An IEEE-CNNNJ Member Panel Discussion by
The IEEE Consultants’ Network of Northern NJJanuary 26, 2006
with
Getting Started In Consulting
Don Borcherding - Process, Project and Resource MgmtJim Boyd - PIC Microcontroller-based ProductsEric Holme - Power GenerationFrank Middleton - Information TechnologyLaurence Nagel - Analog and RF Integrated Circuits
Don Borcherding NexSummit LLC
Process, Project and Resource Mgmt
NexSummit LLCThe First Year
01/26/06
About NexSummit LLC
Founded in November 2004 Specializes in Reducing Development
Time and Cost through– Strategic Planning and Resource
Management– Innovation Planning and Risk Management– Project Planning and Management
What Went Right Product Differentiation Well Defined
– Initially• Process, Project and Resource Management & CMMI • Lots of competition• Not much Interest
– Eventually• Strategic and Innovation Planning and Management • Very few competitors• Much more interest
Product Focus– Where to start process improvement– Culture rather than Maturity
What Went Right
Goal: 3 Clients in 2005– Used ABC List– Broke Even in 3Q05
Got paid within 30 days Spoke at several meetings and
conferences Got better at asking questions and
listening
What Went Right
Started getting my mailings through to prospects– Post Cards (No Call to Action) (25%)– Brochures (35%)– Puffy Letter with White Paper (50%)– Puffy Letter with Brochure and Flier (55%)
What Went Right
Developed a Monthly Flier– Use as a Fallback Strategy– Use to “Keep in Mind”– Hopefully useful at some point
What Went Right
Website – Invested in a website after…
• I broke even• Presented nationally at the CMMI Conference
– Redesigned it three times– Averaging 4 hits a day
• 1-2 hits are legitimate• Others are most likely robots
– Trying to punch-up the Home Page• Try to get visitors to stay longer
What Went Right
Built confidence– Letters and Brochures– Positive Feedback to Fliers– Positive Feedback to Website– CNNNJ Visits – Started feeling comfortable
• Networking• Making Cold Calls
I can almost handle rejection
What didn’t go according to Plan
Opportunities are 50% smaller than expected
4Q05 Client pushed out 1 quarter Long time from verbal commitment to
getting the contract Not use to dealing with so many
individuals– Need for accurate record keeping
What didn’t go according to Plan
Most of my contacts are still Engineers. Not decision makers– ABC List was used to screen accounts and
target the Pitch– ABC was used to refine Product Focus
methods (15 companies, 5 Industries)
What didn’t go according to Plan
New to NJ, 85% of my contacts are in Philadelphia– Difficult to get Clients in NJ– A lot of work cold calling
• Initially could only make contact 12% of the time• Increased it to 35%
– with Puffy Letter– Tracked Calling Times Closely
– Leads/Information were limited • Unsure whether they were target accounts
What I am doing Different Purchased a Lead List
– Executive– Company Size– Organized by County
Participate in more organizations (IEEE, NJ SPIN, PMI, NJTC)
Post Cards with Call to Action– 0ne hour of free consultation
Continue Cold Call Campaign– Letter, Brochure, Phone Cold Calls– On-site Cold Calls when in the area
Set Higher Goal: 5 to 10 Clients in 2006
Summary
2005 was the first time I felt I had real limitations: Sales and People
For once, I enjoy working for my boss.
Jim Boyd XL Research Inc.
PIC Microcontroller-based Products
Jim Boyd, XL Research . . .quick profile
Early career as “engineering generalist” with background in switching power supplies, analog and digital design and microcontrollers.
Currently heavily associated with Microchip Technology and its PIC series microcontrollers.
27 years as a full-time electronics consultant Most work performed at XL offices on hourly basis “interesting” business twists:
Bid fee charged for fixed fee proposals
Almost all clients are on pre-paid retainer basis
Charge 10% on Materials/expenses
Evolution of XL Research . . .
