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| “Start a freelance practice.” (comment) | ||
| recommended by 4 users | 2012 | tptacek on: Ask HN: How do I start being a consultant? | freelance & consulting | original thread | | ||
| tptacek on Jul 15, 2012 | on: Ask HN: How do I start being a consultant? | view on HN | ||
| 4 users recommended this comment. What they said: |
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patio11 Jan 6, 2017 | on: Ask HN: How should my startup handle accounting? | context
None of the following is accounting advice, but: Start moving all of your non-1099/etc expenses on to one or a small set of corporate cards. (They can be in your own name or that of the LLC; the main requirement is that they not have personal expenses on them. This is to simplify bookkeeping.) If your contractors routinely need reimbursements for e.g. purchasing SaaS to do their jobs, start using Expensify. Your goals here are a) collecting a receipt for everything in a fashion organized well enough to find any receipt the IRS queries you about and b) not failing to record any business expense. The impact of failing to record a business expense is you, personally, pay your marginal income tax rate on that expense -- that can be a painful hit. (Your marginal rate will plausibly be 50%+ when you add self-employment tax, NY income tax, and US income tax, so missing a $2k hotel stay is a $1k error for want of a minute worth of data entry.) Get an accountant, preferably one who works with other services firms (working with other devshops or design firms is a bonus but I'd not consider it a requirement). The first thing you'll ask the accountant to review is whether your 1099s will pass muster as 1099s. Major recurring questions to ask accountants include "Does our cash flow support adding a new team member right now?" and "How much should we have sitting in the bank ready for next April when taxes are due?" Some of the financial advice I'd give sounds less like financing and more like proper business management of a consultancy, like "charge more", "make sure you're charging clients at least 3X what you're paying your contractors", "aggressively solicit referrals and follow-on work", "offer clients a monthly retainer agreement to maintain their projects at a slight discount to your day rate on a use-it-or-lose-it-basis; this will give your shop some recurring revenue to smooth out consulting cashflow swings", and "build pipeline, build pipeline, build pipeline." See also this comment, which I think might be the most instrumentally useful one on HN: https://news.ycombinator.com/item?id=4247615 |
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glimcat Feb 27, 2014 | on: Freelance or job? | context
Have some skill where you can do X and it will cause money to happen for the client. Use existing knowledge of some narrowly specific type of business to give you intimate knowledge of the unique concerns those people have, how they talk about it, and what boundary conditions are going to affect which solutions do and don't fit well (e.g. gourmet pizza joints near college campuses, or heritage language schools to steal a previous patio11 example). If you don't have that sort of knowledge already, talk to people until you do. If you do have that sort of knowledge already, keep talking to people anyway because you still have plenty more to learn. Use knowledge of this specific customer to find, approach, and pitch clients who are a good match for your target customer. If you don't know how to find them, you don't know them yet. Then, pitch them: "You can have me do X which will cause money to happen for you." "I'm aware that you have concern_a and concern_b, which I will handle using specific_approach, whereas generic_person_235089 doesn't even have a clue about these important_issues." LISTEN to what they say, then use it to refine your ability to select potential clients and to improve your future pitches. Easy, easy, easy hack: remember the words they use to describe things and use EXACTLY those words when pitching them. Run 10 pitches, review, repeat with another 10 target customers. Make money. Then, go read tptacek's guide to scaling your practice: https://news.ycombinator.com/item?id=4247615 P.S. It's okay to be a generalist on the back end. It's not okay to be a generalist when you pitch. Address a clear, specific problem for a clear, specific target customer using clear, specific language which shows sensitivity to the issues as THEY see it and talk about it. 98% of people pitch by talking about things that are really their problems, not the client's problems. Actually, saying 2% of people clear that bar is probably being too generous. If you aren't sure, a good trick is to ONLY use language that you've heard come out of a customer's mouth. |
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trcollinson Sep 14, 2016 | on: Ask HN: What's your favorite HN post? | context
This isn't recent, but it is my favorite: |
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rpeden Feb 17, 2019 | on: Going Solo, Successfully | context
I believe you'll find that overall consensus on HN will strongly disagree with you on this point. Here's the post most people will direct you to for an explanation of why you'll want to avoid hourly billing, and how to get to a place where you don't need to bill hourly: https://news.ycombinator.com/item?id=4247615 For what it's worth - all of the people I know who have been able to do software-related consulting successfully over the long term don't bill hourly. They'd actually agree with you that having a minimum billable period of a week lots them lots of clients - but it lost them the clients that would try to nickel and dime them to death and complain about every invoice no matter low the hourly rate was. It sounds like your experience has been different though, so I'm happy to hear you've found something that works for you. |
(1) Start a freelance practice.
(2) Raise your rates.
(3) As you work for clients, keep a sharp eye for opportunities to build "specialty practices". If you get to work on a project involving Mongodb, spend some extra time and effort to get Mongodb under your belt. If you get a project for a law firm, spend some extra time thinking about how to develop applications that deal with contracts or boilerplates or PDF generation or document management.
(4) Raise your rates.
(5) Start refusing hourly-rate projects. Your new minimum billable increment is a day.
(6) Take end-to-end responsibility for the business objectives of whatever you build. This sounds fuzzy, like, "be able to talk in a board room", but it isn't! It's mechanically simple and you can do it immediately: Stop counting hours and days. Stop pushing back when your client changes scope. Your remedy for clients who abuse your flexibility with regards to scope is "stop working with that client". Some of your best clients will be abusive and you won't have that remedy. Oh well! Note: you are now a consultant.
(7) Hire one person at a reasonable salary. You are now responsible for their payroll and benefits. If you don't book enough work to pay both your take-home and their salary, you don't eat. In return: they don't get an automatic percentage of all the revenue of the company, nor does their salary automatically scale with your bill rate.
(8) You are now "senior" or "principal". Raise your rates.
(9) Generalize out from your specialties: Mongodb -> NoSQL -> highly scalable backends. Document management -> secure contract management.
(10) Raise your rates.
(11) You are now a top-tier consulting group compared to most of the market. Market yourself as such. Also: your rates are too low by probably about 40-60%.
Try to get it through your head: people who can simultaneously (a) crank out code (or arrange to have code cranked out) and (b) take responsibility for the business outcome of the problems that code is supposed to solve --- people who can speak both tech and biz --- are exceptionally rare. They shouldn't be; the language of business is mostly just elementary customer service, of the kind taught to entry level clerks at Nordstrom's. But they are, so if you can do that, raise your rates.