*Thinking* about being independent consultant

[BigDollaBill1234]

So I have been thinking about opening my own business as an independent consultant. I would like feedback from people that are/or used to be one. I just read the topic stupid things customers called for, and I want some of those billable hours, lol. Thanks.

 

[Steve Bailey]

I am one. I spent ten years as an applications engineer for a distributor of automation products during which I built up a critical mass of contacts that I could call on for gigs. The first thing you need to do is to make sure your family is on board with your decision. No job is worth forsaking your family for.

After that, know where your first gigs are going to come from before you set up your business and have enough money in reserve to get you through slack times. Watch your cash flow like a hawk and don't get sucked into being the bank for your customers. If you're going to supply any hardware as part of your projects, get paid for it up front. Be especially careful with projects for larger companies. All too often the time a company takes to pay is proportional to their size. Payment in 30 days seems to be getting more and more rare. One large corporation I deal with has terms of net 120 days, with a three and a half percent discount applied over a sliding scale from fifteen to 120 days. Fortunately for me, they have been taking the full discount and paying in fifteen days.

Contact a lawyer and an insurance agent before you set up your business. Most of your customers will insist that you carry insurance that protects them. Seriously consider carrying insurance that protects you. Once an injured worker accepts a worker's compensation settlement, they can't sue their employer, but there's nothing stopping them from suing you if you had anything to do with the equipment they were injured on.

 

[Tom Jenkins]

First, Steve hit the most important point - you work to support your family, and they come first. For you to make a go of it, they will be making sacrifices too.

Form an LLC or a sub-chapter S corporation to separate your personal assets from your business assets.

Get some good accounting software, learn the principles, and be absolutely anal about GOOD RECORDS.

I ran bare for years, but times have changed and Steve's comments on insurance are accurate. Almost all clients now require certificates of insurance. (Damn lawyers are ruining the country.) I did always carry workman's compensation - that is law in most states.

Be prepared for swings of the pendulum. Good times and bad will follow each other with regularity. Don't get discouraged.

Make it your firm, unbending policy to never accept projects that you are not qualified for. It is tempting to buy some groceries when you think "I can probably do that" but in the long run it won't be pretty.

 

[just the cowboy]

Pay your bills

There will be rough times till you get the hang of it. I just learned a lesson the hard way. Years ago I had to make some decisions about what bills to pay, I skipped my homeowners, I got dropped and could not get anyone to recover me, I just lost my house and everything I own. DO NOT LET business mix with your home life, and take time for your family, at least I made that decision correctly, just barely.
Everyone will tell you what worked I'll say what did not.

 

[geniusintraining]

Myself and several others have done it when we were members of this site in the past few years... if you have a job (full time) keep it, then move into your own slowly, do not borrow any money, find a niche market and build up from there

This is 2007 when I started on my own... http://www.plctalk.net/qanda/showthread.php?t=29767

I ran my business for about 2 years then went full time, now just about in my 10th and love it

 

[Tharon]

I ran my business for about 2 years then went full time, now just about in my 10th and love it

Just for clarificaiton, do you mean that you went into contracting for 2 years, and moved back to being a full time employee? Or that after 2 years of an "on the side" contracting, you left your previous full time job and moved to full time contracting?

 

[geniusintraining]

Or that after 2 years of an "on the side" contracting, you left your previous full time job and moved to full time contracting?

Yes, myself and several others have made the leap... this is the one when Jeff started and has been going strong ever since http://www.plctalk.net/qanda/showthread.php?t=56913

That said, I am now on the supply side.... either way on my own and love it