Worked 4 “permanent” jobs in first 3 years after college. Quit the last 3 jobs in 18 months on ‘principle’ Consulted (moonlight) with former employer after leaving job #3 Met former consultants in job#4 who convinced me I could make it
as a consultant despite being young First full-time consulting client obtained through a ‘jobshop’;
negotiated a ‘buyout’ at 1 year renewal. Since 1979 have had only 1 major client acquired through
jobshops. (It was really major though…) Early career focused on 1 full time client at a time, resulting in
some long gaps between assignments. Last ~15 years, focus on 2 or more clients at a time. Smaller gaps.
A man walked into a consultant's office and inquired about the rates for a study.
"Well, we usually structure the project up front, and charge $1000.00 for three questions", replied the consultant.
"Isn't that awfully steep?" asked the man.
"Yes," the consultant replied, "and what was your third question?"
and now for some “Pearls of Wisdom”...
“Know before you go... “
If you were happy as an employee, you will probably be unhappy as a consultant and vice versa.
Your SPOUSE’s (or SO’s) attitude toward consulting is critical to your long-term consulting experience.
No matter how much money you make per hour, eventually you get used to it and other factors will dictate your happiness. Don’t switch just for $$$.
Transitioning back to a “permanent” career can be very difficult after consulting for a few years.
If you stay in consulting more than 10 years, you may have done ‘better’ in the corporate world if you don’t mind venturing into management.
What a new consultant SHOULD do...
Notify your co-workers and friends about your new career path and contact info. Ask for referrals.
Start a database of business contacts and leads. Join your local IEEE Consultants’ Network Develop and practice your business “pitch”, then
get out there and USE IT.
Besides the obvious – i.e. separate business phone, business cards, a company name, an email name, a company website . . .
The not so obvious…
What a consultant SHOULDN’T do...
Don’t sit back and wait for the phone to ring.
Don’t let the client tell you what your services are worth. (But always listen…)
Don’t accept assignments you are lacking skills for, UNLESS you make the client aware of it.
Avoid derogatory comments about the work of others.
Don’t waste money on legal review of every contract.
Don’t overextend yourself buying equipment until it’s actually needed.
“Myths” About Consulting
If things get slow, I can always go back to “permanent” work.
In between contracts, I’ll finally have time to pursue my research and hobby interests.
I will make MUCH more money as a consultant. I will be able to afford the best test equipment. I will finally escape the constant C.Y.A. paranoia that
seems to cripple my workplace. Once I’m in business for a few years, I’ll have no
problems getting bank loans for expansion. Once I’m in business for a few years, I’ll have a
constant backlog of new assignments.
“Myths” About Clients
Clients will promptly pay my invoice because they understand that I am an individual contributor.
Clients who are happy with my work will refer me to others without being prompted by me.
Clients who are happy with my work will send me repeat business without being prompted by me.
Clients are willing to pay more for a “quality” design. Clients are willing to wait longer for a “quality” design. Clients are business-savvy and understand overhead. They
know my rate is not just my salary. Clients who are friendly and personable during the initial
meeting rarely turn into problem clients. With experience, problem clients can be spotted easily.
Client/Employee “Myths” About Consultants
All consultants drive expensive cars. If things get tight, the consultants will be the first to go. Consultants make MUCH more money than employees. Consultants are basically unemployable -- they’re either
eccentric over-achievers or unwanted under-achievers. Consultants identify errors and incompetence. They are the
enemy of the employee and should not be helped. Consultants don’t care about the company’s long-term needs. Employees should be given the core design work and R&D; it’s
an “investment” in our people. Consultants should be given the non-essential “grunt work”.
Consultants are always on the phone with their brokers.
“Negotiating” Tips for Consulting
Use a pre-printed Fee Schedule.
Send the Fee Schedule with your Promotional material as early as possible in the inquiry cycle.
Never negotiate your rate without getting something in return.
Enter the negotiation process with a firm concept of your fee requirements. Be prepared to say “NO”.
