Kalzumeus Podcast 3: Growing Consulting Practices, with Brennan Dunn

This dovetails quite a bit with the Ramit Sethi interviews earlier, but is largely about the mechanics of businesses as they get away from the solo consultant stage. There is some very important math in there for folks looking to expand by hiring. (Copious hat tips due to Thomas for much of the advice here. Except the bad stuff, that's mine.)

Emails in my profile, let me know if you'd like to be on the announcement list (going to cap the workshop at 25 people)

As an economics PhD drop-out who left [after year #2] to start my own consulting company based on my PhD research, I can relate with so much of what I've heard so far (I'm only at 22mins at this point).

Also, as a person who went from the economics/business (albeit, academic) life -> developer life, I agree with your observations about how programmers suck at economics (err... business). It is a much easier transition (relatively speaking) to go from an econ/business person --> compsci/developer than it is compsci/developer --> econ/business person. You can't learn economics overnight, but I can certainly figure out how to create a tool that solves a specific problem overnight, because some guy wrote a tutorial about how to use to solve .

I'll try and update my post later after I've finished the podcast.

Conversely; I have an engineering background but found it very easy to pick up the basics of good business, at least how it applies to consultancy. Of course, I'm not trained in economics, but I figured out enough to get by (you could make an argument business sense isn't really related to economics - some wildly successful businessmen have never been educated in even the basics, they just saw and opening and sold).

What you seem to be suggesting is that an econ/business person could buy a programming 101 book and start making big bucks as a consultant software engineer. In theory I'd like to say that's rubbish, in practice I know of several people who do this.

Can't condone it though: the underlying drive for a consultant should always be - "I have a valuable skill, here is what it is worth"

Of course, that depends on the expense. Generally I'd say if you need to overnight then it is an expense to charge for - if you're driving for an hour then definitely don't :) (in the UK we can get tax relief for mileage in relation to our business, so I generally don't charge for travel if I have to drive less than 3 hours - otherwise I end up being "paid" twice :D). Taking the piss with expenses (one place I worked hired an consultant analyst who literally charged for everything - including the 30p it cost him to use the toilet at the train station) is as bad as not charging them.

If they want you because you bring value they will happily pay this cost. On the other hand if they are put off by this added fee then they are probably not the sort of client you want - especially as those costs are probably a small portion of what they are paying you for a days work!

On the other hand; if you soak up expenses to get that contract you are a) in the mindset of letting them set the rate (even if they never knew about it) and b) eating into your profits. Neither is a good situation to be in (next time they might want you all week, and that can get expensive fast).

However; I don't know about your situation, but if you don't live in the valley why are you trying to compete in the market there? I live in the countryside in the UK and used to believe my main market would always be London (~3 1/2 hours away by car, less by train). I've learned this is nonsense, and even the nearest towns to me have LOTS of developer work available.

You might also think that being out of the hub means less money. I've also found this to be untrue in practice, because no one works out here (they are all focusing on the big cities). Desperation for quality talent means that often, more money is on the table.