In podcast episode number four, Jason and Molly talk about the tools they use for consulting—communication, internal project tracking, passwords, cloud-storage, document management, accounting and bookkeeping, task management, and more.
The two primary types of billing for consultants are hourly and fixed price. It can be argued that hourly billing favors the consultant because there’s no financial incentive to finish a project on time. If the project goes over budget, the consultant will continue to be paid the full hourly rate. Of course, there are other consequences to going over budget, like a very unhappy customer, which may in itself be enough incentive to avoid it. On the other hand, it can be said that fixed price billing favors the client, as the consultant has agreed to complete the project for a predetermined amount of money regardless of how long it takes. The consultant therefore bears the burden of pushing back on changes in or the expansion of the scope in order to ensure that the project is completed within the time estimate.* During my past life as a project manager at a small IT consulting firm, I was introduced to a billing concept called Target Cost, from Mary and Tom Poppendieck’s 2003 book Lean Software Development: An Agile Toolkit. Over the years, Target Cost contracts have not become widely adopted, but in my experience, this model worked very well, […]
Did I hire the right person for the job? Dear Molly, We hired a developer who is profitable but not productive. What I mean by that is we were expecting him to bill 20 hours week and fill in the rest of his time with internal development projects. He often hits his billable target, but ends up with 10+ hours of time related to personal development, research related to the work, non-billable bug fixes, etc. We hired him at an entry-level salary so, like I said, at the end of the day he actually is profitable for us but I’m just wondering if there is a better way of looking at his time. I’d call it productivity versus profitability. Sincerely, Wondering if I’ve hired the right guy Dear Wondering, I like the way you framed this question because I think people too often focus exclusively on numbers when they are evaluating employee performance. I think it is because base level profitability is the easiest way to measure value. How much does it cost me to have this person on board? How much money are they bringing in? I think what you’re asking for are some basic guidelines for goal setting […]
During the first several years of my adult life, working a variety of less-than-desirable jobs, I defined work success as finding a job that “didn’t suck too bad.” I figured I would forever do the things that I really enjoyed on the weekends or during occasional paid time off. By my early thirties I had found my way into the world of custom software development and loved it. After working in-house for a couple years, I moved on to a consulting firm and loved that even more. I spent several years as a developer, trainer, and project manager before I considered striking out on my own. It was a very risky proposition, as I was the only breadwinner for a family of four. I had read enough blogs, listened to enough podcasts, and witnessed enough of my friends and colleagues doing it to feel like I should at least give it a shot. Still, it took all that I had to push through the terror of uncertainty and jump off the cliff. During that transition time, my greatest fear was failure. Deep down inside I knew I was supposed to be doing something different and I felt confident in my […]
I was two years into my journey of being an independent consultant when I started to feel the pressure to grow. I had built a solid roster of clients, all of whom were in maintenance mode after their initial projects were complete. As new prospects came onto my radar, I realized that if I simply took on every new potential project, I’d soon be way too busy to do those projects and maintain my current clients. But since maintenance work can be inconsistent, I needed to make sure I was always developing some new clients. I had some important decisions to make. I had a meeting with my SCORE business mentor (if you’re not familiar with SCORE, you should be) to discuss my options. He explained the situation to me with such clarity that years later it continues to be an important part of my decision making process. It came down to whether I wanted a business or a job. My mentor explained that as an independent solo consultant, starting my own company was essentially creating my dream job. I took control of my schedule, my message, and my work culture. All of those things influenced the kind of client […]
How do I handle too many leads? Dear Molly, I’ve been on my own for a few years and have resisted the idea of growing my business, preferring to stay flexible and solo. I recently had a huge influx of prospects in my pipeline and my instinct is to go through the sales process with any opportunity that comes my way. But the truth is, I don’t have the capacity to take on more work for at least 3-6 months. What are my options and what are the risks? Busier than expected in Philadelphia Dear Busier, It sounds like things are humming along for you and I think you’ve got the right attitude to take the calls and see what opportunities exist. You never know what the future may bring and it’s important to keep your options open. You say you don’t want to grow your business, which to me means you’re not really interested in taking on a partner or hiring employees. However, given this influx of work, it might be a great time to hire a subcontractor. There are plenty of other independents out there who may not be having the same kind of luck in the sales […]
Everybody’s heard the one about the cobbler’s children not having shoes. While I prefer to associate the word cobbler with a rich crusted fruit pie rather than one who repairs shoes, I get it. The things that we successfully do for our customers often get overlooked at our own companies and in our own lives. This phenomenon is often amplified in the world of consulting, particularly because our work is service oriented. For example, a web developer’s website looks outdated, a designer’s logo is ugly, or business app developer’s company is being run on disconnected spreadsheets. Here are three reasons we often forget about ourselves and also why we shouldn’t. Time The better we are at what we do, the more demand there is for our time. If we’re already super busy with client work, it seems even less important to carve out any precious time to focus on ourselves and our own needs. But all too often “busy” comes and goes—if we keep our heads down and forget to look ahead and improve our own stuff, we find ourselves scrambling to catch up even when things are slow, adding unnecessary stress and pressure. Be sure to periodically set aside […]