Ask HN: What is your experience in tech consulting?

You don’t get it. Some companies (bigger ones) have their accounting department operating independently from their development/IT department. This is not the case for small businesses which the OP is softly suggesting not to work with.

Clients with such departments will pay if your invoice is approved. The payment process is disconnected from the team you’ll be working with. It also happens that the team you work with will not care with the costs since it’s not coming out of pocket directly. The finance team, which will pay you, has no idea what you are doing exactly except that you are authorized for the payment.

The process is slow, so bear with it and price for the delay of the funds. But if you are a regular, it’s a constant flow.

Small businesses where the decisions making, IT and payment (ie: director of tech is also the CEO, is also paying out of pocket) will scrutinize much more on payments, and also miss a payment if they can (a surprising amount of people will try to do this).

Just a further comment on this -

As tptacek pointed out above, favours/karma can go a long way, so it’s not necessarily the case that you should never do anything for a discount or pro bono.

It’s a matter of setting the right expectation. If you’re doing a favour, make it clear that that’s what it is and what the limits are, and avoid letting that become the expected ongoing deal.

Some contrasting perspectives, three years in:

> Specialize

Or die.

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

Largely agreed, the hour is a bad unit which poses the potential for customers treating you as someone they can throw random time-wasting tasks at. I'd add, consider fixed/value pricing on certain projects. Particularly if/when you specialize, and as you take on tasks that are more close-ended (consulting, analysis, design, ie, anything that's not implementation) you may be able to shatter your rate ceiling this way. I've had projects where I've effectively 5x-10x'd my rate with fixed prices.

> 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

Worth reminding your customers in a casual chat explicitly (and tactfully, of course) if they raise an eye brow at your rates. I've done it and have brought potential customers back into the fold very quickly.

> Don’t hire a salesperson

Your mileage might vary on this one. I'm currently testing a playbook / sales process that I might be able to delegate in a few months... This can be further made easier if you've specialized properly. I've heard of some people having success with some degree of sales delegation, but I'll admit I have no experience with it. At any rate, I'd agree that you are always going to be Chief Sales Officer, unless maybe you form a partnership (ie, a proper company) with someone who takes on that role - and even then you'll still need to devote some degree of time to sales (going to critical meetings, etc.)

> Don’t waste time on your website design

Unless you're doing design-ey things, maybe. But regardless, don't make it utter crap either, there are so many consulting firms with off-putting websites that reek of lack of professionalism that offering a clean design might be a differentiation factor.

Yes on all points, with an exception that solves two problems at once.

Set a sliding scale of rates, based on how much they either commit to pay up front or pay timely over the past 6 months. In my shop it was a Service Plan, each one priced just under a common budget threshold. So a $9900 plan got a 5% rate discount, $24K 10%, $49K 15%, etc... (discounts not exact, make your own). If they pay that much up front, they immediately start on the discounted rate, if they just work up to it, they earn the step-down in rates as they pay bills on time passing each tier within 6 months. (Nothing wrong with using escrow too, but we never had it arise).

the cool thing about this is that it provides an immediate answer to the inevitable questions about getting discounts — instead of client trying to beat you up on price, it becomes "of course, here's our discount plans, what works best for you?". I probably should have expected that, but it really surprised me at how thoroughly it banished those uncomfortable conversations.

I was given a tip about this type of billing by a random guy in a hall conversation at a conference decades ago, and I wish i knew who it was to say "thank you", because that billing structure really paid off.

Also, emphasize "Your name is your bond.". Absolutely key to be reliable. The world is way smaller than it seems, and being a trusted provider goes a long way, in ways you can never predict. It is far more important than any kind of being flashy.

> Selling your time doesn't scale

a) It doesn't need to be your time exclusively

b) Time-based pricing is only one pricing model for consulting businesses.

I'd add that, funnily, I sometimes hear this from FTEs (who sell their time) or product entrepreneurs who eat ramen for five years and then have little to show other than the time they've spent on the product. Meanwhile, some consultancy owners make real bank... It's fine if your risk profile allows you to do product, but if it isn't obvious, a service business can be totally legit.