Author Topic: For those who do PT consulting - how did you handle the transition?  (Read 11381 times)

Linea_Norway

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #50 on: March 08, 2018, 01:03:32 AM »
I'm a huge fan of David Fields' The Irresistible Consultant's Guide to Winning Clients. Despite the slightly-salesy title, I haven't found a more helpful book for beginning consultants. It completely changed the way I view what consulting is, how to connect with clients, etc. My field is in education and psychology - definitely not a natural business or salesperson  -- and this really fit with a more gentle style of connecting, proposing, and negotiating with clients.

Thanks for the recommendation.  The book is en route.

I also bought it on Kindle. It think it might be useful for myself if I ever do some consultancy.

Smokystache

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #51 on: March 08, 2018, 04:29:47 AM »
Loving this thread - but I almost didn't see it because I'm not close to FIRE or Post-Fire. You might post specific questions in the Entrepreneur section and I think you'll expand your responses (although many great one here).

I know you mentioned that your field generally requires proposals to show hours expected and hourly rates, but I would encourage you to think about larger projects or more specialized projects and using more value-based fees. I'm a huge fan of David Fields' The Irresistible Consultant's Guide to Winning Clients. Despite the slightly-salesy title, I haven't found a more helpful book for beginning consultants. It completely changed the way I view what consulting is, how to connect with clients, etc. My field is in education and psychology - definitely not a natural business or salesperson  -- and this really fit with a more gentle style of connecting, proposing, and negotiating with clients.

Thanks for the book recommendation, Smokystache.

Yes, I've thought maybe I should have put this thread somewhere else, as the post-fire sub-forum doesn't see a lot of activity.  I originally intended it specifically to get input from those who are FIREd and are only doing intermittent work, but I kind of steered the thread in a different direction when I brought up the tax consequences.

I hope others get as much out of it as I do (I reread in annually). I don't work for him or get a commission or anything, but he has regular emails/columns that are actually useful - although the "flavors" of consulting vary pretty widely.

Monkey Uncle

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #52 on: March 10, 2018, 04:19:56 AM »
After a little bit of haggling, I reached an agreement with the consulting firm on my hourly pay rate.  It's enough to equal my total compensation equivalent rate in my old job, but not enough to cover the adverse tax consequences.  So basically I've resigned myself to keeping 60% of the earnings, and hoping that we don't have a major health care issue that brings the increased deductible and OOP into play.

I'm not thrilled about taking this gig, but I feel like I need to do it just to keep up contacts and stay current in case something happens to the ACA after the mid-terms.  The project coincidentally ends around the time of the mid-terms, so I'll re-assess then and determine whether I need to pursue additional work.

AdrianC

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #53 on: March 13, 2018, 06:21:46 PM »
I'm hitting a bit of a snag with my opportunity.  The prime contract between the client and the consulting company includes some pretty hefty insurance requirements that are probably not going to be feasible for me.  I'm finding that insurance companies are quite reluctant to write a multi-million dollar liability policy for a guy who works out of his house and is just now in the process of starting up. 

Is it Errors and Omissions? That is expensive, if you can even get it.

General liability should be cheap. I have $3m through State Farm. Costs $325/year. Thatís all any of my clients have asked for.

Monkey Uncle

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #54 on: March 13, 2018, 06:37:28 PM »
I'm hitting a bit of a snag with my opportunity.  The prime contract between the client and the consulting company includes some pretty hefty insurance requirements that are probably not going to be feasible for me.  I'm finding that insurance companies are quite reluctant to write a multi-million dollar liability policy for a guy who works out of his house and is just now in the process of starting up. 

Is it Errors and Omissions? That is expensive, if you can even get it.

General liability should be cheap. I have $3m through State Farm. Costs $325/year. Thatís all any of my clients have asked for.

It's both.  I actually got a couple of quotes on errors and omissions, but no one would quote me liability.  The broker I was working with told me that none of the companies he uses would quote liability for a consultant in my field who does less than $100k annual revenue.  I tried State Farm also since I have all my personal insurance with them, but they would not quote me a policy either.

Linea_Norway

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #55 on: March 14, 2018, 03:05:37 AM »
I'm a huge fan of David Fields' The Irresistible Consultant's Guide to Winning Clients. Despite the slightly-salesy title, I haven't found a more helpful book for beginning consultants. It completely changed the way I view what consulting is, how to connect with clients, etc. My field is in education and psychology - definitely not a natural business or salesperson  -- and this really fit with a more gentle style of connecting, proposing, and negotiating with clients.

Thanks for the recommendation.  The book is en route.

I also bought it on Kindle. It think it might be useful for myself if I ever do some consultancy.

Currently reading it. Often I mention things that I read to DH, who has been working as a consultant in a big company for decades. And all I have been telling him so far was old news for him. Which is good, it means that DH probably is a very good consultant.

Strangely enough, I have been working as a consultant for a few years. But I wasn't taught anything about this. Only thing it that we got a talk about how to be a salesperson, in the sense of not being a sleazy salesperson, but being reliable and having a good relationship with the customer.

gerardc

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #56 on: March 14, 2018, 11:03:19 PM »
I'm hitting a bit of a snag with my opportunity.  The prime contract between the client and the consulting company includes some pretty hefty insurance requirements that are probably not going to be feasible for me.  I'm finding that insurance companies are quite reluctant to write a multi-million dollar liability policy for a guy who works out of his house and is just now in the process of starting up. 

Is it Errors and Omissions? That is expensive, if you can even get it.

General liability should be cheap. I have $3m through State Farm. Costs $325/year. Thatís all any of my clients have asked for.

Is "general liability" the same as an umbrella policy, or is it specifically for consultants/businesses?

AdrianC

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #57 on: March 15, 2018, 08:05:24 AM »
I'm hitting a bit of a snag with my opportunity.  The prime contract between the client and the consulting company includes some pretty hefty insurance requirements that are probably not going to be feasible for me.  I'm finding that insurance companies are quite reluctant to write a multi-million dollar liability policy for a guy who works out of his house and is just now in the process of starting up. 

Is it Errors and Omissions? That is expensive, if you can even get it.

General liability should be cheap. I have $3m through State Farm. Costs $325/year. Thatís all any of my clients have asked for.

Is "general liability" the same as an umbrella policy, or is it specifically for consultants/businesses?

It's specifically for businesses. If I understand correctly, it covers us for bodily injury or property damage caused by acts or omissions, by the operations of our business. Basically, I don't think it covers me for much that could actually happen, which is why it's so cheap. I buy it because my clients required me to.

bacchi

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #58 on: March 15, 2018, 09:30:34 AM »
I'm hitting a bit of a snag with my opportunity.  The prime contract between the client and the consulting company includes some pretty hefty insurance requirements that are probably not going to be feasible for me.  I'm finding that insurance companies are quite reluctant to write a multi-million dollar liability policy for a guy who works out of his house and is just now in the process of starting up. 

Is it Errors and Omissions? That is expensive, if you can even get it.

General liability should be cheap. I have $3m through State Farm. Costs $325/year. Thatís all any of my clients have asked for.

It's both.  I actually got a couple of quotes on errors and omissions, but no one would quote me liability.  The broker I was working with told me that none of the companies he uses would quote liability for a consultant in my field who does less than $100k annual revenue.  I tried State Farm also since I have all my personal insurance with them, but they would not quote me a policy either.

I have E&O through Geico for about $450 (Hiscox underwrites it, I believe) and Business General Liability is through Hartford (a local credit union is the agent) for about the same. My revenue last year was $15k and revenue this year will be about $60k. The only difference I can see is that I've been doing it for 10+ years. Are you in security?

Monkey Uncle

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #59 on: March 15, 2018, 06:45:20 PM »
I'm hitting a bit of a snag with my opportunity.  The prime contract between the client and the consulting company includes some pretty hefty insurance requirements that are probably not going to be feasible for me.  I'm finding that insurance companies are quite reluctant to write a multi-million dollar liability policy for a guy who works out of his house and is just now in the process of starting up. 

Is it Errors and Omissions? That is expensive, if you can even get it.

