Starting Out - Beginning Life as an Independent Consultant

Archive of Older Topics Archive - Specifications Discussions #3
1

Although currently employed by a very good firm, recent life experiences outside of the workplace have caused me to consider becoming an independent spec consultant. Since this august body includes independent spec consultants and probably a few spec writers currently with firms who were independent consultants at an earlier time of their lives, I thought I might seek some of your wisdom as I ponder this change.
How did you know it was time to become an independent consultant? How did you develop a large enough client base to support yourself? What would you do differently, and, ultimately, would you do it again?

Your comments are greatly appreciated.

2

A few observations and personal experience becoming an independent specifications writer —

How did I know it was time? When I was an employee working overtime in a firm that was laying off staff, I suggested that I write specifications as an independent contractor but remain a part-time employee for continuation as a construction contract administrator. I was told I would continue to do both jobs but now as an independent contractor. That wasn’t bad news. As many independent specifiers have found, an excellent first client is your last employer.

Note: I was already a member of SCIP and had been intending to become an independent specifier for five or more years, and was doing some “moonlighting” as an independent specifier. Check out the SCIP website (www.scip.com) for information about becoming an Affiliate member of SCIP.

How to develop a large enough client base? It greatly depends upon the community you are in. If the architectural community expects to have project manuals accompany the drawings (especially for school and hospital projects), then the demand for specifications writing services may be substantial enough that the work will find you. If not, then consider relocation. There are major communities that are underserved by independent specifiers. San Diego is one area I am aware of. Referrals from other specifiers assisted me initially and I’m currently making referrals to other specifiers in my community for projects I cannot or do not wish to take on. It’s interesting that in a community with many independent specifiers (Los Angeles/Orange County and the San Francisco Bay Area are two examples), the available work seems to be abundant. I think it’s a Standard of Care issue. The standard is to have substantial specifications prepared for typical commercial, industrial and institutional projects.

What would I do differently? It would be nice to have financial resources to take care of the legal and accounting matters of a start up consulting practice. But the reality is, the generation of fees to cover current living expenses is the major concern. That is, get work, do the spec, invoice for it, get paid and do another is the primary concern. The other stuff follows along eventually.

Would I do it again? In a heartbeat. The comments I have heard from those who “declared independence”, such as “I wish I had done this sooner”, are common and encouraging. At the same time, this should not be taken as a criticism or put down of specifiers who work for firms as employees. There are many benefits and advantages to being an employee (regular paycheck, regular working hours, perhaps more substantial projects).

It’s a matter of counting the cost, figuring out what it will take (and you’ll never get all the detail figured out in advance) and taking the leap.

/John Regener, AIA, CCS, CCCA, CSI, SCIP
Immediate Past President
Specifications Consultants in Independent Practice (SCIP)

3

Like you, I’m currently in that transition mode, but maybe a step or two ahead.

Although not formally an independent (I work full time with a design firm as a specifier), I do work on the side, of which my firm is fully aware. However, the break is coming very soon and retaining my current employer as a client seems very likely (I’m even considering the prospect of working part-time as a contract employee for them).

I felt the time came when people I’ve worked with in the past (either coworkers who left for other firms or employees of other firms we partnered with on joint projects) started to approach me about doing their specifications and building code consulting.

What has helped me in making my decision? CSI. Through certification and involvement in the chapter, I have name recognition within my local area. Get involved and get certified (if you aren’t already)…be an instructor for chapter educational seminars and programs, write articles for your newsletter, be active on discussion forums (both here and on CSInet), attend region and national conventions, and finally, let people know that you’re in the professional business of writing specifications.

And this doesn’t just mean architects–approach product reps about doing their manufacturer’s specifications (most need all the help they can get), approach trade organizations that develop standards or guidelines, approach owners that have design guidelines (i.e. universities, community colleges, school districts, etc.) about updating their documents, and if you’re a very good marketer, approach engineers about helping them update their in-house specification masters. These are just some ideas.

Like you, my concern is cashflow (I currently have a substantial amount in A/R that I’m currently working on to get paid), but it’s the typical “paid when paid” system that architects use.

Since I actually haven’t “done it” yet, I can’t tell you if I made the right decision; but I have several people behind me pushing, which is comforting to know. Because of that support, when I do take the plunge, I don’t think I’ll ever have to say, “I wish I didn’t do that.”

