An entirely too honest/frank look at lessons learned from independent consulting

I’ve been so happy the last 6 weeks or so, working at 33 Sticks. Now that the dust has settled, I want to document some of the lessons I learned from my mere 5 months of independent consulting– it’s been a very enlightening experience, even though I’ve been a salaried-but-hourly-billable analytics implementation consultant for 10 of the last 12 years.

Here are a few other things being an independent consultant (taking primarily short-term work) has taught me:

  • The medical benefits system in the US is absolutely awful if you’re self-employed. Our only option was the exchange markets (aka obamacare)- only two insurance providers were available and one would require ditching all of our current healthcare providers. It ended up being about $1600/month to insure my relatively healthy family of 4, and that was a fairly mediocre plan. This doesn’t include the extra money/hassle we had to go through for our medications.
  • Setting up an LLC was really easy. Setting up a business bank account so I could sign checks made out to my LLC took a bit more effort, but it wasn’t bad (though it did catch me off guard- I should have known that that would be needed).
  • I haven’t had to do self-employment taxes yet, but I chose a weird year to start, what with Trump changing the tax plan (the IRS took a while to get their “how much income to withhold” calculator working for the new tax plan).
  • There are a lot of free/cheap tools for single-person companies out there- I use Asana (free), Everhour (free), Zoho Invoicing (it’s free to a point, and I prefered it to Everhour’s invoicing options), and Google Business (5/month- warning, the google business sync utility for Google Drive is even worse than the one for personal Google Drive accounts).
  • There is such a gap of implementation expertise in the digital analytics industry, there is no shortage of work out there to do. Work wasn’t hard to find. Finding the RIGHT work is the harder part- so many organizations are so short-handed that they look to outside consultants to fill some of those gaps, but it can be really hard to provide value in some of those situations. If you’re after a paycheck, there is plenty of that to go around… but if you’re fulfillment-needy like me, and need to know you are making a difference and providing value, you have to be a bit pickier about what work you take on.
  • Becoming truly profitable, and having the type of projects I want to be doing, would take time. Companies  looking for a full digital transformation are far less likely to come to a single independent consultant (though for many companies, a digital transformation is needed before the data could be really valuable).
  • Financially, it pays to remove the middle man, but not as much as you’d think. I was working in a wide range of rates, depending on the project, but $160-$225/hr seems a fairly normal rate for folks with my background. Of course, that doesn’t count what I spent on administration, branding/marketing, paperwork, etc… not to mention the lack of benefits (medical/dental/vision, time off, 401k). In the end, to keep the same income I was used to, I needed to do about two thirds the billable work (and had to deal with the unpredictable flow of money).
  • Sales/procurement processes are always slow. It doesn’t matter if the client is eager to start next Monday, and you’re ready to start next Monday- the client’s org will slow things down by at least 2 weeks- and even that is only if the client has put a fire under them.
  • Payment comes slowly. If a contract is “net-45” (ie, the client has 45 days to pay after being invoiced), it really means “the check will hopefully be in the mail by the 45th day”. I didn’t get my first check until 2.5 months into working, and I will continue getting checks until probably June for work wrapping up early in April.
  • Planning vacations or major future expenses is really hard. My husband and I are not exactly financial risk-takers, and since we never knew what checks would come in when, or when projects would start/end, it was very difficult for us to commit to a vacation a few months out.
  • Scoping projects and forecasting is hard. I’ve never been good at scoping. At Adobe, I’d be asked for my opinion on how long something would take to do, and I’d say “uh, 20 hours?” Then I’d see the final estimate that went to the client was for 120 hours, not 20. Turns out, though, I really am fairly efficient (heaven knows I’ve done this long enough), and rarely came even close to the amount of time the client was prepared to pay me for. The hourly billing model penalizes efficient work, and isn’t tied to value provided. On paper, I had 50+ hours of work I could do each week. In practice, unless I fudged the numbers (I didn’t), I was able to fill all of my client’s needs and then some, in maybe half of the expected time.
    • This confirms something the whole industry should keep in mind: you might pay more for senior/principal consultants, but odds are they will get through work much faster than their less-experienced peers, so you may save on hours billed. That is, if you are stuck on that pesky hourly billing model (see my thoughts on that model on the 33 sticks blog).
  • Even with that added flexibility, there are still not enough hours in the day.  I didn’t get even close to having the time to do all the productive things I wanted to do.
  • When you switch from salaried to hourly, and you are in charge of your own schedule, you start to see opportunity cost everywhere. “I slept 7 hours last night?! If I had been working instead, I could have made $1470 instead!!!” I’ve always had to do weekly timesheets and keep up my utilization rates (I have two awards on my shelf for being one of the most utilized consultants in Adobe consulting), but it had never made some a tangible difference to my family’s well-being.
  • I’d miss being around my peers. I had my clients, sure, but if I accomplished something I was proud of, I’d rush downstairs to tell the only people around to hear about it: my family. They’ve long since learned to not ask what I was excited about, they just say “yay, you did the thing!” It’s not quite the same as sharing with a peer. Thank heavens for twitter and #measure slack, so I can still bounce ideas off of peers and interact with humans who aren’t related to me.
  • Independence is hard for the anxiety-ridden (and I do have plenty of anxiety). I like to think I am a fairly independent/low-maintenance employee, and hope my previous employers would agree. But having absolutely no oversight was different. There was no one tell to me that the thing I was focusing on was indeed the best use of my time; no one to tell me that my work was stellar, satisfactory or still needed improvement; no one to justify things to if it didn’t go the way I hoped.

Conclusion

I had two main reasons for going independent:

  1. Freeing myself up so that if/when 33 Sticks was ready, I’d be available. Seriously, we’ve been trying to make this happen for years, and the timing was just never right. I wanted to make sure I didn’t miss a chance again.
  2. Having the flexibility/time to work on product ideas.

On both fronts, I’d say: mission accomplished! Clearly, the 33 Sticks thing is happening. And while on the product side, I haven’t released anything new since December, I was able to learn more server-side skills, so I could prototype out a few new product ideas. So progress has been made, even if I don’t have anything to publicly show for it.

But mostly, it was a very eye-opening experience: it’s nice to know now that it is an option for me, but that it probably won’t ever be my ideal working scenario. I’m very glad I had this short window of a new experience.

6 thoughts on “An entirely too honest/frank look at lessons learned from independent consulting

  1. You already know that I can completely relate to this article. Definitely pluses and minuses with independent consulting. I do not miss the oppty cost thoughts, which usually resulted in crappy vacations. I couldn’t fathom the idea of not billing all of those hours during my “time away from work.”

  2. Thanks for reminding me of the pitfalls of independent consulting. That was me for 10 years and I had so many of the same challenges.

  3. Thanks for sharing, this is all really interesting (even though I personally am not cut out for self-employment and am fine with that!)

  4. This has been the best read in months!! Thank you so much for sharing this! I quit yesterday and am just about to embark on that route. So thanks again!

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