Anyone self-employed as a consultant?

[fidgiegirl]

I have a consulting business idea but am unsure about many aspects of it.  I'm hoping if you are or every have been a self-employed consultant that you might be willing to help me learn more about it.

As loose prompts (goodness, don't feel pressure to respond to every question!  That'd be way too much!):

-If you are a self-employed consultant, how did you get into it?  Did it fall into your lap or did you have to beat the streets to find clients? 

-What do you specialize in, if you are comfortable sharing? 

-What have been the best and worst parts?

-What has been something that's was unforeseen - whether client expectations, needs, how you liked it, or anything else?

-How did you identify the need/market? 

-If you were/are doing your consulting in addition to working for someone else, and the two were closely related, did you and your employer have any issues with that, and if so, how did you rectify them?

-Anything else you see as important to know?

My idea relates to educational technology, really there aren't too many more details to share at this time and the idea is way too new to sustain facepunches - I need to flesh it out a bit more, hence this post.  :)  Thanks in advance for any insight you may be willing to offer.

[ShortInSeattle]

I have been a self employed consultant for 7 years.  As you know, most small businesses fail.  I started my biz at the same time as a dozen or so other smart people I know started theirs. Only one out of the dozen is still standing.

Consulting is awesome. I pick my clients and do rewarding work.  It's also tremendously difficult. I made no money for 2 years. These days I am doing well, but it's been a very slow climb. 

I see a lot of people play at consulting, then give up after a year or so.

My best advice is to interview others in your field, write a business plan, and do a ton of research.

What services will you offer?
How will you find clients?
Why should a company hire you?
What can you offer that is better or different than your competition?
How will you pay the bills while you are in start up mode?
Are you willing to work your tail off for a few years for little or no pay to get established?

Answering those questions is your starting place. Good luck. :)

[Insanity]

I am doing consulting/staff augmentation.  I do software security consulting (ranging from assisting companies in setting up software assurance programs to assisting with various aspects of that process -- architecture, static analysis, vulnerability assessments).

I am fortunate in that the field is extremely in high demand.

I fell into it.  Literally.  I was laid off and one of the possible positions was only willing to do a year long engagement as a 1099.  I was actually fighting it, but another position was a contract to hire and it never happened.

I like it.  I am able to work the hours I want to work and work from home (which has its advantages and disadvantages).  I can help my wife when she needs it during the day and make up the time in the evening.  Or I can take a day off and work over the weekend if we want to do something when the crowds are low.

But again, I was fortunate enough to fall into a high demand field where for some reason people don't want to hire full time anymore.

[Freedom2016]

I started doing consulting work (1099-MISC work) way back in 1996 while I was full-time employed in a similar-but-distinct industry. (I had great bosses that let me use sick time or take unpaid leave to pursue this other line of work - because it benefited them as well.) I "fell into" this new field after taking a university class that sparked my interest. I started hanging around the professors and practitioners who did this kind of work, and slowly began to get opportunities to do it myself.

My consulting gigs grew in scope and responsibility over the years, even while I worked in 2 separate full time jobs, and went to grad school. In 2005, I joined a firm in my consulting field. So no more consulting for a few years while I was a salaried employee.

Then I was promoted to be a partner in the firm (LLC), and went off of salary and started earning K-1 income. So functionally my work life today is very much like that of a consultant even though I'm part-owner of a firm now.

I specialize in negotiation.

Best part: autonomy and variety. I work with both public & private sector companies, & international organizations.
Worst part: feast or famine - i.e. the irregularity of client income. I took a big hit in 2008.

The need/market is easy: everybody negotiates. And a lot of people/organizations do it poorly. I have strong academic credentials and strong relationships with eminent people in my field, which helped open doors to cool opportunities, which in turn enabled me to develop lots of great experience to round out my credentials.

I'm good at managing client relationships but NOT naturally good at business development so that's a constant learning curve for me. Most of my work comes through word of mouth.

