About a decade ago, I made a big career decision — I decided to become an independent technology consultant.
This was a pretty major decision because I had previously always been an employee of various tech companies.
I thought that it was safer to be an employee of a company than to run my own business.
However, I was tired of dealing with the bureaucracy, red tape, and office politics that come with being an employee.
So, I decided to start my own business as an independent technology consultant.
All in all, it turned out to be one of the smartest decisions that I have made in my adult life.
However, it wasn’t an easy decision to make — in fact, it was one of the hardest decisions I’ve ever made.
So, if you need help deciding if you should become an independent technology consultant, here are the key questions that you need to ask yourself.
The first question you need to ask yourself is “why?” Why do you want to start your own business? Why do you want to be an independent technology consultant? What is your primary motivation for wanting to change your career from being an employee to being your own boss?
Do you hate your boss, office politics, or red tape? Do you want more money, control, or freedom? Unfortunately, when you run your own business, you still have to deal with clients, government red tape, and other headaches. However, it often leads to a higher income, more flexibility, and more freedom.
For me, personally, the single biggest reason that I chose to go independent was so that I could be responsible for my own successes and failures. I didn’t want someone else to be in charge of my destiny. Rather, I wanted to take responsibility for my future and build a business that I could be proud of.
One of the biggest surprises you may find in starting your own business is that you have now become your own worst boss. Remember that terrible boss that was always telling you what to do, how to do it, and then making you work on weekends. Well, unfortunately, you are now that boss to yourself.
Running your own business means that you have to be very strict about how you manage your time, work, clients, finances, and operations. Expect that you will eventually grow to dislike yourself as a boss. If you want to succeed in the world of business, then you need to be pretty tough on yourself as a boss.
In many ways, being your own boss provides you with more freedom; however, in other ways, a lot less freedom. For example, expect that you will begin to feel guilty when you take a day off on the weekend when there is still work that needs to be done to meet a deadline. It’s tough not to feel this guilt.
You need to make sure you are qualified to be an independent technology consultant. This means having the right education, experience, certifications, and credentials. Make sure that you meet (and exceed) the minimum requirements to fulfill your role as a technology consultant in your area of expertise.
In addition, as an independent consultant, you won’t have coworkers to ask questions when you’re stuck on a problem. You need to be able to solve these problems on your own. So, you need to be a natural problem solver in addition to having the right education and qualifications.
If you are unsure if you have the right skills to become an independent consultant, I strongly recommend that you work as a consultant through a consulting firm first. Become an employee or a subcontractor for a consulting firm for a few years until you really understand the business well.
Are you the best person you know with your specific technical skills? Who is your competition? Where do you even find out who your competition is?
Knowing your competition requires having an extensive professional network. You should know most of the experts in your area from local user groups, conferences, and other professional meetups. By talking with them and learning about their background you should be able to gauge their skills and expertise.
If there are other competitors that are better than you at your specific skills, then why would a company hire you as their consultant instead of them? As a consultant, you are expected to be the expert. Otherwise, it would be better for your client to hire the real expert or cheaper to hire a novice instead.
Do you love writing code more than anything else? Or do you like doing a variety of tasks outside of your technical role? If you just like technical tasks, then you’re in for a big surprise. When you run your own consulting company, you will likely be spending less than half of your time doing the work you love.
Instead, you will now have a variety of other responsibilities that need to be done. For example, marketing, sales, accounting, support, etc. They all need to be done and you’re the only person available to do them. You’d be surprised how much of your day will be filled with these operational tasks.
You can always hire a manager or an assistant — like I did a few years ago. However, for the first few years of running your own business, you will be expected to do all of these tasks on your own so that you understand them well enough to document them, teach them to others, and fix issues as they arise.
Before you pull the trigger, quit your job, and start your own consulting company, you need to ask yourself if there are at least three to five potential clients that would pay for your services if you were available today? If the answer is “yes”, you are in good shape. If it’s a “no” you may want to reconsider.
In order to reduce your risk, you don’t want to have all of your “eggs in one basket”. Having only one client might be enough to get you started, but what happens if it doesn’t work out. Rather, you need to have multiple potential revenue streams to ensure you don’t end up without a source of income.
In addition, you want to diversify the services that you offer in the event that one (or more) of your revenue streams dries out. For example, when I first started out, I provided contract programming services, in addition to on-site training, and public speaking.
Companies only hire consultants for a few very specific reasons. For example, it costs less to hire a temporary consultant vs. hiring a full-time employee. Or they may need to reduce their employee labor costs for financial reasons. Or they need expertise for high-demand skills that are in short supply.
So, you need to make sure that your services are something a company is willing to purchase. For example, I offered a series of services including technical advising, prototype development, and on-site training. They specifically leveraged my expertise but wouldn’t make sense as a full-time employee role.
You also need to make sure your services are priced appropriately. New consultants can typically charge roughly double their hourly rate as an employee for the same work — to cover overhead expenses and lack of paid benefits. Then, just gradually increase your prices until your customers start to complain.
When you run your own business there will be times when business is really good and times when business is really bad. We refer to this as “feast or famine cycles” in the tech industry. So, you need to be both financially responsible and emotionally resilient to weather these storms of uncertainty.
However, it’s important to realize that job stability as an employee of a company is all an illusion. We think that we are financially secure when we work for a large company. However, we can be fired or laid off at any moment if things get rough. The job security we feel as an employee is a just lie we tell ourselves.
When you run your own business, you must face reality head-on. You need to deal with financial hardships and fix these issues on your own. However, taking on this responsibility isn’t for everyone. So, if this sounds too scary, you might be better off with the illusion of job security (as an employee) instead.
If you’ve made it this far, then I assume you are satisfied with your answers to the previous questions and are ready to take the first steps to becoming an independent technology consultant.
To learn more, please check out my follow-up article How To Become a Technology Consultant [coming August 1].