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Ask HN: How do I start my own consulting firm?

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Re: Ask HN: How do I start my own consulting firm?

#71

Post by chrisrohlf »

I built and sold (acquihired) a small successful security consultancy from 2011-2014. My experience is seen through the lens of security consulting. I should really write all this down in a longer form but heres the important take aways in my experience and my answer to some of the questions listed.

1) Your tech skills matter less than you think they do. Customers want good work of course but they also need a reliable partner who will answer the phone and provide guidance beyond just handing over code or a report. Be professional above all else.

2) Don't fool yourself that you're only consulting while you build a product. Its two entirely separate types of businesses. If you try to do both you run the risk of doing them both poorly.

3) Figure out your growth plan before even thinking about a sales person. You probably wont need one for awhile.

4) Yes you want mentors, preferably people who have built something similar to what you're trying to build now. Even better if they failed at it.

5) Don't rush into subcontracting. You will lock yourself out of big contracts that way. Large companies want a varied list of vendors to choose from. Only do this when it makes strategic sense for your longer term plans.

A small consultancy is a great lifestyle business. Be realistic about your goals for it. Scaling up a consultancy is mostly limited by how many experts you can hire. And if you do your job right its only a matter of time before your best people start their own thing.

Re: Ask HN: How do I start my own consulting firm?

#72

Post by caherrerapa »

#2 You are in the right direction. Take your time to find the right first clients to define your niche.

#3 You must be profitable in the first couple months if you are doing services. It doesn't make sense to make a service business and not being profitable.

#4 At least a year before that.

#5 it's not as easy as it seems. But it's good u look to get out of non-recurring revenue.

As soon as you have your first decent client, you should commit full time otherwise your priorities are wrong (burn the bridges).

Quality and word of mouth sale more than a sales person if you are doing service. For a product it's a different story (mkt., sales, etc.). It's way harder with a product.

Partnerships never work, they are a big distraction and a way for your competitors to gain insights about your business. Focus on getting off the ground.

You need to define which niche you wanna target. You should have a network that knows what's your next move in order to make it work.

Started 3 years ago, going great, we are based in Bangkok with decent revenue. Successful internal products are elusive tho. Good luck with your next step.

Re: Ask HN: How do I start my own consulting firm?

#73

Post by adamqureshi »

nodesocket wrote: post #43

I just founded Elastic Byte (shameless plug https://elasticbyte.net ) which is a DevOps-as-a-service and infrastructure consulting startup. The biggest challenge in starting a consulting business is indeed building relationships and selling. It is very different than running my other company a traditional web SaaS. I'm spending lots of time in CRM (managing inbound leads), communication with leads, and setting up pho…

I have a TINY consultancy. I have a gig based set up. I am in NYC and there is a LOT of work here. I can't promise anything but maybe we should talk. I have maybe 3-4 clients who are growing and keep asking me about moving to AWS / DO manage infrastructure , etc...

Re: Ask HN: How do I start my own consulting firm?

#74

Post by PeterisP »

derefr wrote: post #51
PeterisP wrote: post #18

I'd rather go entirely opposite. 1. Get clients and start working for them. If you don't have more than one clear customer who already wants you, you're not ready for anything further in this list. 2. Incorporate and handle the core legal and financial stuff (only when #1 is solidly working!) 3. Setup the business processes and workflow; 4. Start aggressively looking for more projects - not online, though. The projec…

Here's a question—if you have > more than one clear customer who already wants you ...but they only want you as a full-time contractor (i.e. an employee-in-all-but-name), is there a good way to convince them to pay for your expertise on a consulting-as-needed basis instead? It's easy to "become a consultant" if what you really mean is signing on for fixed-length engagements to produce low-level piece-work (as e.g. an…

There's a big difference between a contractor and a consultant, and I'm not speaking about the difference between full time contracting and some variable hours contracting. In consulting you want to ensure an arms-length separation and work on a deliverables-only basis with the understanding that the deliverables can be worked on by your team, not exclusively you; i.e. that your hours, schedule, work environment, tools, software, work organization, who does what, how many and which people are involved, subcontracting, etc are all decided and managed by you with only reasonable limitations caused by requirements of confidentialty/NDA's and the billing setup. Of course, some tasks are a bad fit for that, and it's reasonable to want an employee or a full time contractor for that, but if you don't want that then you most likely shouldn't convince them, but you should accept that this task is not what you want - perhaps the same company will have other tasks later where they will want consulting services.

Yes, if you want to be in consulting business, that means that you have to work as if you were a consulting firm, even if you are a single person. It carries some overhead, so charge accordingly. Some form of incorporation tends to help and give an aura of being a larger team even if you're not, but for people who know you it only changes billing/legal/tax factors, not the job itself.

Yes, small businesses and startups are iffy about hiring consultants, and probably rightly so - the nature of such services simply isn't a good fit for them. Again, you shouldn't convince anyone, you should either accept that small businesses and startups won't be your target audience (and thus avoid networking with them but focus on larger companies who are actually likely to be customers) or discard the concept of consulting and accept to work as full time contractor or employee or co-founder or service provider or any other relationship style that works well for their situation.