[kkbmustang]

I'm self-employed and have been for over a year. I love it. I love being my own boss and deciding when to take and when to decline work. I fell into it. I had a serious spinal issue (fusion of the spine) and was on disability. I negotiated a part time arrangement with my old employe, but it wasn't as profitable as developing my own clients would be. Now I have three steady, regular clients and a couple clients who bring me sporadic work. And I haven't been marketing hard. I work about 15 hours a week, which is just about all I can physically do given my back issues.

If I feel like I need more work, I will hit the pavement and start getting out there it doesn't usually take long for me to dig something up, but I'm knocking on wood.

[markbrynn]

I'm officially consulting and self-employed, but for now I'm pretty much doing similar jobs to what I used to do as a staff employee. So I don't have multiple clients at the same time, but work a full work week, in an office, on a project, for months at a time. Eventually I hope to work smaller pieces with multiple clients (at higher rates).

What I like:
1. I get paid to do a job, not to fill a seat. If I do it well then I get paid well (much more clear correlation than in a staff job).
2. I am not expected to be in love with the industry that I work in. In my old staff job, I always got vague criticisms in my reviews which I traced back to the fact that the job is not my life. I'm good at my job, I think it's fairly interesting, but not more interesting than my life outside of work.
3. More variety in my job due to new clients, locations, etc. Also, working in a smaller environment, you often get a chance to expand your skills. You can work on the edge of your current knowledge and learn from others as you go (depends on the type of consulting you do).

Advice on how to make it work:
Even though my job is not quite true consulting, I can pretty much assure you that networking will be key for you. I only need to find a client every 6 months (sometimes projects run even to 3-4 years), but if you do short assignments then you need quite a few clients. People tend to give work to people they know, trust or otherwise have a connection to. Pretty much all of my jobs (and all the best ones) have come via my network.

What you need to know:
You need to be able to negotiate. Nobody will look out for you when it comes to money. Your rates can be high or low and that will be either due to luck or skill. I recommend skill. Know what other people are charging. Don't be afraid to set reasonably high rates, but be prepared to defend them (and potentially drop them if you overestimate the market). Hopefully you start with some experience so you already know that you have something tangible to offer.

Understand the tax implications. If you don't have withholding anymore, then make sure you put your tax obligation aside as you go. Nothing worse than a massive tax bill of money that you've already spent. (happened to a friend of mine, was not pretty)

Good luck.

[fidgiegirl]

Thanks to everyone for the responses!  I hope more people will respond as well, but I just wanted to let you know I'm taking all your feedback into account.  Will post if anything comes of it . . . thanks again for taking the time.  It's been really helpful.

[bacchi]

- I fell into it. I was out of work and a friend needed to staff a project. I was a consultant for 8 years.

- I do software, mainly enterprise applications (that is, software apps that usually live behind the scenes and handle credit cards or mobile provisioning or whatnot).

- The best:

• The time off. If you structure it well, a contract will end and you'll have 4 weeks off before the next one.
• The 401k. A solo 401k is the most effective tool for savers.
• The hugely reduced BS. You're there to do a project, not worry about who's trying to fill that vacant VP spot.
• Different projects. You work on a domain/project for a year and then you move somewhere else.

The worst:

• You really have to stay current. If you continue to get the same jobs using the same tools, you'll get pigeonholed and the world will move past you.
• Sometimes the full timers won't like you. They'll see you as a replacement. If you're on-site, you may get a desk in the basement.
• Dealing with agency recruiters. They're often as slimy as salesmen at Vinny's Used Car Lot. If you can go 1099 or corp-to-corp instead, do it.
• If you're not 100% healthy, you'll have trouble finding an individual health insurance policy. This has been fixed with Obamacare.

- The need/market: I usually use the job boards to see what the latest skillset trend is.

-Regarding two jobs: This is my first time being 1099 and W2 at the same time. No one cares. You'll need to check the paperwork you sign though.

In software, there's little active "networking" involved. It's such a hot field that the next gig is already waiting and employers are clamoring for your attention. In the early 00's, with the dot bomb fallout, it was very different.