Many people ask me about how to run a consulting business. While I've
only been doing it for a few years, I'm glad to share my experiences. For
more information about how I structure my business, see my Frequently Asked Questions about Tejas Software Consulting.
When I first decided I wanted to do "outside consulting" (consulting for companies other than my own), I started by working for a consulting firm. If you're not familiar with how a consulting business is structured, and you're nervous about the unpredictable paychecks that come with running your own business, this might be a good path for you, too. In fact, I was the poster boy for consulting firms in the article "Flying Solo: Is Consulting for You?" (Alyn Wambeke, Software Testing & Quality Engineering, September/October 2000, excerpt here). Personally, I'm happier now as an independent consultant, but the experience as an employee in a consulting firm gave me valuable experience.
Pretty much everything I know I've learned from the experts. Rather than repeating the basics here, I'll let you hear it straight from the experts. I found the book Getting Started in Consulting by Alan Weiss to be a very practical and comprehensive introduction. Also, Jerry Weinberg's Secrets of Consulting and More Secrets of Consulting give some priceless advice on how to act like a consultant, plus a few tips on how how to run the business (I wrote a review of More Secrets). When I needed some do-it-yourself legal help, I got Working for Yourself: Law and Taxes for Independent Contractors, Freelancers, and Consultants from Nolo (I got the elecronic edition). One on my reading list that I haven't gotten to yet is Flawless Consulting, 2nd edition by Peter Block
For online discussions, I've found the newsgroup alt.computer.consultants.moderated somewhat useful, to see what the average joe consultant and contractor has to say. The FAQ for this group has some useful information. You might want to join Jerry's SHAPE Forum, which often covers topics that are relevant to consultants. A web page I ran across with some very interesting information about consulting that generally agrees with my experiences is Technical Ranting, Raving, Editorials & Opinions at Stokely Consulting. It's about system administration, but the general concepts easily apply to any kind of consulting.
Most consulting business tends to come from referrals. So maintaining your
network is critical. See my article "Developing Your Professional
Network" for some advice. Besides networking and getting published,
my main marketing tool is an email newsletter that I send out about six times
a year. I try to keep the sales pitch very low-key, and I focus on simply
providing useful information. I don't fret about not having thousands of
people on the mailing list for my newsletter - everyone I add is someone
that I've had a meaningful interaction with. I feel that quality is better
than quantity.
Conventional wisdom says that you should have several months worth of salary
saved up before striking out as a consultant. In my case, I was actually
in debt when I started. My business was prompted by a layoff, so I didn't
have much choice about timing. Rather than look for another employer after
having two unsatisfactory experiences as an employee, I decided to take the
leap. It helped that someone had recently approached me about consulting
work, and I signed them on as my first client a week later. Still, I went
much further into debt before I finally dug my way out and started to build
an unemployment fund.
I feel that I've been very lucky so far. I'm going to need a lot more
luck in order to continue. Most consultants and consulting firms are struggling
in this economy. So you have to consider the very real possibility that you
will not succeed as a consultant. You'll have to decide for yourself what
the odds are. If you're in the software testing field, you can check out
the competition in the Testing
Contractors and Consultants List.
Hopefully you'll find this information helpful if you are considering becoming a consultant. And while you're at it why don't you join my newsletter mailing list so we can stay in touch? (click here) And if there's any way I could improve this page (or my business!), please contact me at faught@tejasconsulting.com.
Many thanks to Johanna Rothman for helping me both when I was first getting
started and also along the way, to Jerry Weinberg for teaching me many powerful
consulting skills, and the many other people in my network who have been instrumental
in helping me build my business.
-Danny Faught
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