Profits and Perils

In Private Consulting

by Yisroel Goodman





Dedicated to my wife

who was supportive enough

to let me chase my dream

and smart enough

to let me know when

it was time to face reality

(C)opyright 1992-2000 by Yisroel Goodman, All Rights Reserved

No part of this book may be reproduced, published or distributed in any form without written consent of the author.

FOREWORD

This book came into being accidentally. I had given up my job as a well-paid computer consultant for a major firm to start my own consulting firm. Being well aware of the statistic that most businesses succeed or fail in the first five years, I decided to devote at least five full years to the firm. For five long and laborious years, I tried every conceivable method of increasing my profitability. With each attempt, I learned more. I discovered how to cut expenses, increase my rates without decreasing my billable hours and improve profits by reselling the same software system several times. I learned how to convince clients to act as my agents and actively sell my services to their business associates. Yet although with each year my firm became even more profitable, despite my best efforts, I never achieved my original goal. I never reached a point where I felt that I could work less than my minimum of 70 hours a week, much less take a vacation. I still felt that I had to chase every lead, no matter how small the chance of making the sale. At the end of the year, after all taxes and expenses had been paid, I still felt that my earnings were less they would have been had I been an employee, working regular hours.

Finally, after five years of self-employment (the last two after I was married), I took stock of my situation. I now had a wife who wanted her husband home on occasion and an infant daughter with whom I wanted to spend more time. At my wife's gentle (but determined) urging, I went back into the corporate world, keeping my firm active as a sideline. Since I no longer had the same amount of time to devote to my private clients as before, I expected to make far less from my business. It therefore came as a shock to me to find that it was even more profitable now. The reasons were clear. First, my previous five years had taught me some valuable lessons in achieving profitability. Second, since I was now assured of a steady income outside of the business, I was no longer as hungry. I could afford to choose the lucrative projects and turn down others. I was now able to insist that clients pay my regular hourly rates without the heavy discounts to which they had become accustomed. I did lose some of my more problematic and argumentative clients. But soon I discovered that some of these clients had actually been cutting into my profits rather than supplementing them. I also discovered that when you begin rejecting consulting opportunities, you acquire a reputation as a top practitioner. This makes clients seek you out. No longer were client doing me the favor of hiring me, I was doing them the favor of accepting the assignment. A few years later, I was able to give up my corporate job and return to the world of independent consulting without looking back.

I began meeting many eager young people who sought me out to learn the secrets of my success. They talked of leaving their employers and starting their own consulting firms. I told them of my experiences and was able to convince most of them that such a venture was not as easy as they expected. My friend, Ira Lehrman, who I believed was helped by my advice as I was helped by his, (and who insisted that I dedicate this introduction to him) said to me, "You have a great collection of stories and experiences that could be helpful to others. Why don't you write a book?" This is the result.

Though based on my experiences as a computer consultant, this book contains useful information for anyone whose business involves selling himself, his time and his knowledge. This book is for all those consultants just starting out and would-be consultants who are thinking of hanging up their own shingle and going to work for themselves. It may be of value even for "experienced" consultants who have already entered the field. It contains methods that can help you increase the productivity of your time, the respect of your clients and your income.

I had two purposes in writing this book. First, if you are presently employed but thinking of starting a consulting firm, I hope that reading this book will make you think twice. Though independent consulting has many benefits, it also has many risks and requires a great deal of work, determination and luck. The majority of consultants who I came across did not succeed. Second, I want to provide some insights and ideas to those of you who have given it thought and already decided to become consultants. By reading about my experiences, you can take advantage of some of the ideas I tried that worked and you may avoid making my mistakes (though I am sure that you will make some of your own).

This book may also have some value to the prospective clients of private consultants. While I address consultants and offer ideas on how to communicate with their clients, I am also offering prospective clients an insight into how consultants work (or should work). This may enable them to select the right consultant intelligently and to convey their requirements effectively and have their system designed at minimum cost without sacrificing efficiency.

I would be remiss if I did not mention the names of some people whose ideas helped me greatly. The first is John Hawkins, whose column on consulting, The VAR Report, appeared regularly in the monthly magazine, The Database Advisor. Had I read his column before starting my consulting firm, I might never have done so. At the very least, I would have been forewarned and thus would have avoided some of the costly errors I made. The second is Gerald Weinberg, whose books on consulting contain his thoughts and experiences, many of which parallel mine (except that he seems to have planned well and been successful at it from the start). Had I read his book when first starting out, instead of years later, I would probably have been more successful in less time.

This book is not just a collection of stories. Every incident here is true (though names may have been changed) and each is recounted only to illustrate a point. Since almost every story here deals with a problem, it would seem that I and the other consultants mentioned could not handle the task. Bear in mind that I only mention four or five clients out of the over 300 I have helped in the ten years covered in this book. I did not see the point of detailing the more than 295 assignments that were completed satisfactorily. I hope that this book proves valuable to you. If after reading this, you decide to keep your job, I may have saved you countless hours of aggravation (and perhaps even your marriage). If you are forewarned by my experiences and avoid a conflict with a client or potential client, I have helped you maintain your good reputation. But more than financial sense, I hope I can talk to your common sense. Whether you become a private consultant or stay in the corporate world, what is most important is that you are satisfied, if not actually happy, with what you do.

Best of Luck,

Yisroel Goodman





Yisroel Goodman

Complete Computer Services, Inc.

2412 Ocean Crest Boulevard

Far Rockaway, N.Y. 11691

(718) 868-3000