Never give the impression that you need the work, even if you desperately do.
“Profitability” Tips for Consulting
Whenever possible, arrange two or more active clients to avoid work gaps.
Consider switching to a Pre-Paid Retainer basis - Not getting paid for work completed is the biggest profitability drain in consulting.
Never agree to an unpaid technical proposal - it’s the second biggest profitability drain in consulting.
Add 10-15% charge on travel & material expenses.
Set a Minimum Daily charge for client site work.
“The More Things Change, The More They Stay The Same . . .”French Proverb
Fee chart originally prepared in 1994 by CNNNJ member, Werner Engelmeier
Eric HolmeM.E.S.A.
Power Generation
Getting Started in Consulting
Choosing a name for your business Business plan Work schedule The five P’s Office equipment Test equipment Liability insurance Office routine Eric Holme
Frank MiddletonApogee Communications
Technologies, Inc.,
Information Technology
Apogee Communications Technologies, Inc.
Frank Middleton, President and Sole Employee
http://www.apogeect.com973 796 2754
Apogee Communications Technologies, Inc.
Software Architecture Software Development Software Standards Security Communications Specialties:
– LAMP– Solaris– MDA, MDD– We don't do Windows
Why I Became a Consultant
– Started in US as consultant– Predated IRS rules– Peers were all consultants– Management not rewarding– Tech lead roles– After IRS, had to incorporate
Getting Business
– Alumni– CNNNJ– Head Hunters– Body Shops– Newsletter– WebSite– Publications
Benefits
– Independence– Work from home– Tax advantages– Challenging– Every assignment is different– Not boring
Advice/Lessons Learned
Financial Planning Stay Current
– IEEE publications– ACM publications– Trade Press (CMP)
• Information Week• SD Magazine• VAR Business• EE Times
Read them!
Contribute!
Save!
Staying Current
ACM Self Education Courses Develop products
– XML Swiss Army Knife
– MDA/MDD
– Home Automation
Laurence NagelOmega Enterprises
Analog and RF Integrated Circuits
Getting Started in Consulting
Laurence W. NagelOmega Enterprises
Randolph, NJ
Outline
Deciding if consulting is for you Startup preliminaries Continuing concerns Questions
My Background
Graduated from University of California, Berkeley in 1975
Worked at Bell Laboratories for 20 years in the areas of Analog Integrated Circuit Simulation, Semiconductor Device Modeling, Analog Integrated Circuit Design
Worked at Anadigics for 3 years in the area of RF Circuit Simulation and GaAs device modeling
Started Omega Enterprises in 1998 to provide consulting services in the fields of Analog Integrated Circuit Design, Semiconductor Device Modeling, and serving as an expert witness in patent litigation cases
Some Pros and Cons of Consulting You get to be your own boss You have a flexible schedule
that you can determine You never know what you’ll be
working on tomorrow You don’t have to worry about
being laid off in bad times You can choose which jobs
you work on You have full control over the
operation of your company
You have a demanding boss Sometimes you work long
hours and sometimes you don’t
Your job is fairly hard to schedule
You have to worry about going broke in bad times
You can lose a client in the proverbial New York minute
You have to keep books, send invoices, follow up on payments, and search for work
Is Consulting for You? In what areas are you an expert? Your reputation is your
biggest selling point in the consulting business. Is your resume polished and convincing? Your resume
is your strongest link to potential customers until you have established clients
Have you constructed an honest and realistic business plan? Expect to lose money the first two or three years. The plan should establish what rate you will be charging,
Do you have the resources to begin this adventure? Are you ready for a hectic, unpredictable, and sometimes
intense work schedule?
Startup Preliminaries - 1
Locate an accountant and a lawyer for advice Decide if you want to be a corporation, a partnership,
or a sole proprietorship Set up your accounting books from day one Establish a budget from your business plan Determine what rate you will charge, or what schedule
of rates you will charge. This has to be consistent with your budget.
