever 'office hours' you set up for your consulting.
3. That's hard to answer without knowing your boss :) Could you just be upfront and explain you are planning to do this, but that you don't want to consult full-time, you really enjoy working there, etc? This is pretty common, especially in tech fields, and is not seen as a big deal as long as it's not interfering with getting your work done.
posted by ananci at 7:15 PM on March 20, 2016