Over the summer I did some independent consulting and learned a lot of secrets. Now I’ve got some more lessons learned. I won’t use names, and those who know who I’m talking about, please don’t take offense. These are lessons that you learn the hard way, but don’t let this discourage you…. LEARN FROM MY LESSONS. Don’t hate me because I share them. Talking to your independent consulting friends they may just sell you on the awesome flexibility.
Get on the preferred vendor list –
Ok, you’re an independent consultant and now you’ve got a customer who’s shown interest. They setup conference calls and you let them know your limited availability and your pricing. They tell you there is this preferred vendor list and you need to get on the list to get the gig. They pretty much assured you that they want YOU, but it’s company policy. So you get looped in with this subbing company that is on the list. They show some level of interest in what you’ve negotiated, but ultimately power over it, and tell you what their standards are, and Oh, by the way, you need to be on their list, to be a sub, you can’t be independent. What? Sub of a Sub? Yep, unless you want to JOIN this organization you need to be a contractor for this other organization. Oh, ok. How bad can that be. Guess what, they are saying the same thing. 3 nested deep? I don’t think so.
Make relationships with Consulting companies –
Ok, now you have paperwork for this top sub, the middle sub, and they all need faxed yesterday, and oh by the way, all those start dates that were discussed got incrementally pushed out. Not all at once where you could plan some other work, but a few days at a time where you think you’ve got work, but you don’t. There is nothing stopping a client from saying we want you for 3 months and then to take 2 months to get you to the day you’d start and then quit on you on the day you were suppose to arrive after you had your flight and everything.
Build a buffer and get an AMEX and have a plan to pay the AMEX when you don’t get paid (even better if you can get money from sub or get them to book EVERYTHING minimize out of pocket.) –
Now the customer has a date in mind for you to come out on site and do some work. Now you don’t have a corporate card or expense account for hotel, flight, food, etc… You are on your own dime, and when you go out with the other guys you feel bad when not paying for everybody, but it’s your own dime. Should you or shouldn’t you go to that Steak house? Of course it will ultimately be expensed, but when will you see the reimbursement and times are tight. The market just took a huge plunge.
Plan to NOT get paid like in forever –
Ok the gig went perfect as perfect as gigs go. Sure there was scope creep (that’s a different blog), and the project changed a few times, but the project owner seems happy. You’ve been putting in your hours. How come you haven’t gotten paid? The sub got the hours, and the sub of the sub got the hours… What’s up? Oh, they need an invoice. Great there’s a word template for that. So you bill, the sub of the sub and project closes and everyone seems happy. The effective rate seems a lot different than the original conversation, but that’s beyond the point. You need to get paid. So you use the template and fill it out with the hours (again) and the expenses, and send all the original receipts (kept copies phew!) and faxed them over. A couple weeks go by and you’re wondering what’s up. Ever heard of +Net 30 or Net 60? You thought you were going to get paid every 2 weeks, like you saw in some doc somewhere in how the subcontracting stuff works. Nope. They all decided not to bill until it all went through.
Follow up and Invoicing is key –
After the job you’ll get paid right? Nope, the Net 30 means they don’t have to pay you for 30 days after it’s all done. At 30 days you’re following up again. What’s up? What? You don’t like that I put who took me to their airport in my expense despite the policy that says if a friend takes you to the airport you can expense it. Oh they don’t like the word statement on the invoice. You’re in the middle of a move and trying to enjoy Christmas vacation, and you’ve got do dig up the old invoice and make those changes. Any more changes to be made? Who knows.
Keep TONS of copies of receipts ALL of them –
So a few weeks pass and you’re like… ok now what? The top sub didn’t get the expenses. What? I thought the sub of the sub would pass that kind of stuff on. Great. So now that we’re some 60+ days after the project is over, let alone the project starting like 6 months ago you haven’t gotten paid. Imagine trying to live off of jobs like this… Ok, you got paid or at least it seems like it, and now they are asking for another 1099 statement because the original was too blurry.
Referrals are Peachy (don’t count on them) if you do figure out how to get paid logistically
Oh, all those consulting or sales referrals you give where you get 5% or 10% for whatever work you send someone’s way. What incentive is there for them to actually pay you? In good will they want to pay you, but when it comes down to it… do you have a 1099 plan, did you send them an invoice, do you even know what to invoice? Of course you don’t. You’re MR Nice guy. Thanks for the work, but I forgot where it came from. Not easy to track, not easy to invoice.
You need some serious cushion and jobs that are paying you on a regular basis outside of gigs like this. You can make good money but the lead time is way more than anyone is talking about. Sure they want you to start on Monday, but bureaucracy will require a month, and when that month is up, budgets change and priorities change, and the person that wanted you is no longer in the same role or on the same project.
Don’t forget how much you love Taxes
Good luck on taxes this year… right? Still waiting for various 1099 income statements and who knows how to show what should shown as expenses and next year it would be quarterly reporting (Nice that they give you bye if you were W-2 the previous year.) Taxes every 4 months? Torture! Who would want that. I have enough receipts I have to keep track of as it is.
Welcome to independent consulting, the most free job… where you are boss, where you control your destiny?
No thanks. I’ll pass. It’s not the money or travel. It’s the sanity.