Consultancy Work Advice

[Captain Ahab Jr]

I've been offered a consultancy role to offer engineering/technical advice on a challenging advanced composite project which is a first for a well established/very experienced company but not a first for me.

The project will be all totally done in house from concept design, detail design, stress analysis, production engineering, tooling design, through to prototype production and load testing

I'm keen to do the best job I can which will hopefully lead onto more of this type of work so interested to hear peoples experiences good and bad from both sides of this type of working relationship

[LWJ]

I see you are in Europe. In the US, I would say buy an E & O policy. Don't know about liability issues in Europe.

[sammyg2]

Old saying:
a consultant is a guy who knows 1000 ways to make love but doesn't know any women
My current employment started out as consulting but it morphed into a multi-year design contract, so I basically became a self-employed contractor again.

You are obviously a subject matter expert but in the back of your head never forget LIABILITY.
It belongs to them, not you. Don't stick your neck out so far you end up owning the product or process.
You can tell them how they should do it but don't do it for them, unless they sign a contract

Good luck.

[jcommin]

You need to look at this as a business - not just earning a salary.

Liability insurance is a must - in the USA, I wouldn't consider anything less than 2 million US. Someone gets hurt from something you build, desiged, directed, etc - you will be the first on the list of the lawsuit.

[Laneco]

I opened my own business a few years ago as a consultant. I got some good advice from the Pelican flock so I'll share it with you (plus a few other tidbits I learned the hard way).

1. Setup your business with the advice of your tax professional. I realize things are different over the pond than here - but taxes are taxes... and the choice of your business structure and pricing needs to involve your tax professional.

2. Your time is always worth something. The time that you do not bill a client for such has invoicing time, incidental research, personal professional training/certifications, etc., are time that you take away from what you DO bill the client for and are a necessary part of your business. Think of it as overhead. You need to charge enough money billable to cover your "overhead."

3. Charge a retainer that is at least enough to cover all your hard expenses. If you get stiffed for payment...at least you are not out "hard money" for the expenses.

4. Keep on top of the billing. Though you run the risk of chilling the relationship, don't let people straggle to pay. I had a customer that was out a huge amount of money with me (27% of my total year's work). My house was going into foreclosure before I finally got pay...

5. Treat every day as a workday. I have often been tempted to stay in my pajamas but I found that when I did...I tended to take more breaks and my attention wandered badly. Dressing for work even when no one was around put me in the mindset of WORKING.

6. Take the off time to heart. Shut the phone off and close the computer up entirely if you are off and at night (if possible). I tended to never take the time completely off. The result was that I was often close to burn out.

Hope some of that helps you. I loved the time that I did this and will likely do it again. I only stopped because a most remarkable offer came along from one of my customers (whom I now work for full time).

angela

[Captain Ahab Jr]

Thank you all for the sage advice and to you Angela for your detailed reply, much appreciated

Originally Posted by Laneco

I opened my own business a few years ago as a consultant. I got some good advice from the Pelican flock so I'll share it with you (plus a few other tidbits I learned the hard way).

1. Setup your business with the advice of your tax professional. I realize things are different over the pond than here - but taxes are taxes... and the choice of your business structure and pricing needs to involve your tax professional.
Check!, We have a very good tax professional, company bought 1/43 scale model race cars come under 'office display' or 'company heritage' spending

2. Your time is always worth something. The time that you do not bill a client for such has invoicing time, incidental research, personal professional training/certifications, etc., are time that you take away from what you DO bill the client for and are a necessary part of your business. Think of it as overhead. You need to charge enough money billable to cover your "overhead."
Check!

3. Charge a retainer that is at least enough to cover all your hard expenses. If you get stiffed for payment...at least you are not out "hard money" for the expenses.
I've not gone this route before, I normally send an invoice for my hours, for this consultancy role we have yet to discuss payment terms, I leave this subject to last after I know I'm the right person they are after and if I want to do it, still need to thrash out the scope of the project too.