Re: Ask HN: How do I start my own consulting firm?

#75

Post by ryanmarsh »

All of my colleagues who transitioned to running their own consulting firms did so by leveraging existing relationships with their employer's ex-clients. This is in conflict with every one of their non-competes. Since then they've built their businesses mostly on referrals. This is not what anyone would advise you to do but it's what I've seen pay the bills. YMMV.

Re: Ask HN: How do I start my own consulting firm?

#76

Post by amelius »

WhitneyLand wrote: post #26

Here are some things to consider about consulting: Sales/Selling is the last thing on your list and salesperson is only a maybe. Reverse all of your priorities because selling and relationships are the most difficult things to master for a consulting company and you will die without those skills. In consulting, tech talent To give you an example of this I once worked with a consultant who was a technical rock star, a…

> [•••] selling and relationships are the most difficult things to master for a consulting company and you will die without those skills.

How about outsourcing the sales part?

Re: Ask HN: How do I start my own consulting firm?

#77

Post by tedmiston »

Hey cosmorocket — I've gone on a similar endeavor last year starting my own full-time, one-man company focusing on contract software development. Most of my work is independent contracting vs freelance though I'm starting to experiment more. I'm also doing related work such as (paid) technical writing. Having this flexibility is perhaps the biggest advantage to me. So far all work is purely contracting, not consulting, though the terms seem to be thrown around interchangeably these days. My business website is sparse but is at [1] for reference.

I've found that finding clients is not as big of a challenge as envisioned. Marketing / sales / and all that turned out to be pretty irrelevant in my use case. I also didn't bother making a portfolio — my best work is private low-level backend dev that can't easily be shared and often not even discussed (this is a challenge). So far I've received most work based on personal reputation as opposed to any type of proposal or competitive process.

Partnerships are very helpful — being able to recommend a front end dev or graphic designer on a whim is a big service to your clients. This one I underestimated initially and am still working on developing a nice organized rolodex (and currently seeking software to simplify the approach).

Feel free to reach out if I can provide any other relevant thoughts from my experience (email in profile).

[1]: http://www.edmistonsoftware.com/

Re: Ask HN: How do I start my own consulting firm?

#78

Post by spydum »

amelius wrote: post #76
WhitneyLand wrote: post #26

Here are some things to consider about consulting: Sales/Selling is the last thing on your list and salesperson is only a maybe. Reverse all of your priorities because selling and relationships are the most difficult things to master for a consulting company and you will die without those skills. In consulting, tech talent To give you an example of this I once worked with a consultant who was a technical rock star, a…

> [•••] selling and relationships are the most difficult things to master for a consulting company and you will die without those skills. How about outsourcing the sales part?

The great irony in tech is that we all rail on tech outsourcing, but no qualms about it elsewhere (marketing, sales, finance, HR, etc). I get it if you aren't quite big enough for a full time person, but just remember incentives are usually against you.

Re: Ask HN: How do I start my own consulting firm?

#79

Post by PeterisP »

mzzter wrote: post #22
PeterisP wrote: post #18

I'd rather go entirely opposite. 1. Get clients and start working for them. If you don't have more than one clear customer who already wants you, you're not ready for anything further in this list. 2. Incorporate and handle the core legal and financial stuff (only when #1 is solidly working!) 3. Setup the business processes and workflow; 4. Start aggressively looking for more projects - not online, though. The projec…

Do you do consulting or work in a similar manner? Genuinely curious. I believe the steps you describe are relevant to other consulting domains, not just software.

I do some consulting; not a majority of my time but I work with some people who are fully in that business and I have a "company" i.e. separate legal entity made for these tasks, which is useful especially if I need to hire someone else for a bit of help on some task. Yes, the steps are absolutely generic but I believe that there shouldn't be anything specific to software consulting; the basis of how "renting expertise" business works is the same, no matter if that expertise is in software, hardware, consumer psychology or geology.

Re: Ask HN: How do I start my own consulting firm?

#80

Post by tedmiston »

spydum wrote: post #78
amelius wrote: post #76

Earlier quoted context omitted.

> [•••] selling and relationships are the most difficult things to master for a consulting company and you will die without those skills. How about outsourcing the sales part?

The great irony in tech is that we all rail on tech outsourcing, but no qualms about it elsewhere (marketing, sales, finance, HR, etc). I get it if you aren't quite big enough for a full time person, but just remember incentives are usually against you.

Outsourcing is a useful and necessary skill for entrepreneurs. Outsourced dev has a bad reputation overall but there are also good devs in other countries. That said most business work is far less complicated than dev work, and the risks of doing it wrong are lower.

If a dev turned entrepreneur values their time @ $100/hr and a 10-hour business task can be outsourced with a 15-minute description to someone else for $15/hr, it's the "right" decision.

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