Ask HN: Making the move to consulting; where does someone start?

[Fr0styMatt]

Hey guys, thought I'd post this question after much Googling. I'm a software dev who's just been made redundant from his job. I've often thought about becoming an independent contractor for various reasons and now seems like the right time to actually jump in and do it (especially with a bit of a redundancy payout as a buffer).

I'd like to hear from any Aussie folk who've made the switch and how they actually went about doing it. What was your first gig like? Any war stories? What are the actual mechanics of making the switch (requirements, where to find work, stuff like that).

Basically this is something I really want to give a shot, but I have no idea where to start :)

[keithwarren]

I am not an Aussie, but I did eat at an Outback Steakhouse last night!

Sorry.

In all seriousness I have been on my own for almost 15 years and I first made the leap by securing a contract from a client of my former employer. My employer was ok with it because they were moving in a different direction so the first step out the door was like having a job but I changed status from employee to contractor. The wonderful thing was the customer got me for cheaper than they were paying my employer and I got a big raise. Definition of a 'win-win'.

For most people you are going to have to get out there and do some sales work but what I suggest to people making this leap is to sell yourself to an agency, not individual customers. There are lots of consulting firms who need people and they are afraid to bring on full time work because their variations in work are often from contract to contract. If they land a gig for 4 people and 6 months of work yet only have 3 people they have to spend the time and money to go out and hire someone - then once the gig is done they have to keep that person busy. If they can find someone who will work on the project as a sub-contractor it is much more valuable to them.

Doing sub-contract work like this is a great way to give you steady income while you network and build a portfolio of direct customers where you can make better margins.

Another thing I would advise, realize that your rate represents a perceived value. If I tell you my rate is $40/hr then you think one thing - if I tell you my rate is $195 per hour you freak out, say that is crazy and then think - this guy must be amazing if people pay him that. It changes the mindset and even if you cannot get them signed at 195, it makes 150 sound like a bargain. The catch - you have to be worth it.

[Fr0styMatt]

Haha Outback Steakhouse is awesome :)

That's great that it worked out like that for you to start off with. Sub-contracting was something that I'd thought of - I really need to find my feet before going fully out on my own.

[Im_Talking]

I was a contractor for years and after some time at it I detested it. You get the contractor mentality where you only think of hours worked, and even on days where you are as sick as a dog, you haul yourself to work because... well, because it's 8 hours pay. Holidays become less and less because not only is it the cost of the holiday itself but it's the hours of pay you are missing out on. Double whammy. Plus there is no leverage... the only way to make more is to work more. And the businesses have no respect for contractors; they are the first to go. If you can treat the consultancy role as an interim solution between major gigs, then it's Ok. I think I used jobsearch.com.au and contracted via agencies.

My advise: switch focus to developing a product that you can sell.

[Fr0styMatt]

Thanks for the insight. I hadn't thought of the 'double whammy' thing exactly, but it mimics what I've seen other people who run their own business go through.

Developing my own product is part of my plan. One of the things that's pushing me in this direction is the whole "you have to sign all your free time away" IP restriction uncertainty that comes with being a tech employee.

[taprun]

I'm not an Aussie, but I saw two films starring Paul Hogan.

I'm trying to make this transition as well. I think it basically boils down to the following: Ask lots of people what their problems are (lead generation, paperwork and team coordination appear common themes), explain how you can help them out while using non-technical talk and then charge them. I'm hopefully going to start doing that next week.

[Fr0styMatt]

Awesome, good luck :)

I have an upcoming appointment with the career counselling place that work put me onto after the redundancy, so going to see if they can point me in the right direction with agencies, etc.