Having decided to work for myself as a freelance consultant after working in relatively stable and secure jobs for more than a decade, I can’t help but feel some anxiety and nerves about the change. I worry that I won’t meet my financial goals, that I won’t be able to land or retain clients, and that I’ll be begging for a job again before too long. Yet the appeal of independence overcomes these worries. More than anything I’m seeking operational freedom. Importantly, I think I’m preparing correctly in advance, and in this post I’m sharing what I’ve done so far.
This is not an impulse decision. I’ve been idly toying with the idea of being independent for more than a year, and for the past six months I’ve been more seriously considering my options. I’ve thought up potential business names should I decide to start an LLC with partners. I’ve made lists of people in my network that I could turn to for business, referrals, and advice. I probed people I know who are consultants and asked about both their experiences and for their opinion on my prospects. I considered where I am in my career and whether I have established enough of a reputation to be successful.
Having heard only support from friends and family, and favorable conversations with people I trust, I set some savings goals to give myself breathing room. My target was a six month runway on which I could pay all my bills without any income at all, a scenario I consider to be a very unlikely. I used Mint to track my expenses, added 20%, and started saving. Thanks to the recent bull market and watching my spending I’ve now achieved my savings goal. I can tap in to this during slow periods and when I’m waiting for clients to pay accounts receivable. I will find a safe place to invest a large portion of it for something higher than the pitiful .03% it’s earning in the savings account at my bank.
I’ll be managing both business and personal expenses and income for the first time. I need to set up a budget, complete with expense estimates and revenue goals. I have a lot to learn, beginning with accounting. I’m considering FreshBooks, Quickbooks online, and Kashoo. I may need to open separate bank accounts and/or credit cards for business use, depending on what the accountant recommends. And of course I need to decide if I’ll be accepting Bitcoin.
I’m being very careful to communicate my plans to the most important people in my network. I’ve had very straightforward discussions with my current employer, notifying them of my intentions. I hope to retain them as a client for several days a week, at least at the start, to make the change easier. They have been very supportive of the decision and I believe we will reach an agreement. I’ve reached out to people I’ve worked with in the past and found several leads that will almost certainly result in a few initial clients.
For the past several months I’ve also been doing more scouting than usual. To be fair to my current employer I hadn’t told anyone of my plans, but I attended conferences and meetups in the Bay area with an eye for potential clients. I did a talk at a local meetup and for a vendor to help boost my profile. My recent videos, Linux System Administration and the upcoming Linux Web Operations, should also help.
I built a website about myself, the first one I’ve ever done. I found it to be a strange and uncomfortable experience, but I’ll need to get in the habit of selling myself. Of course, I also started this blog, something which I’ve attempted and failed at many times over the years. Still, I think that maintaining a current online portfolio and presence is important for a consultant, especially in tech.
I made a sales pipeline spreadsheet to track work opportunities. I broke each lead down as follows:
- 5% Lead
- 10% Initial Contact
- 20% Client expressed interest
- 40% Scope of work requested
- 50% Scope of work delivered
- 70% Verbal agreement
- 80% Written agreement
- 90% Work scheduled
- 100% Work started
I guess I’m an optimist since I give myself a comforting 5% chance for even a blind lead. As each engagement proceeds I’ll bump up the percentage. I made a list of around thirty people and companies I know that could potentially result in work.
There is a lot of work cut out for me. First up, I need to work on the things I know the least about (and thus am the least excited for): legal and accounting. I need a lawyer who can protect my interests and an accountant who can cut through the financial fog. Hopefully that will be the extent of my professional services needs.
I still need to refine my niche. My web site outlines the services I’m offering, but I don’t believe it’s specific enough. I believe that a successful consultant has a very clear specialty, a space they’ve carved out in which only a few others operate. Mine will be related to system automation, monitoring, or deployment, but I need to get more specific. Should I narrow down the scope to containers? Amazon Web Services? Continuous deployment? Certainly I’ll only work on Linux projects, but that’s the only sane choice anyway. Perhaps some of this will be guided by the first few projects I take on.
Finally, open the doors for business. The exact date is not yet known, but it’s coming up quick. My employer knows that the change is coming so it’s just a matter of ironing out the details. I have a speaking engagement lined up and two clients who are ready to work with me the moment I can start.
An advisor passed along a valued bit of wisdom.
Don’t focus on only the outcome, or you’ll be unhappy and more likely to fail. Instead, enjoy the journey.
I’ll keep that in mind as the journey unfolds.