Ask HN: Starting a consultancy - is this a good idea?

17 pointsengilancer15y ago4 comments

I'm a freelance Ruby on Rails developer located in New York City, and the number of interested clients has become increasingly large - large enough that I'm very interested in hiring a few consultants of my own to do the cookie-cutter business logic and CSS/HTML work that I'd rather not do. Does anyone have experience doing this? Positive/Negative? Is it a lot of management overhead, and in the end is the extra throughput worth the stress of managing subcontractors?

4 comments

solost15y ago

My recommendation to you is to decide what type of consultancy you want. One where you are in charge but hire a project manager to do all of the day to day management or one where you are in charge and also responsible for the day to day management.

I run my own firm and I love what I do, however I only do actual client work 20% of the time, the rest of the time I am HR, Accounting, and Business Development. My business is nearly 100% referral yet business development still takes up nearly 50% of my time due to the fact that I feel I need to own and manage the client relationships. However I have an amazing project manager to keep all of the projects on track.

I would encourage anyone who wants to operate their own business to do so, just remember it is incredibly important to learn what it takes to set up and operate a business properly before making the commitment. Even if you think you know what you are doing, nothing can beat having a knowledgeable and trustworthy accountant and lawyer to aid you on your way.

The second thing you have to strongly consider is can you recruit the talent necessary to support the business? One of the reasons I was able to start my own firm is I spent a decade building a dependable network of service providers that I can rely for everything I need. I have used these people for a long time and between them and the people they can recommend, I am never left in desperate need of skills or man power to get the work done.

Finally consider the type of lifestyle you want to have? Operating a consulting firm in its formative years can really erode your work life balance. Many people love the idea of operating their own business but are completely unprepared when they discover just how different it is from being a freelancer.

arkitaip15y ago

Do you really want to grow? Why?

If it is about getting more cash, you could try increasing your fees.

If, however, it is about seeing your business grow and mature, then you need people to delegate stuff to.

You most difficult task will probably be to find consultants how are competent, communicative, effective, trustworthy and not too expensive. It can be a pretty difficult process that can easily take months and even years if not properly managed. Depending on the complexity of the work to be done, you can look at everything from freelance marketplaces (low complexity) to more reliable third party providers that advertise on various web design/development sites. One advantage of using freelance marketplaces such as elance or freelancer.com is that they offer fairly good mechanisms for managing projects, deliverables and payments so that you don't have to set up your own infrastructure.

I wish you the very best and hope your business turns out the way you want it to be.

AyKarsi15y ago

Of my many years of dev experience I worked 4 as a team lead for a consultancy. Eagerness to earn more money and serve more customers got me into that position. At the end of that time all I wanted, is get into proper project work again and say good bye to all the admin,sales and management bullst.

It is hard enough finding good projects for your employees, being profitable and keeping your admin stuff upto date. If you go down that road, you'll come to realize that you have less and less time for development yourself.

To answer your question directly: Yes I think the management overhead is usually grossly underestimated. Whether it's worth it depends on how what you want to do: Manage consultants, develop, sell projects, have a private life...

You'll be learning a lot of new things, and I definetly don't regret my time, but I know that I love developing and handpick the project I do.

iworkforthem15y ago

There will be quite a bit of management to do, either you have to do it yourself or you have bring someone in to do it for you. In an ideal situation, a project manager can be roped in to manage the P/L, schedule and as well as the scope of each project. You can be a resource for him. Of course the strange thing for him is that he will report the P/L back to you. Kinda of ironic, but it could work, and you still get to do what you like and do best.

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