General liability should be cheap. I have $3m through State Farm. Costs $325/year. Thatís all any of my clients have asked for.

It's both.  I actually got a couple of quotes on errors and omissions, but no one would quote me liability.  The broker I was working with told me that none of the companies he uses would quote liability for a consultant in my field who does less than $100k annual revenue.  I tried State Farm also since I have all my personal insurance with them, but they would not quote me a policy either.

I have E&O through Geico for about $450 (Hiscox underwrites it, I believe) and Business General Liability is through Hartford (a local credit union is the agent) for about the same. My revenue last year was $15k and revenue this year will be about $60k. The only difference I can see is that I've been doing it for 10+ years. Are you in security?

No, I'm in an environmental/ecological field.  Most of what I would do as a consultant involves writing and talking about environmental permits.  About the only way I could cause physical injury or damage is to have a wreck on the way to a meeting.

I tried Hartford through their website.  Their policies also are underwritten by Hiscox, and they would not give me a quote.  I don't get it.

NAVRESLDO

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #60 on: December 25, 2019, 09:28:56 AM »
One more caution: be careful what you wish for.

Agreed.  My main client (70% of business) is undergoing a leadership change, with a new COO who is a cost-cutter.  I expect some slack off there.  I have 5 other clients with varying levels of business (from 1 day up to 4 weeks) and 3 more potential clients (that are limited by my availability).  So I have some diversification. 

I would be fine if I lost the big client.  My biggest client in year 1 had budget cutbacks and no business last year.  I never pressured them for work and I've let them know I am here if needed (decent chances in 2018).

Some good advice I received from mentors:
- Recognize that as an independent consultant, your first job is marketing.  Keep the pipeline full.
- Having strong relationships, positive results, and a constrained schedule makes you more desirable. 
- As demand increases, raise your rates.  Use that FI.  Find what the market will bear.
- Don't take work at low rates.  I'd rather have flexibility for other clients or time off for myself.
- It is better to do some free work for good clients (or marketing) then to try to be a low bidder for a job and set your rate.

Again, hopefully some of that is useful.  I'd be interested in what resonates with others.
Brief Update:  As mentioned above, the big client moved on, but no worries.  I've gained and lost several other clients and the number of billed weeks dropped from 28/26 in 2017/18 to only seven for 2019 (no money worries, I now can do some Roth conversions).  I just started with another new client but I am resisting the urge to work more.  I have ramped up more volunteer work (training Veterans) and that is more important to me. 

AdrianC

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #61 on: December 30, 2019, 11:54:47 AM »
Well done, NAVRESLDO.

I'll do a brief update too.

One more caution: be careful what you wish for.

I've done hardly any work the last two months or so. This morning I got a bunch of files for a project I promised an old client I'd work on. Oh boy.

Not excited.

So almost 2 years ago I wrote the above, and I did get sucked back in for 2018. Though I took a lot of weeks off, I still ended up doing an average of 47 hours/week billable, with a few 80+ weeks in there during project startup. I did get a couple of all expenses paid trips to Japan, which were very interesting.

I was determined NOT to work like that in 2019 and pretty much succeeded: average of 20 hours/week billable, including one overseas trip.

Goal for 2020 is less. Due to residual income from 2019, any more than 10 hours/week will tip us over the ACA subsidy cliff again...can't have that...first world and FIRE'd problems for sure.

Monkey Uncle

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Re: For those who do PT consulting - how did you handle the transition?
« Reply #62 on: December 30, 2019, 05:56:11 PM »
Well, I guess I ought to give an update, too, since I started the thread.  I wasn't able to swing the insurance requirements for a subcontractor, so I ended up becoming a part-time/temporary W-2 employee for the prime contractor.  I couldn't get the rate I wanted to charge when I thought I was going to be an independent contractor, but I also didn't have any overhead.  All in all, I'm glad it worked out that way, because I didn't end up working enough to justify the overhead of being a contractor.  I did about $2,200 worth of work in 2018 and about $900 in 2019.  I haven't billed any hours since August 2019.  And I'm totally fine with that, because I didn't really want a job anyway.