Ask HN: What is your experience in tech consulting?

Which is why you need airtight service agreements, and then the willingness to follow up on them. Obligatory video, "Fuck You, Pay Me": [https://www.youtube.com/watch?v=jVkLVRt6c1U]

I only ever had two customers (out of > 200) not pay in about 15 years. One got a lawyer letter and paid up. The other (new customer, and one I was warned to be wary of) I actually dragged to district court to receive a judgement. They then still wouldn't pay. I figured there was no one there I'd ever see again in my career... so I sent the sheriff. They wired payment within hours.

I'm not particularly inclined to do pro bono work in exchange for raising my profile (unless that work is of such a high profile that it would drive large numbers of CEOs to my door! This is very unlikely for the gigs I have seen).

- Contracts, contracts, contracts

- Immediately stop all work when any customer doesn't pay an amount owed. There's a natural inclination to keep going, but this is a firm of pathetic cost fallacy.

- Work with an escrow provider and eat the fees. You'll generally have a 10% non-collectable rate, until you work with an escrow provider. This can be lowered to 1-3%, meaning you stay far ahead. More importantly you reduce the time spent in administration, and running after customers.

- Downpayments / upfronts are key. Any customer that is unwilling to engage in this practice, is a customer likely to not pay.

- Maintain ownership of your code, if you can. True, consulting code has little value - usually. But sometimes, you can legally, reuse the same blocks, or segments across multiple projects. Your rate of return increases dramatically here.

- Your name is your bond. When people learn they can trust you, even in just a handshake (remember: contracts!) they happily recommend you to your friends

- Digitize it all. Do everything in your power, pay for every web service that makes sense, to reduce your overhead. I was incredibly happy to pay for receipt scanning (shoeboxes), book keeping / invoicing, and accounting (xero). Most people view this as an expensively monthly cost - which it is at the beginning. It will also, eventually cost less than an hour of your consulting time. Scale.

- Never price at the top of the market. It's better to be 100% busy at 80% of the fee structure, than it is to be 50% busy, at 125% of the base rate.

I charge more, specifically to keep 50% busy. One needs downtime. When you can deliver on time reliably and wrap it up nicely (documenting internals, design decisions, etc), you get repeat business.

* You need to be making 150-200% of your FTE rate to come out ahead in a year

* Bill daily, not hourly (you can bill weekly, or quarterly, too.)

* Raise your rates.

* Count on signing your clients master agreement, not yours

* You can win by getting every contract reviewed, or by just signing them blindly

* Specialize

* Incorporate; it's easy and cheap

* Keep your SOWs vague

* Don’t waste time on your website design (but do write)

* Do go nuts with your proposal design; pay someone to help you

* Target 80% utilization; past that, hire or jack your rates up

* Don’t work with clients you’d want a down payment from

* Don’t hire a salesperson

* Your availability on a calendar is worth money; so is your implied consent to be terminated on no notice; make sure you’re charging for it

* Get an accountant ASAP

* Do favors; karma works better than ads

* Don’t do conferences/conventions

* You can subcontract at first — most new consultants do — but get out of that quickly.

These are just things I think I learned over 15 years of doing this work; only some of them --- like never billing hourly --- are things I'd go to the mattresses over, but I think they're all generally correct.