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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?

#91

Post by FpUser »

morog wrote: post #89
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…

Same for gov contracts. You might only get paid right at the end of the project + whatever their payment period is, but with an order number in your hand you know they will pay. Good luck getting a downpayment from big corp accounting depts if you're small fry.

I got downpayment from a company with about $100M revenue. Not sure if it qualifies for big corp. I normally do custom product development from scratch and it takes about a year of work in average. There is no way I would sit for a year without getting paid. Normally we would write a contract that among the other things specs stages and what is delivered for each stage. Each stage is paid upfront so first one qualifies as a downpayment. Obviously if by the time I am to start stage N it is not prepaid I would simply inform client and will not start working and the whole contract timeline shifts. But it is all in the contract and frankly had never happened. I've always got paid on time and had / have good relations with my clients.

But I normally develop software for companies whose main business is not software per se but they need software to conduct their business.

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

#92

Post by cainxinth »

benjaminwootton wrote: post #24
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…

Your points on not getting paid sound overly pessimistic. I’ve had hundreds of large clients. They are usually absolutely glacial to pay and totally ignore payment terms, but I’ve never had a debt go totally bad. Invoices have always been paid in the end. That said, regarding payments, my tip to the OP would be around negotiating down payment terms and chasing finance teams with the anger of 1000 suns if you need the…

> Your points on not getting paid sound overly pessimistic.

I agree. Late payment is much more common that no payment. Also, clients, unjustifiably or not, usually take umbrage at being asked to cough up what's owed. I give everyone a healthy grace period and send gently-worded reminders, but I won't stop working unless there is a material breach of contract or unless my reminder isn't at least responded to with a "Sorry we're late with your payment, we're working in it."

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

#93

Post by withzombies »

fhd2 wrote: post #87
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…

How would you suggest someone new to consulting handles sales? I've talked to consultants that get all of their leads from old conference talks they did, but you advise against it. In my book, there is a finite number of options: 1. Go through your network - lots of writing / talking in case someone knows someone who's looking right now. 2. Become famous - conferences, blogging etc. 3. Cold call potential clients. 4.…

I think that's this bullet:

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

Specifically, "do write". Your writings will be way more accessible than conference talks.

He also may mean "don't sponsor or have booths at conferences or conventions". I personally find them valuable for connections but you don't need to attend them to make sales.

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

#94

Post by benjaminwootton »

michaelt wrote: post #70
tptacek wrote: post #19

Earlier quoted context omitted.

I would push back on a lot of this. These seem like strategies to avoid getting ripped off by shitty clients, and I'm sure they work, but they're also a strategy to avoid closing business with great clients. 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'…

> 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…

His advice is spot on though in terms of what OP will encounter. My peer comment said the same.

If you go after big companies they will be cash rich and they won’t rip you off, but they will be slow to pay.

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

#95

Post by tptacek »

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.

Don't, like, set up a booth. By all means give talks.

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

#96

Post by tptacek »

bambax wrote: post #55
homeslike wrote: post #49

Earlier quoted context omitted.

couple of questions to that: > * You can win by getting every contract reviewed, or by just signing them blindly could you elaborate on that? not sure i understand > * Keep your SOWs vague that can help you or hurt you, right? i'm working at a big consulting firm and our motto is to write the SOWs as explicitly as possible to prevent scope creep. > * Don’t do conferences/conventions why? isn't that a perfect way to s…

>> You can win by getting every contract reviewed, or by just signing them blindly > could you elaborate on that? not sure i understand Not the OP, but what I think they mean is that the time or money spent to review contracts just about pays for itself: if you spend a lot of time reviewing contracts or a lot of money having them reviewed by professionals, you may save some money some of the time, but if you just sig…

We reviewed everything, but large competitors of ours did almost the opposite, and they were fine. If it was me, I'd get everything reviewed, but apparently it's just a school of thought.

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

#97

Post by red-iron-pine »

Loved the travel and accumulating flightand hotel points and randomly getting bumped to first class when flying out to see family, etc.

Compensation was generally good.

Work was challenging and engaging. If nothing else it got me exposed to a lot of enterprise environments and business owners.

Don't miss the feast-or-famine workflow, constant shifting of priorities and needs, the artificial "give a shit" about the flavor of the month clients, and the constant up-or-out hustle environment.

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

#98

Post by jFriedensreich »

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…

unless you have an own project you want to work on or open source project, in which case 70% busy at 100% market rate is optimal, you just work on your own project until the next customer comes along.

one other point i would add here is that it is often good to have 2 parallel clients, you will have more freedom to say no to mistreatment from one and also less stress to have zero income when a project ends.

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

#99

Post by germinalphrase »

I recently took a position at a small, very young tech consultancy. Our compensation and billing practices are reasonable, but somewhat ad hoc.

Can anyone offer advice or resources: 1. Common compensation structures (salary/bonus/profit sharing/etc splits) 2. Appropriate time billing practices, i.e. billing to the minute vs billing blocks of time

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

#100

Post by michaelt »

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…

> 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?

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