4. Keep on top of the billing. Though you run the risk of chilling the relationship, don't let people straggle to pay. I had a customer that was out a huge amount of money with me (27% of my total year's work). My house was going into foreclosure before I finally got pay...
Check! Learnt the hard way too, had to send a 'if my invoice is not paid in full within x working days I will be charging x% a day until the total amount is paid in full', don't think my customer was trying to get out of paying but it focused them enough to pay the same day

5. Treat every day as a workday. I have often been tempted to stay in my pajamas but I found that when I did...I tended to take more breaks and my attention wandered badly. Dressing for work even when no one was around put me in the mindset of WORKING.
Check! I don't work from home, my home is my home not an out sourced office and I enjoy/need an office/factory environment to get stuff done but one day I may work from home so thanks for the valuable advice

6. Take the off time to heart. Shut the phone off and close the computer up entirely if you are off and at night (if possible). I tended to never take the time completely off. The result was that I was often close to burn out.
Check! I went way beyond burn out Have new approach to work and leave more me time, I'll do everything I can for my clients but will not attempt to make up for bad planning or lack of resource by burning myself into an early grave again

Hope some of that helps you. I loved the time that I did this and will likely do it again. I only stopped because a most remarkable offer came along from one of my customers (whom I now work for full time).
I'm really enjoying freelance work with no regrets 4 yrs in, the freedom, work has been more interesting and varied, increased my skill set, knowledge/experience far more than I'd find working full time for one company.

angela

[stealthn]

Been a consultant running my own company for 23 years, wouldn’t change a thing, except my boss is a real hard ass

[Seahawk]

I take outside consulting jobs that interest me...I was in Huntsville, Alabama last week working a proposal I thought was pretty cool and has sub vendor ramifications for my company. Quick pic of the Saturn 5 just off the interstate:



No cars were harmed in the taking of this photo.

I try and stay at the hotel just to the left of the rocket but they were booked!

To the question at hand (and the advice to date has been great, especially Angela).

Without knowing the rules in the countries you may be doing business in, it is hard to say what the best way to protect yourself legally is. I formed an LLC with three other folks who are consultants only (and do very well) to organize the work. We may add some more folks.

A few reasons:

- Some legal protection although that is often questionable.

- Consistent forms for all transactions: We all use the same invoice forms, travel claims, Non-Disclosure agreements, Non-Competes, etc. It really simplifies the process.

- We use Paycheck for remunerating each consultant gig: Taxes, fees, Social Security, etc. is all taken out prior to getting paid. Very, very helpful.

- We issue credit cards for consulting expenses only. This has been a great bonus for all of us.

- Email. We all use the same email host and the cost and convenience is terrific.

- Spreads out the costs of admin, legal (if necessary) and other costs like tax prep, etc. We each pay in a certain percentage of our consulting fees up a a set point to cover the costs...very reasonable and minimal. Our lawyer is our accountant...pretty cool.

- Share work. Happens all the time - our network expands across each members expertise and we share work that is best done by another...I got the Huntsville work based on a referral from one of the guys in the LLC.

The above may not work for you but there are plenty of like minded folks doing consulting that like to team for all the reasons I listed. Best of luck, Captain.

[Superman]

Show them your, ahem....stones.

[stomachmonkey]

Originally Posted by Laneco

...

2. Your time is always worth something. The time that you do not bill a client for such has invoicing time, incidental research, personal professional training/certifications, etc., are time that you take away from what you DO bill the client for and are a necessary part of your business. Think of it as overhead. You need to charge enough money billable to cover your "overhead."

...

I call this one the "your business of one has at least two if not more employees"

The owner, the sales guy, the bookkeeper, the receptionist, etc....

Everyone needs to get paid.

[slow&rusty]

I worked as an Engineering consultant for 10 years and at one time had over 35 people reporting to me and ran a successful office in Houston.

Here's my summary, for what its worth:

1) Clients are demanding, because you're labelled "over-priced consultants" and can treat you like a door mat. In this day and age with smart phones and technology they typically expect an instant answer even if its 10pm on a Sunday. You have to have thick skin to be successful as a consultant and it takes a very special personality to be successful - strong personality with great technical depth and strength .

2) Lots of people want to be in consulting because the money is good, but are not really a good fit (see above).

3) Clients typically pay you late and you have to hound them constantly

4) You have to manage your budget fastidiously, its easy to make a 20% margin but by the time the project is completed that can easily fall to less than 10% due to overtime hours or project over runs.

5) Document...document..document...especially scope changes or change orders.

6) Have a good attorney

7) I made my boss a rich man!