It took me longer than I wanted but I am finally posting my first “Going Independent” post. I wrote parts of these back when I was originally making the plans to go independent but I have modified and brushed them up since then. This post is about making the decision to go independent.
Making the Decision
So why would I want to leave my nice cushy job with a large consulting company? Over the last three years my goals have changed somewhat, originally I wanted to focus just on writing and become a full-time author. After writing one book I quickly realized that this would be almost impossible, so I changed my focus to working on writing/software development. The problem that I quickly ran into is that writing a good software application takes a long time and would be hard to do without some kind of financing.
Then it occurred to me that I could become an independent consultant and work on writing and software in the time I don’t spend on consulting. This is the model that Eric Sink used[1], working as a consulting company while working on his products in the spare time. The more I thought about it I also did not want to stop consulting, working day to day with customers is the only way to really get an understanding of the real world. I talk to loads of developers who really don’t understand what the environment is like in a real company, I think this is a major drawback when writing software or writing books and one that I can avoid by continuing to be a consultant.
So starting my own company and working as an independent consultant while working on writing and software in my spare time seemed like the perfect solution, but the question was when to do it. This is when the fear started to kick in, no longer was I a single guy with no responsibilities, I am newly married with house and car payments, I needed to make sure that I had a semi-reliable income. For the last year or so I have been putting off this idea of going independent, writing it off to needing more experience or wanted to wait for the perfect time. Then I was out at the MVP Summit earlier this year and I was talking to a number of different developers and we were discussing going independent, I mentioned to Jonathan Goodyear that I was thinking of going independent and he said something like “What are you waiting for?”. I sat there trying to think of a reason and it kind of occurred to me that all the reasons I could come up with were just excuses to put off taking the leap. I saw all the people at the MVP Summit who were doing what I wanted to do and was somewhat enabled by their success and encouragement. So after the MVP Summit I started honestly working towards going independent.
Drawbacks and Benefits
When going independent there are many things to consider, there are benefits but lots of drawbacks as well. One of the major drawbacks is the amount of time you have to spend on the overhead of being independent. This includes time for things like creating your business, handling taxes, being a sales man, consultant, and bill collector. I am going to be writing separate posts about many of these challenges and how I have handled them so far. One decision I have made early on is that I am going to try and eliminate as much of this overhead as possible by using the services of accountants and other professionals. There are also drawbacks in the area of worker benefits. When you work for a company full-time they pay for your 401k, health benefits, sick days, and vacation.
I will now be responsible for all of these costs and was something I definitely had to think about when determining by bill rate.
So what are the benefits of going independent? I think for me the best benefit to being independent is being in control of my own destiny. If I come up with an awesome software product I will reap the benefits of that idea and action. If I do a great job for a client then I win a customer for a long time. If I see I project I don’t want to work on I don’t have to do it. On the flip side I also take the consequences for my actions. If I mess up a project for a client then it affects me more than if I worked for another company. If I waste six months on a bad software project then I take the hit. This is something I am perfectly comfortable with. There are also benefits in the area of time off and pay as well, if I decide that after a long 8 month project I want to take a month off I can do that, I don’t get paid, but I can still do it. I can also make the time for things like conference and writing, things that were hard to squeeze in when working for another company.
Why not go work for Microsoft?
This is something I seriously thought about, for awhile this was something I was seriously interested in. The main reason I did not pursue this is that as much as I like Microsoft it is just another job, I won’t have any more control over my destiny. I would get to work on some great projects and with some incredible people, but when it came down to it I would just be another employee. I want to do more than that. I want to run my own company and try to influence the software world on my own, not as a part of Microsoft. (it was so tempting though, I love going to Microsoft whenever I can)
Thanks
I would also like to thank a couple of people for influencing me to go independent, and in writing alot of great posts/articles about going independent. Those people are Jonathan Goodyear who has a Going Independent series, Scott Mitchell who I talked to out at the MVP summit and also has a series of posts about going independent, and finally Eric Sink whose business model I most admire and has written the great series on MSDN about starting your own software company. The wealth of information these guys have put out there has been a great help in my transition to being independent.
It will be interesting to come back this post in a year and see what I was right about and what I was wrong about. I am going to keep writing these posts as I work my way through going independent, and hopefully these posts will help you if you are considering going independent or just want to learn more about it.
My next post is going to be about finding an accountant and the dirty work of taxes and creating my company.
-James
[1] Starting Your Own Company – http://msdn.microsoft.com/vstudio/using/columns/business/default.aspx?pull=/library/en-us/dnsoftware/html/software01262004.asp
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Good stuff. And of course, I’ll be posting similar thoughts
James,
One of my favorite sayings is:
"When you change the way you look at things, the things you look at change."
After you have been independent for awhile, I definitely encourage you to re-read this post, especially the drawbacks and benefits you mentioned above.
After being a consultant for a few years, I actually find that the amount of time I spend on "overhead" as a consultant is really not much different than the overhead of being an employee or contractor. What has changed is my focus and the way I look at things.
As a very simplistic example, you blog now and you will probably always blog. However, once independent, you will probably view blogging as a form of marketing as well as a way to share information and build community. The fact that you spend time blogging won’t change. However the way you look at blogging will change.
The same goes for taxes, for example. Sure there are a few different tax rules once you go independent, but for the most part taxes are taxes. What will change is your view of taxes. As an employee, they leave your paycheck automatically and you never "feel" the tax burden. However, once you go independent, you’re making out a check to the IRS! You will never think of taxes the same ever again. Only your viewpoint is different.
The same idea works for purchasing software, tools, and books as well as going to conferences. Employees typically want everything and anything since they are not paying for it. I know I did
No book, tool, or conference is too expensive and all are critical to the employee doing his/her job well. However, once you go independent and you’re paying for the resources, you begin to weigh options, pick-and-choose, and look for the biggest bang for your buck. The resources are still out there and the same things you "needed" before, but as an independent they might not be so necessary anymore 
Obviously I have given some very simple examples here, but I think you will be quite surprised that things have only changed because you have changed. Once you jump on over to the "greener pasture" and get a good look at it, sure it’s different. However, the pasture you were in before looks different, too
Good Luck!
Good Luck! I can’t wait to read about it!
Pretty good e-book here for 19.95 – Start to Finish Guide to Becoming a Consultant
http://www.netimpress.com/shop/itembycat.asp?catid=6
I’d be very interested in how you fare as an independant. My main issue would be getting clients. Like many developer types, I have very little personal, non-technical skills in areas of sales or marketing skills. I could learn the new tax rules and read books on different corporations and all that. But there is no specific how-to’s on getting clients. I guess most people get started by accumulating some contacts while at previous job. That’d be unethical I think.
Anyone?
I’ve been an independent consultant for more than 10 years now, I had a job for one year after varsity and then started contracting and I have never looked back. Yes there is drawbacks, but if you are good at what you do and most importantly love what you do, then it becomes a truly enjoyable adventure.
Way, way, back when, (when I first got into consulting), a more senior consultant taught me these rules that every decent consultant should live by.
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