Soon to be college grad doing IT consulting? That's either a great idea or a terrible one, and I have no idea which.
January 26, 2010 10:21 PM   Subscribe

How does somebody break into professional consulting, especially IT consulting? How do you get clients? Should I even do it?

So I'm about to graduate in May and am at a cross-roads with what to do with my life.

I'm about to get a degree in Computer Information Systems and have 6 years of really good, but mostly part-time, IT experience. I'm very good at what I do, and I really enjoy doing it. I have a long list of past employers/coworkers who will vouch for this. If I could work for myself, I think I would be very happy. But could it ever possibly work? Here are my main concerns:

1) How do you find work? I imagine this applies to any professional service, such as accountants, etc. While I know a lot of people, and am ok at networking, I'm an Introvert with a capital I. I'll be honest, if I have to do a lot of selling/networking to find work, this is definitely Not For Me. I can do it in small doses, but if this is a major part of the consultant package, no thanks.

I got a lot of contracting work last year that I didn't seek and that I (unfortunately) had to turn down at the time. If people just came to me looking for my services and I only rarely had to "sell" myself, that would just about be ideal. How do I cultivate it so most people come to me? It's one thing to have a few projects here and there, but is there anyway that this can be somehow setup to sustain me?

2) I am ok with occasional help desk work, but prefer sysadmin duties and other higher level work. I certainly want to target my services to businesses and not homes. However, I'm not sure I have enough experience in anything to be able to say that I specialize in x. So providing specialized consulting to small IT departments is probably out. How can I keep from spending all my time being a help-desk lackey? This probably depends on my hourly rate, if it's high, they won't want me doing "simple" stuff. But how do I position my skills if I can't really specialize?

(I do have the chops to specialize in web related coding work, but web developers are a dime a dozen, and I really would only want that to be a small portion of my time, it's not what I enjoy.)

3) If I decide 3 years from now this is no longer for me, how hard is it to transition into corporate life? Will being out of the game for that long really hurt me and make me less competitive with my fellow job seekers?

I do have a very flexible half-time (IT) job now that I'm sure I can keep if I decide to do consulting on the side. This will help even out my income and give me a little extra certainty. But still, trying to fill the other half with work I find on my own seems really daunting. Please either reassure me it's going to be ok, or tell me I'm crazy for even thinking of this in this economy!
posted by icebourg to Work & Money (8 answers total) 3 users marked this as a favorite
1) Do not do consulting until you have done operations, and really high end IT consulting is not for people who are truly introverted. I'm serious. Contracting is ok if you're introverted, consulting takes a whole different type of mentality and customer contact. There _is_ a difference.

2) If you can't say you're an expert in something, you're not an expert in it, you need more experience. You get out low level operations stuff by graduating to more complex operations stuff, to graduating to non operations stuff. The high end IT consulting field isn't very large and it's crammed full of people who have been doing it for 10 years and have buckets of experience. So work on getting the experience.

3) I've got news for you, IT consulting _is_ corporate life. The vast overwhelming majority of consultants come from large companies who have specific practices and methodologies, it's a business.

I've been doing this stuff for nearly 15 years, I've run operations teams, consulting teams, the business end and done independent contracting. The most important thing is a depth of experience, and working your way through operations is literally the best way to get it. Good luck!
posted by iamabot at 10:30 PM on January 26, 2010 [1 favorite]

Response by poster: Just to clarify, I'm not looking to break into the high-end. I know I'd be out of my league at that point. But I also do not want to be bottom rung either.

So to clarify, my main question is: is there demand for that type of middle ground, especially among small business? And if there is, how can I capture it without spending most of my time selling/networking/other social things I can do and do well but only in small doses?
posted by icebourg at 10:45 PM on January 26, 2010

There is definitely a demand for competent mid-range systems administration work out there. The biggest challenge you will face is selling your services, it will be doubly hard as a capital I introvert.

Some places to start might be craigslist in your area. You may also want to hit up friends and family - chances are they work in places with computers, and are likely having computer related problems at work.

good luck!
posted by askmehow at 10:54 PM on January 26, 2010

There are basically two ways to do any sort of consulting, from business process to management to IT. You can either be an independent operator, or you can work for a consultancy. (Sometimes you'll hear this referred to as "working 1099" and "working W2"; the former is as an independent contractor and the latter is as a regular employee.) Each has its advantages and disadvantages.

If you work for yourself, you are your own boss. You get to work from home ("get to" in the sense that you probably won't be able to afford an office for a while), basically set your own hours, and you won't have a lot of overhead costs coming between your bill rate and your take-home pay. Of course, you'll also need to find your own clients, manage the relationship and do all the paperwork, deal with the inevitable non-payment or slow payments, pay atrocious amounts for self-employed healthcare, have complex taxes, and of course absorb the risk and possibly have to live off your savings if you can't find a client.