Open a bank account and obtain a credit card Have stationary, envelopes, and business cards
printed
Startup Preliminaries - 2
Set up an office- FAX- Copier- Computer- Extra telephone line / Voice Mail- Web site
Startup Preliminaries - 3
Get insurance- Business Liability Insurance- Professional Liability Insurance- Workmen’s Compensation Insurance- Medical Insurance
Startup Preliminaries - 4
Advertise- Tell your friends that you’re available- Sign up with AICN (IEEE web site)- Join a local consulting network (like CNNNJ)- Send out one-pagers or postcards to companies where you have a connection- Realistically expect months before you land your first contract
You’re on your Way!
Knock yourself out on every assignment. If you succeed, your client will use you again and recommend you to others. If you don’t succeed ...
Don’t take on work that you aren’t comfortable with, no matter how hungry you are. On the job training is not part of consulting. Remember always that you’re supposed to be the expert.
Be careful to not overcommit. Taking on too much work ensures failure (see first bullet).
Respect confidentiality. Don’t blab about your jobs.
Continuing Concerns
Every job is an opportunity for another job. If your client is satisfied, he or she will use you again and will recommend you.
At the conclusion of each job, solicit feedback and ask your client if you can use them as a reference
Maintain an up-to-date client list that you can provide to potential clients
As in voting in Chicago, invoice early and often. Expect delays in getting paid.
Conclusions
Consulting is not for everybody, and very few consultants actually make a living from consulting
Consulting does provide an opportunity to own your own company, be your own boss, and work on a variety of jobs
If you really believe that consulting is for you, then go for it!
Got Questions???
Consulting Resources & Links Business Small Business Admin. www.sba.gov SBA Govt Job registration http://tech-net.sba.gov/ US Central Contractor Registration www.ccr.gov US Govt Procurement (contracts>$25k) www.fedbizopps.gov US Patent Office www.uspto.govConsulting IEEE Consultants Networks (Links to 30+ CNs) www.ieeeusa.org/business/consultants IEEE Consultants Network of NNJ www.TechnologyOnTap.org Independent Computer Consultants Assoc. (ICCA) www.icca.org Janet Ruhl - Consulting Rates www.realrates.comMailing Lists InfoUSA www.infousa.com CorpTech High tech Companies www.OneSource.com Dun & Bradstreet www.zapdata.com Thomas’ Regional Directory www.thomasnet.comJobs/Assignments IEEE AICN Job Post
www.ieeeusa.org/business/consultants Monster.com www.monster.com NJ Local Jobs www.nj.com/jobs Independent Contractor Jobs (jobshops) www.dice.com Freelance Jobs www.guru.com www.sologig.com Entrepreneur Matching www.entremate.comDirect Mail Postcards www.postcardpower.com US Post Office www.usps.com
About the Panelists…Don Borcherding, NexSummit LLC - specializes in Reducing Product Development Time
and can be reached at (908) 684-8914, email [email protected]
Jim Boyd, XL Research Inc., [www.PICconsult.com] - designs microcontroller-based products for consumer and industrial applications since 1978, Jim’s specialty is PIC-based applications and he has been an Authorized Consultant for Microchip Technologies since 1998. Contact: 973-584-0329, [email protected]
Eric Holme, M.E.S.A. - performs power plant electrical equipment, maintenance, problem analysis, testing, high voltage generator and motor failure analysis and repair, litigation and forensic investigation. Contact: (201) 568-5717 or [email protected]
Frank Middleton, Apogee Communications Technologies, Inc., [www.apogeect.com] -
provides IT services ranging from Model Driven/Systems Oriented Architecture to developing applications using embedded Linux. Contact: (973) 796 2754, [email protected]
Larry Nagel, Omega Enterprises - provides consulting services in the areas of analog and RF integrated circuit design, semiconductor device modeling, analog and RF circuit simulation, and expert witness work in the areas of patent litigation and trade-secret litigation. Contact: [email protected], (973) 895-4375
