There is a thread going on over at the Going Independent Yahoo! Group about how to secure your first big job when going independent. While I don't think there is any one answer, a lot of times it will probably come through subcontracting with another consulting company. And I think in most cases most of an independent's work will be done as a subcontractor, which has pros and cons.
When subcontracting, there are a few things to keep in mind, as outlined below:
Insurances
As mentioned in my previous post, there are several insurances you might need as an independent. A lot of times these insurances will be dictated by the contract presented to you by the consulting company. In the short time I've been an independent I've already dealt with several consulting companies, and each one varies with their insurance requirements. And don't be afraid to question the consulting company on their insurance requirements. I've already found that a lot of contracts are created as standard templates where you just edit certain fields with your name, rate, etc. Don't take a contract as-is on the first pass, especially with insurances. You don't want to get stuck paying for insurance that you don't need and isn't really required.
Billable Rate
Your billable rate should be clearly defined in your contract with the consulting company, so definitely don't gloss over that. Make sure it is what was agreed upon and if not, push back. One important thing to remember: you can get a higher rate if you have the contract written for your company and not for you personally. This means you will be billing corp-corp. When you bill corp-corp, it's not looked as if your entire rate is going to a single person, even if it is. It's perceived to go to another company, so you can usually get a higher rate.
Statement of Work
This is going to depend on the project. For a project that has set deliverables, such as “building an intranet app to handle sales calls”, you'll probably have a set amount you're going to be paid, so make sure you get a statement of work because that will define when you are “done”. If you don't get this clearly stated, you run the risk of being strung along and putting more time into the project than you had allocated. However, SOWs typically don't apply to something like “act as lead architect for large scale VB6-VB.NET migration for 6 months”.
Payment Terms
Knowing when you're going to get paid is pretty important, so be sure to understand very clearly what the payment terms are for the consulting company you're subcontracting with. My short time as independent has already proven that this widely varies between consulting companies, with some paying every week or every other week (from a timesheet) to some paying net-30 or net-45. This will also vary depending on the project type. For instance, for a 6 month project you'll likely be paid every week or every other week based on your timesheet. But for a project to deliver something in a statement of work, it might be net-30 or net-45, which means you don't get any cashola until 30-45 days after the project is done and you send the consulting company an invoice.
Print | posted on Saturday, September 11, 2004 7:56 PM