Star Techies

Sufficient Memory

In today's consulting marketplace, the primary talents you'll need are marketing savvy, business skills and access to cutting-edge technological abilities (yours or your staff's). In the old days, computer consultants could be generalists, coaching clients on the distinction between hard drives and floppies, or training them in the basics of word processing. Now, more businesspeople are computer literate and are handling the functions consultants used to handle. Consultants, in turn, are called on for more complicated work-custom programming, for example.

If higher skill thresholds put greater demands on consultants, they also put consultants in greater demand. John Hammerbeck, owner and president of The Systems Group Inc., a data processing, contracting and consulting firm in Dallas, says even large corporations have trouble keeping pace with progress. "It's impossible for one company to maintain the staff they need to deal with new projects and technologies," says Hammerbeck. "It's easier to bring consultants in than it is to keep all the qualified people they need on staff."

Providing qualified personnel is the core of every consulting business. But the ways firms maintain their talent varies widely.

The simplest consultancies involve solo subcontractors. Subcontractors work with established consultants, who provide contacts and contracts in exchange for a percentage of the subcontractor's fee.

Though it has its limitations, subcontracting can be a low-cost, low-risk way of going into business. "If your main goal is a steady flow of income, you can stick strictly to subcontracting," says Ricki Letowt, owner of Letowt Associates Inc. in Norwalk, Connecticut, who began consulting as a subcontractor in the early 1980s. For technical wizards who lack the marketing gene, subcontracting can be ideal.

For true entrepreneurial types, going independent may be a more rewarding choice. Like subcontractors, solo consultants do their own technical work. But they also handle the "business end" of running a business-client development, cash flow, strategic planning and so on.

Some solo operators find that one person-and one area of expertise-can't cover it all. Letowt, for example, has clients who want computer networks set up. Since that's not her speciality, Letowt acts as a broker between other consultants and her clients, and receives a percentage of the revenues-thereby maximizing her sales and her value as a client resource.

What if you're more business-oriented than technologically inclined? Then consider following Dominic Schilt's lead. In 1988, Schilt co-founded DHS & Associates Inc., a systems integration and information systems consulting firm in Rosemont, Illinois. Though Schilt knew enough about technology to understand his markets-and even to take on a few early assignments himself-his plan was to build a team of consultants he could oversee and develop.

On this scale, says Schilt, "the most important thing is understanding the business of business. I have a good, strong business sense and a sales background, which has helped. I'm not certain that technical knowledge is as important, for example, as understanding cash flow."

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This article was originally published in the January 1996 print edition of Entrepreneur with the headline: Star Techies.

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