So you want to be a consultant? The Pros and Cons of Being Independently (un)employed Robert Krten Iron Krten Consulting

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 2 In case you want to follow along…

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 3 Everything you ever wanted to know about consulting… Is consulting right for me? Why are you a consultant? What are the benefits? What are the pitfalls? Why hire a consultant? How do I get started? What do I need to know? How much can I make? How do I find work? How do I negotiate a contract? Do I need a lawyer? Do I need an accountant? What’s the most difficult contract you’ve ever had? Do I need to be an entrepreneur? Should I get a domain name? Should I get business cards? We’ll touch on these points throughout the presentation

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 4 My Background 3 years in startup / small company 18 years of consulting 5 years of employment (it didn’t take) Back to consulting (1½ years and counting!)

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 5 The Pros and Cons Consulting – is it for you?

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 6

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 7 Green Grass The grass is always greener on the other side: –I don’t like my current job, so I’ll be a consultant! –This consulting thing is easy! –You guys are overpaid!

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 8 Changing Conditions You may not necessarily want to be a consultant, but: –You can find only contract work –You may want to work only part time

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 9 Why consulting? Freedom –Not limited to just one company, one product, one industry Creativity –You are your own boss Money –If you’re good at it and keep your pipeline full, there’s decent money to be made

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 10 Why not consulting? Lack of stability –Where/when is the next paycheque? Cashflow –Do you have cash reserves? Stress –Does this keep you awake at night?

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 11 Why not consulting? Always looking for work –I love interviewing; do you? –Engineers are introverts – exactly the wrong personality type –Networking, networking, and more networking! –Dealing with rejection on a monthly basis

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 12 Why not consulting? Business Management You are the: –Marketing department –Sales department –Accounting department –Bill collector –Legal department –Chief bottle washer

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 13 Why not consulting? Work / Life Balance –It’s easy to become a workaholic, because you can monetize every waking hour. –Should you? Probably not. –Can you resist? Depends on your personality.

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 14 Getting Hired What do you bring to the table? Are you a consultant or a contractor (or both)?

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 15 As a consultant… Specialized, concentrated knowledge Strong expertise Short term requirement

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 16 As a contractor… Term employment –Avoids commitment from company –Not “headcount” (more like staples and paperclips) –Different budget

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 17 Getting Started Or… Show me the money!

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 18 Business Plan Like any business, you need a plan: –Expected revenues –Expected expenses –Long term budget items –Capital costs –… it never ends –Maybe you’ll even have profits!

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 19 Business Plan Revenue Salary Dividends Benefits Medical Dental RRSP Employee / Owner(s) Operations Computers Software Supplies Electricity Marketing Ads Acct/Legal Business Taxes Payroll HST Corporate Government $12k/y $100k/y ($75k net) $9k/y $100/h $25k/y

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 20 Business Plan Revenue: $100 / hour 1,725 hours / year = $172k / 80% occupancy = $138k / year Expenses: Salary = $100k / year Benefits etc = $12k / year Operations = $18k / year = $130k / year Corp Profit $8k / year

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 21 Business Plan Revenue: $100 / hour 1,725 hours / year = $172k / 95 % occupancy = $163k / year Expenses: Salary = $100k / year Benefits etc = $9k / year Operations = $12k / year Taxes = $12k / year = $133k / year Corp Profit $30k / year More profit due to higher occupancy, lower benefits and lower operations costs. Note that we pay taxes now 

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 22 Rule of Thumb Generally speaking: $X,000 / year = $X / hour You can adjust this formula +/- 15% depending on your industry, qualifications, market conditions, etc. If you need to adjust it more, you should revisit your business model calculations.

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 23 Fixed Price Hourly –You get paid by the hour when you work Fixed Price –You get paid when the job (or certain milestones) are completed Tradeoffs

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 24 Agency vs Direct Agency generally takes a cut –Usually 15% – 33% (or more of total) –Some large corporations deal with agencies only I’ve worked with one agency in my life; the BNR contract of ’94

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 25 Setting up your Business Next steps: Business registration (incorporation) Legal representative Accounting representative HST number Website Business Cards Banking (current account, credit cards) Phone Advertising

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 26 Business Registration Why? –Protection (corporation, not you, signs contracts) –Some companies deal with corporations only, not “sole proprietors” –Tax advantages

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 27 Professionals Lawyer –Read your contracts! –Keeps you out of trouble Accountant –Manages your affairs with the government –I don’t like accounting, so I farm it out

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 28 Advertising

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 29 Contract Negotiations Read the contract Have your lawyer read it Have your lawyer explain it: …shall indemnify and hold harmless against any and all… …vendor warrants……does not infringe… …vendor certifies that……irreparable harm … up to the value of the contract knowingly

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 30 Contract Negotiations Read the contract again! This time: –Is it balanced? “we can cancel the contract on 5 minutes notice, but you can’t quit” “you can’t work for anyone else while you’re working for us” –Are you properly compensated? “we own everything you ever produced, will produce, or think about producing”

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 31 Contract Negotiations If stuck, negotiate: –You are the business owner –You are the one who makes the decisions about your end of the bargain

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 32 Summary Is consulting right for you? What do you need to do to become a consultant? As a business, why would you hire a consultant?

Fe Kr 10 Iron Krten Consulting Secure, embedded software architecture and design services. 33 Questions? I Am A Consultant – Ask Me Anything (a la reddit’s AMA forums) This slide deck: