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Ask HN: What is your experience in tech consulting?

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Re: Ask HN: What is your experience in tech consulting?

#101

Post by achenatx »

been running my company for 23 years now and have friends that also have.

1) staying general works, but niching down works even better. My most successful friends found an up and coming technology partner and rode that wave.

2) most of my business year to year is grown in existing customers. Very little comes from new customers (90/10).

3) marketing/selling becomes much easier if you have a technology partner that is exploding like a rocket (e.g. chat gpt consulting?). Otherwise marketing/selling is mainly about producing content that drives leads. Presenting at conferences is probably one of the best ways we have driven business. But no one method drove enough business.

4) there is an inflection point around 4-7 people and at 30-40 people. at 4-7 you need to manage but the people arent quite generating enough money for you to not work on projects. It can be very hard to get past this point. At 30-40 you now need a layer of management and you have to develop them.

I really like the following sources that apply to consulting 1) so you want to be a consultant (whitepaper) 2) naked consulting 3) managing a professional services firm

Also really like 5 dysfunctions of a team. It isnt specifically geared towards consulting, but it is important as you get employees.

Re: Ask HN: What is your experience in tech consulting?

#102

Post by boring_twenties »

cik wrote: post #16

Just a few random thoughts from ~10+ years of doing this. These are not ordered, as I've been out of this for the past few years. - 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…

> - 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.

Wait, what?

I'm an FTE, never been a consultant. But personally, I would be ecstatic to give up 50% of my income in exchange for 6 months off per year.

Your numbers imply giving up only 21.875% of potential income, unless I'm mistaken. That seems like the mother of all no-brainers.

Re: Ask HN: What is your experience in tech consulting?

#103

Post by toyg »

davedx wrote: post #73
michaelt wrote: post #70

Earlier quoted context omitted.

> Try to focus on the kinds of customers you won't ask for down-payments and up-fronts --- the kinds of customers who will routinely delay a full quarter or two on payables, and you'll put up with it, because they're paying for several people's salaries, Must be nice to have so much money in the bank that not only can you pay 6 months of several people's salaries, but you can also tolerate the risk of the client not…

Yeah managing cashflows is a huge part of running a business. You really have to plan to deal with things like this because it will happen. This is exactly what revolving/lines of credit are for. Talk to your bank. Source: have seen a business growing who had to deal with this. There is no way - no way in hell - you can scale a real consultancy business using escrows and ditching clients as soon as they don't pay. It…

I think it's mostly an issue of trust.

- Customer says they can only pay in 6-months time? Ok, you will route around it.

- Customer says they will pay next month and then ghosts you for several months? That's not cool. Particularly when it's peanuts for them, in the grand scheme of things.

I was personally burnt by the latter scenario. It was only resolved when they reappeared almost a year later, after I had stopped consulting altogether, asking me to find some other guy to carry on; I replied that I couldn't honestly recommend my peers a customer that doesn't pay, and lo and behold, two weeks later the money came in.

Re: Ask HN: What is your experience in tech consulting?

#104

Post by boring_twenties »

intelVISA wrote: post #37
solresol wrote: post #6

Niches = riches. You want a super-tight thing that you do (e.g. "I fix performance issues for large NodeJS code bases", or better still "I write tooling to measure performance hotspots in NodeJS code bases".) Despite this sounding like cutting off potential customers, it doesn't work that way. Customers will reach out to you with some generic work that they want done "because I know you know NodeJS" even when you say…

I agree with the niche aspect but I also can't imagine clients using Node would be the types to worry about performance.

Not really a Node guy but I thought one of its selling points is being much more performant than other scripting languages, e.g. Python?

Re: Ask HN: What is your experience in tech consulting?

#106

Post by wglb »

masalachai wrote: post #50
tptacek wrote: post #20

Random bullets. * 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…

Good list but curious why you advise against doing conferences and conventions. The obvious benefit in my mind is advertising, potential clients, and most importantly, advertisable "credibility" on your website in the form of "Speaker at X conf". I'm not in the consulting business, however, and the list of benefits is speculative.

Conference booth presence can be an enormous time and resource cost. Giving talks is far better marketing.

Re: Ask HN: What is your experience in tech consulting?

#108

Post by Dork1234 »

cik wrote: post #16

Just a few random thoughts from ~10+ years of doing this. These are not ordered, as I've been out of this for the past few years. - 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…

Where does one go to find an Escrow provider? This would be really helpful for me to know the money is at least there with projects.

Re: Ask HN: What is your experience in tech consulting?

#109

Post by adamhp »

reuven wrote: post #90
adamhp wrote: post #88

Earlier quoted context omitted.

What does Python training involve? Workshops to large groups of people? Just an overview of the language or deeper dive? How long are the sessions? I've never even considered training or education as an option but I really do enjoy it.

Moving into training was the best decision I ever made for my consulting career. Better pay, better scheduling, and no bug reports! About 3/4 of my work is going onsite to companies, and teaching 10-20 people Python. I currently offer a bunch of courses, from "Python for non-programmers" to advanced Python workshops. These range in length from 90 minutes (what I call "microcourses") to 4-day sessions. The other 1/4 (…

Awesome, thanks for the reply!

Re: Ask HN: What is your experience in tech consulting?

#110

Post by ensemblehq »

michaelt wrote: post #100
davedx wrote: post #73

Earlier quoted context omitted.

Yeah managing cashflows is a huge part of running a business. You really have to plan to deal with things like this because it will happen. This is exactly what revolving/lines of credit are for. Talk to your bank. Source: have seen a business growing who had to deal with this. There is no way - no way in hell - you can scale a real consultancy business using escrows and ditching clients as soon as they don't pay. It…

> It's just not how most of the world works. By this, do you mean clients tend to insist on long payment terms in the contract? Or do you mean they'll sign a contract agreeing to pay in 30 days then they only actually pay after 90 days?

Most contracts are standard 30-90 days with large enterprises. And they do take a while to process given their large structure. Sometimes there are breaches of contract terms but as a smaller consultancy serving a large organization, you really don't have much leverage to force them to pay faster.

That being said, project continuity is huge with large organizations and if you're opportunistic, there's always something to be fixed. They also pay well and are more likely to pay. That's the tradeoff for slower payments.

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