Comment by mooreds | Hacker News Reader

Comment by mooreds | Hacker News Reader

A friend (who has consulted for a long time) once said that there are three parts to being a successful consultant:

  * finding the work
  * doing the work
  * getting paid for the work

When you are an FTE, the only thing you have to focus on is doing the work. That's one of the reasons you get paid less as an FTE than as a consultant.

I've transitioned twice from FTE roles to long periods of consulting.

Things I'd consider if I was doing it now (some advice only applicable within the USA, sorry):

   * have savings. I think 12 months is too much, I'd probably aim for 6. If you have a house, open a HELOC now and draw it down. 
   * more important than the number of months is your comfort with your runway and your planning on how to exit consulting if things don't go well. Don't wait until you have no money left to apply for jobs. 
   * if you want to buy a home, talk to a mortgage lender while still employed and see what the options are for self employed folks. When I last checked (years ago) you needed to have two years of self employment income to qualify for a mortgage.
   * Depending on your skills, you may be able to find part time work pretty easily. For instance, if you are devops person and want to do training, there are opportunities out there. Training on cutting edge tech, if you like to teach, pairs quite nicely with consulting.
   * Reach out to past colleagues and ask if they have any needs for extra hands. These folks who know you will be a great source of work and you won't have to spend as much effort selling them--they know you are great.
   * cut your costs now. If you aren't watching your finances closely, take a look and plug any leaks.
   * discuss the risk/reward with your family, if you have one. You'll be taking on additional risk and stress. Don't have that be a surprise.
   * start a blog about your specialized business if you haven't already. This is a great way to 1) showcase your expertise in a scalable manner and 2) keep you on top of your game, since you'll be researching to write the posts.

Best of luck!

I was on my own for 14 years.

Yes, doing the work and selling the work and getting paid are 3 different jobs.

It is possible to build a sustainable business on top of 90 day engagements. I don’t recommend it, but it is possible.

You need to consider yourself a small business. Not a freelancer, not a consultant, but a small business.

Get a good accountant to keep you um…accountable.

Alan Weiss is my favorite author on how to run a high margin solo business.

I never had the guts or expertise to do value based pricing, but that is certainly an intriguing path.

The "value based pricing" book was great. Here's a nice "hot take": https://www.alanweiss.com/styles/pdf/The%20Case%20for%20Valu...

Which works by Weiss would you recommend first? Thanks!

* Million Dollar Consulting

* Value-Based Fees

* Million Dollar Consulting Proposals

Any one of those will have bits of the other two in it. MDC establishes the mindset, the other two are deep dives into setting fees & drafting proposals the learnings in both of which served me very well.

I was on my own for 15 years (ending in 2019). It was a great ride, and if factors outside the business itself hadn't put the brakes on it I'd still be doing it today.

re: sustainable business on short engagements - I had a mix of long-term contracts and short-term gigs. The short term gigs were the most fun, but most stressful, so I always tried to bill them at the highest rate (and didn't mind if I didn't get the gig because I was bidding too high). I valued the long-term gigs tremendously for the "stability" they provided.

Having a diversity of Customers was the key to my piece-of-mind. As long as I didn't do something so bad that my name would appear in the newspaper I knew I could screw-up with one or more Customers and still have a livelihood, even if I did have to tighten the belt for awhile.

I can't agree w/ the statement re: considering yourself a small business enough.

Definitely have an accountant. Learn bookkeeping if you want to minimize accountant expense. Take a 100-level college accounting class and you'll know enough for a solo venture.

Oh yeah, one more USA specific thing. Factor in health insurance costs. A catastrophic or high deductible plan is probably a good option, but the right plan depends on your circumstances. Don't forget it though.

This is a hard one for me. My wife and I want/need a good plan. One that doesn't require us to get referrals, and has good coverage for medication. I would happily pay for this plan, but I can't seem to find one on my own. Nothing is comparable to what I currently have through my employer.

If you're in the US, have you explored https://healthcare.gov ?

In the US, decent health insurance plans are all corporate. Particularly if you want something non-HMO with reasonable out-of-state coverage.

A few states have laws on the books which compel health insurance companies there to sell corporate health insurance plans to sole proprietors and single member LLCs. Florida is one example.

(Florida also tends to have some of the best health insurance options in general in the US, at least as of several years ago.)

Sadly, just because the state law says health insurers must sell corporate plans to sole proprietors and single member LLCs doesn’t mean those health insurers will happily sell you a corporate plan without a fight. For example, I tried to buy a corporate health insurance plan via a Florida sole proprietorship, per the state law. Every Florida insurer I contacted refused to sell me a corporate plan.

I ended up calling the FL regulators who ensured me Florida law indeed does compel these companies to sell me the plan. They either just didn’t want to sell me the plan, or their corporate division was entirely unfamiliar with working with sole proprietors. I left the US shortly thereafter.

If I were in the US, I’d try for a corporate plan again, maybe even in Florida. Unless something has changed, the alternative is far worse. E.g. paying $600+ per month for a plan with essentially zero out-of-state coverage, a deductible so high it almost makes no sense to even have the insurance plan at all for a healthy young person, and a bunch of weasely out clauses that let them screw you over even if you pay them ludicrous sums of money. Plus if you’re on an individual plan, the health insurers tend to systematically deprioritize you compared to their corporate customers who have far more bargaining power than you do. I would sooner go uninsured, or leave the US entirely.

This can't be stated strongly enough: You must have the stomach for dealing with a lot more "medical billing B.S." if you're going to purchase a high deductible health insurance plan.

I was on an individual HDHP for nearly 20 years (pre and post-ACA) and it maddening trying to explain to medical professionals that I actually cared about the cost of treatments. (Never mind trying to get cost estimates before treatments-- that's nearly impossible.)

I once found myself nearly begging an ER physician to order a specific lower-cost diagnostic test in lieu of the higher-cost test she wanted to order. She couldn't seem to believe that I had a low 5-figure deductible and that I cared about the cost of treatments. She was incredulous. That's happened multiple times.

(If you have children and you talk to medical professionals about pricing be prepared to be treated like a bad parent who places economic value over their child's well-being.)

> * if you want to buy a home, talk to a mortgage lender while still employed and see what the options are for self employed folks. When I last checked (years ago) you needed to have two years of self employment income to qualify for a mortgage.

This is still true per the lenders I've talked to as of late last year.

I'd add a 4th as there is getting the money to your company then getting it to you as tax efficiently as possible. This normally involves waiting for year end or pension

I think that's a great thing to think about when you are established.

A bit of overkill/premature optimization when you are starting, though.

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