Setting up a small consultancy

[northernladyuk]

I know one or two people have done this on CUK but can't remember who (and I don't like the word consultancy)

I work in a small niche market where there is big growth expected over the coming years. After 10 years consulting solo, I'm hoping over the next month to sign a deal which will see me go into a client as a contractor and then fill some additional roles through MyCo, manage these contractors within a team, and make a reasonable mark-up.

Any experience out there of doing this? Main concern for me is cashflow, and of course the hassle of dealing with 'churn'. I quite like the business development side and have developed a good network of senior people who make buying decisions.

Interested in experience and pitfalls etc.

[MrMarkyMark]

I know one or two people have done this on CUK but can't remember who (and I don't like the word consultancy)

I work in a small niche market where there is big growth expected over the coming years. After 10 years consulting solo, I'm hoping over the next month to sign a deal which will see me go into a client as a contractor and then fill some additional roles through MyCo, manage these contractors within a team, and make a reasonable mark-up.

Any experience out there of doing this? Main concern for me is cashflow, and of course the hassle of dealing with 'churn'. I quite like the business development side and have developed a good network of senior people who make buying decisions.

Interested in experience and pitfalls etc.

Have done something similar before.

Do you have any good people you have in mind for the roles?
Is the client prepared to pay regularly?

You could look at getting someone to factor the invoices for you, although that will cost you.

[northernladyuk]

Have done something similar before.

Do you have any good people you have in mind for the roles?
Is the client prepared to pay regularly?

You could look at getting someone to factor the invoices for you, although that will cost you.

Good questions.

Do you have any good people you have in mind for the roles?
To an extent. The skills don't really exist in Ireland, and flying people in from the UK isn't working. I have clients who are prepared to take good local people without quite the right skills, to grow the skill base.

Is the client prepared to pay regularly?
You could look at getting someone to factor the invoices for you, although that will cost you.
In theory yes. I am looking at a large partner to factor / payroll. It will cost but may be the only way to guarantee paying people on-time, and that is an absolute 100% must do for me.

[MrMarkyMark]

Good questions.

Do you have any good people you have in mind for the roles?
To an extent. The skills don't really exist in Ireland, and flying people in from the UK isn't working. I have clients who are prepared to take good local people without quite the right skills, to grow the skill base.

Is the client prepared to pay regularly?
You could look at getting someone to factor the invoices for you, although that will cost you.
In theory yes. I am looking at a large partner to factor / payroll. It will cost but may be the only way to guarantee paying people on-time, and that is an absolute 100% must do for me.

Some agencies will do the factoring, especially the big players, was going to cost me 5%.

[northernladyuk]

Some agencies will do the factoring, especially the big players, was going to cost me 5%.

5% is what I would expect in the UK.

They also have the size to contract with public sector through a tender, which I can't, but they lack the contacts and expertise.

[MrMarkyMark]

5% is what I would expect in the UK.

They also have the size to contract with public sector through a tender, which I can't, but they lack the contacts and expertise.

I was going to set mine up as a managed service, with the big agency taking 5% to factor my invoices.

There was going to be an opt out after a number of years where everything could become my responsibility.
i.e. they would no longer be involved.

[Sub]

Success is mostly depending on how good you will be with managing relationship with people you want to bring in.

In fact, not that many people are capable to deliver in time and agreed quality. Usually ones who are - busy and expensive professionals. Bringing somebody else on site is huge risk, that client will be disappointed. That is actually huge jump from one-man band as you will have much less control over success with any particular customer. To me it required more mindset change than jump from permie to one-band limited contractor.

I am hiring people time to time in order to do job I unable to perform (due to location or skill set), but it is seen by cx as part of delivery package. I managed to find none from open market - all these guys I know from my past (worked with them for employers, clients, etc.).

Good luck!

[northernladyuk]

I was going to set mine up as a managed service, with the big agency taking 5% to factor my invoices.

There was going to be an opt out after a number of years where everything could become my responsibility.
i.e. they would no longer be involved.

How did it work out for you?

[northernladyuk]

Success is mostly depending on how good you will be with managing relationship with people you want to bring in.

In fact, not that many people are capable to deliver in time and agreed quality. Usually ones who are - busy and expensive professionals. Bringing somebody else on site is huge risk, that client will be disappointed. That is actually huge jump from one-man band as you will have much less control over success with any particular customer. To me it required more mindset change than jump from permie to one-band limited contractor.

I am hiring people time to time in order to do job I unable to perform (due to location or skill set), but it is seen by cx as part of delivery package. I managed to find none from open market - all these guys I know from my past (worked with them for employers, clients, etc.).

Good luck!

Thanks.

[edison]

It's very tough to pull off successfully from what I've seen with friends and colleagues who tried to do the same after working as employed consultants and myself at a small consultancy. This was in IT and non-IT sectors.

As hinted above, there'a big leap from being a one man band to a fully fledged 'consultancy'. Your competition changes, you may be competing against other small to mid-size consultancies, sometimes even against one of the big boys.

Do you have a market proposition? Have you looked at the potential competition and understand the market? What will your USP or competitive advantage be?

There's also the factor of scalability- I reckon you need at least six people to be seen as a consultancy in a potential client's eyes. How do you demonstrate credibility working at a larger scale?

It's easy to fall into a trap of becoming heavily reliant on one main client with dribs and drabs from a variety of other clients. This poses a large business risk if you lose the main client. I've seen small consultancies go bankrupt or only just avoid going out of business by making half their staff redundant when they lost their main client.

You also have to maintain a tricky balance between sales pipeline development activity and delivery of current work - again, it's not an easy thing to do if you're not used to it.

Good luck!