If you go to work for a consultancy, you're someone else's employee. This means they'll pimp you out at a much higher bill rate than you actually see in benefits, because the difference is their profit margin. E.g., you might bill out at $90/hr., but only get a salary equal to $25/hr in cash. However, you'll probably have access to a better health plan than you could get as an independent contractor, which could be worth half of your total compensation. There might also be employer-matched 401k programs and other perks. Your employer will do the dirty work of setting up contracts, finding clients, sending them dunning letters when they don't pay up, etc. And, perhaps most importantly, your employer will have a "bench" — they will essentially float you, by continuing to pay your salary, even when you're between clients. (For a while. Consultants who spend a lot of time benched usually end up unemployed before too long. But I'm talking about just a few days or weeks here and there.)

So there's an obvious tradeoff — as a 1099, you can make a lot more money, but you have to pound the pavement and take all the risks associated with being a small business yourself. If you're a W-2 on some consultancy's payroll, they take the bulk of the risk, you get a steady paycheck, but they take a big cut of your bill rate.

My personal recommendation would be, unless you want to end up doing a lot of low-level PC support and helpdesk stuff, that you find a good consultancy to join for a while. That will let you play in the big leagues and get experience a lot faster than if you just try to hang up a shingle right out of college. Nobody — that I've run into, anyway — is going to let someone fresh out of school, working purely on their own, come in and tinker or design a new mission-critical financial system. But companies hire consultancies who hire kids fresh out of school to do stuff like that all the time.

Do that for a few years, until you've built up a solid resume and some good relationships with clients ... and you'll be in a good position to strike out on your own. There's a whole separate can of worms in how best to split off from a consultancy, without creating the appearance of poaching, but it can certainly be done. Happens all the time.

By waiting until you have some business experience and client contacts, you'll also be in a better position to set yourself up as a legitimate business — with nice things like a line of credit. This will let you pay yourself, as well as potentially other employees, a regular salary and give you a cushion for those times when you're waiting on a client's check to clear. (Running a business without access to a line of credit, or using a really expensive line of credit — god forbid a personal LoC or credit card — is how a lot of young entrepreneurs get themselves in real trouble.)

I'm, perhaps obviously, a fan of the W-2 route as an entry into consulting, for two reasons: one, I'm fairly risk-averse; two, I knew people who tried the independent route from the ground up, and it seemed unpleasant. (This was a while ago, so they were doing a lot of local-business web pages using Frontpage. Someone jokingly referred to it as the IT world's equivalent of "grinding.") To be blunt, I think that early on in your career, you will actually pay to be your own boss, because of the uncompensated risk you're forced to take on, and the loss of experience you'll have because of the difficulty in finding clients.

You need to decide how important being your own boss is to you; a few years working for someone else might net you some business skills and a solid resume that will put you in a better position to strike out on your own.
posted by Kadin2048 at 11:37 PM on January 26, 2010 [4 favorites]

Consulting is one third domain expertise (in this case, IT), one third communications, and one third marketing.

So only get into it if you're willing to spend 2/3 of your time and energy promoting yourself and politely explaining things to people.

If you don't like the sound of that (many don't), you will be happier in a big firm or firms as a smaller piece of a big team, either as a contractor or FTE.
posted by rokusan at 4:26 AM on January 27, 2010

I recommend spending a couple of years working at a real consulting firm to learn the business, make connections, meet clients and maybe learn a vertical (eg utilities, telecom, government, etc.)

Maybe try checking out some larger consulting firms like Accenture, Deloitte, etc.
posted by charlesv at 10:08 AM on January 27, 2010

I work for a consultancy and it's a lot easier than going on your own, for the reasons that Kadin goes into above. In my experience it would be easy to go on your own after a while in consultancy. A common route seems to be to work for 2-6 years then move out to self-management, using the contacts* and experience that you got from the consultancy. I plan to do so myself, but I would not consider it unless I had enough bank to live for a clear 12 months without a client.

* You will need to "sell yourself" and network. When I think about the people at my consultancy and the freelancers I meet, it occurs to me that all the introverts work for the consultancy.
posted by mjg123 at 2:15 PM on January 27, 2010

Also, the money in freelancing is not as good as it seems. I am paid £x/hour - my company charges around £3x/hr for me. This is not pure profit for them - they do a whole load of stuff, not least: sales, bids (inevitably many are unsuccessful), insurance, National Insurance, accountancy, gym membership, etc etc. Were I independent I would find it difficult to get £2.5x/hr, and I would have to do all the other crap myself (or pay someone else to do it). I may end up taking home £1.5x/hr, and a higher workload of stuff I don't enjoy.

Another thing is that the consultancy guarantees that if I do overtime, it will be paid (even if they are working a fixed-price contract, it's another hit they take) - you will not necessarily be able to negotiate this as a freelancer.

In summary, my recommendation: join a consultancy, find what you like and where your skills really are, do it for a while. You may find people start talking to you about working directly for them. If not, ask them.
posted by mjg123 at 2:48 PM on January 27, 2010

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