Click to Print

Get With The Program

How to be a smarter . . . computer consultant.
January 1, 1998
URL: http://www.entrepreneur.com/article/15242

With the entire nation going high-tech, it's no wonder computer consultants are in demand. But don't think it's an easy way to profit from the high-tech boom. It takes skill, hard work and even a little luck to make it in the computer consulting field.

One of the most critical concerns is determining the scope of your consulting services. Specialization is the way to go, according to Debbie L. Handler of the Independent Computer Consultants Association (ICCA). "You don't want to try to do everything; that spreads you too thin," she says. "Find a niche, and be the best at it."

If you've worked in a particular field, that may be your first choice as a specialization. But make sure that expertise is in demand, cautions Max Steiner of the National Association of Computer Consultant Businesses (NACCB), a 300-member association of temporary agencies that finds assignments for computer consultants. The rapid pace of change in technology means the field you specialized in just a year ago may now be obsolete.

If you don't have an area of expertise but want to cultivate one, a number of companies offer certification programs. Microsoft is a good example. The software giant offers training and exams you can take to gain certification as a systems engineer, solution developer or product specialist for Microsoft products. The training is offered throughout the United States, or you can utilize self-paced or online learning programs. To find out about Microsoft training, visit the company's Web site at http://www.microsoft.com or contact Sylvan Prometric, a Baltimore-based firm that administers certification for Microsoft and 59 other firms, at http://www.sylvanprometric.com You can find other information technology trainers by contacting the Information Technology Training Association Inc. at (512) 502-9300 or by visiting its Web site at http://www.itta.org .

The Search Is On

Finding clients is your next challenge. That's where trade organizations such as the NACCB and ICCA can help. NACCB member companies, for example, act as agents to secure jobs for independent consultants. Agencies' contacts can lead to contracts independents might otherwise never hear of. A good agency can also help you understand the corporate culture of a particular client.

"To find a good agent, interview people," Steiner says. You can do this over the phone or in person. "A good agency will want to know your technical skills and should ask about your career goals."

Once you've registered with an agency, be upfront: Tell your agent how much money you want to make on a particular job. They will tack their fee on top.

If you prefer not to use an agency, you'll have to advertise and network to get your name out there. ICCA is one networking resource. "By becoming active in your local chapter, people will tell you about clients who are looking for consultants with particular specialties," Handler says.

ICCA members can list their companies and specialization on the association's Web site (http://www.icca.org ). Most ICCA chapters also run referral services.

Placing ads in the newspaper and Yellow Pages will generate plenty of calls but probably not much in the way of solid business leads, says Janet Ruhl in The Computer Consultants Guide (Wiley & Sons). If you go this route, carefully tailor ads to your target audience.

Consultants who specialize should consider advertising in industry publications. For example, if your focus is accounting software and systems, ads placed in magazines such as National Public Accountant or Internal Auditor might generate business. Detroit-based reference publisher Gale Research puts out a hard-cover and online edition of the Consulting and Consulting Organizations Directory. It's updated annually in August, and the deadline to submit a free listing is in April. To submit your company profile via the Internet, visit http://www.interlog.com/~ndallen/

Establishing a Web page is another excellent way to advertise, says ICCA's Handler. And don't forget to register your page with all of the search engines on the Internet. (See "Nothing But Net" on page 70 for more information.)

For A Price . . .

Even before advertising, however, it's important to determine your fees. Most consultants bill hourly for time and materials, says Ruhl. According to a 1992 survey of computer consultants by Khera Communications Inc., a computer consulting firm in Rockville, Maryland, the median rate for all types of services is $55 to $60 per hour. But, cautions Ruhl, don't base your fees solely on the national rate because the going rate in your region for your service and experience will dictate how much you should charge. To find the going rate, ask other consultants in your region what they charge or ask local consulting brokers what they would pay you hourly (add 40 percent for their commission).

Some consultants base their rates on an estimated cost of doing business. To determine this, you would estimate your expenses, decide the annual income you want to make, divide that figure by 1,000 (the number of hours per year used as a base figure by CPAs and other professionals) and then establish an hourly rate that covers expenses and yields the desired income. Ruhl offers an even simpler way: Take the annual salary a person of your experience would receive and divide by 1,000. Whichever method you use, remember that the result will be tempered by the going rate in your area and your experience level.

Obviously, operating a computer consulting firm is more than a matter of technological troubleshooting. It takes entrepreneurial know-how and a willingness to take a risk. If you fit that bill, then boot up your business and get growing.

C.Y.A.

There's one other vitally important question to answer: How will you protect yourself if something goes wrong? The answer is simple: Purchase errors and omissions (E&O) insurance.

E&O insurance provides coverage for claims of alleged damages as a result of an error, omission or wrongful act in the performance of an insured service. E&O can cover legal fees and defense costs as well as the damages awarded, says Sheila Allen of Allsouth Professional Liability Inc., an insurance company in Tampa, Florida. Premiums for basic coverage start at about $1,000. The best place to look for this insurance is through a broker. Get recommendations from associates or check with the Independent Insurance Agents of America (http://www.iiaa.org ) for their directory of agencies.

Real Life

The idea of owning a business intrigued Ray Rauth so much that he left a comfortable job in the academic computer center at City University of New York in New York City to co-found a computer consulting and training company in 1982. But after about a year, Rauth, 56, decided to consult for the company he helped found.

"I wanted to step out of management and be more involved in the technical aspects," says Rauth, now co-owner of Pine Creek Consulting LLC, a computer consulting firm in Westport, Connecticut.

Although he worried about the decision to go independent, Rauth knew he had one major plus on his side--his former company was pleased with his work and planned to work with him long term.

Rauth also had leaped into computer consulting in its early days--and starting early paid off: Today Rauth has six clients, and he brought in a six figure income last year.

Finding and keeping clients has been a challenge for Rauth, however. "Like most consultants, I'm not really marketing- or sales-oriented, and I find it difficult to do," he says. Instead, he emphasizes customer retention and networking with peers through the Independent Computer Consultants Association (ICCA).

Rauth's networking is helping move his company to the next level. His recent merger with another firm to form Pine Creek was done because, he says, "I think business has changed so much that a one-person shop has difficulty doing off-site work for larger companies. Technology is more complicated and requires us to spend more time [at a client's] site. It gives one organization more capabilities, and clients appreciate it."

And therein lies the key to becoming a successful computer consultant. You have to be responsive to your clients' needs and keep pace with an industry in a constant state of change.

Contact Sources

Allsouth Professional Liability Inc., (800) 913-9260, marketing@allsouth.net

Khera Communications Inc., http://www.kcilink.com

National Association of Computer Consultant Businesses, http://www.naccb.resourcecenter.com

Ray Rauth, (203) 846-2535

For additional information on computer consulting, log on to the following Web sites:
http://www.consultlink.com
http://www.occ.com
http://www.monsterboard.com
http://www.expert-market.com
http://www.just4u.com/webconsultants
http://www.computerwork.com
http://www.cvp.com/freelance
http://www.ceweekly.com
http://www.icca.org
http://www.allianceofconsultants.com