4

I would add one other negative to John’s list and that is benefits, I was fortunate that I was able to remain on my wife’s insurance, albeit its not the best in the world, but as an independent insurance is expensive and the monetary benefits take time to materialize…the biggest benefit is flexibility with your time, sure I work long hours, sure I work crazy hours, but when my family needs me during the day, I am the boss, so I make the decison on how my time is spent. As far as John’s comment that you may not get to work on the large choice projects, that’s hogwash, I am working on huge projects all around the world, I chose not to work in the public sector (too many schools and airports burnt me out), the private sector especially hospitality work continues to fill my needs for exciting projects.
I would agree on the accounting issues, I did not spend the time setting that up correctly at the start of my business and it has plagued me ever since.
The biggest disadvantage to being a self employed consultant is getting paid - its important to be persistant and unyielding, and having patience.
In regards to getting the work look for small firms where the principal is preparing specs as part of his responsibility, sometimes you can find this out from manuf reps, the overworked architect who is doing specs because he has no one else to do them is a future client.

5

I’m not an independent, but have chosen to remain in a firm for a bunch of reasons you may want to consider:

  • I like working with a bunch of other people around
  • Doing things that go beyond pure specifying because I’m good at those tasks and they need to get done
  • Not having to rely purely on “self-motivation” every minute of the day to keep up my momentum
  • Not having my work life invading my home life because of a home office environment
  • Having a bunch of other smart people around to chat with and work out problems (goes both ways, when they wander around to my desk)
  • Feeling the “buzz” of a busy office
  • Being invited to design crits, project reviews and kick off meetings
  • Going to site visits and still getting paid for the time
    To some these things may not be very important, but to me they are. Plus, my firm is flexible to a reasonable degree about work hours.
6

I’ve been both – I was with a firm for 9 years, was independent for 10 years, and have been with a firm for 9 years.

I went back to a firm for all the reasons that John mentions and also because in the Seattle area, the big interesting projects are always done by in-house people. And, I happen to like big complicated projects. I also wanted to be working for a firm that did work all over the country, because my consulting was limited to the northwest, so I was hit pretty hard when we had downturns.

I always made “enough” money, but it was unpredictable. In fact, I made pretty good money because of the tax benefits that came from being self employed. (writing off the phone, the car, the housekeeper, etc.) In fact, if money was my only criteria, I did much better self-employed than employed. However, the work was boring, and that ultimately became more important.

I’ve heard all types of “have 6 months income in the bank” sorts of advice. I was never that disciplined but one thing I did do that was smart – I paid cash up front for EVERYTHING. I never assumed that I was going to get a check when I wanted it, so I never had anything outstanding except for the utilities and the housepayment. And, I kept my house payments low for the entire time so that I didn’t have to get frantic about money.

there aren’t many spec consultants out there, and word gets around fast. The biggest issue I hear with some consultants is that they drag out their work schedules too long and end up putting in 16 hour days. I think the schedule is more manageable than that, but you have to find your own balance.

on the whole, I’m glad I was independent, because that has given me a different attitude about being an employee – I’m more self-motivated, and more diligent, and more resourceful. I also like being paid to do my actual job instead of the bookkeeping and infrastructure management that comes from being self employed.

I do miss my afternoon bike rides, though.

7

I have recently gone independent by purchasing the business of another well respected, local specification consultant. He has assisted me by introducing me to his clients and refering phone calls to me. He also sends me files of past projects for certain clients and special sections he has developed for particular applications. He has been very generous with his advice, but accepts that it is my practice now. This has “kick-started” my marketing, making an initial intensive marketing period irrelevant.

The firm I was working for wanted me to keep doing their specifications. They enticed me by leasing me a cubical and computer at a very reasonable cost. The name of my company is on the door, and I have my own phone number; however, I am able to use the library and conference rooms, and someone receives packages. They respect my need for business privacy and no one seems interested in pawing through my files looking for “proprietary” information that could be found in the drawings produced by other firms. Because they outsource payroll and benefits, I was able to be added on as a separate worksite division. This greatly reduced the work and anxiety of going out on my own and having to deal with taxes and insurance issues.

To date (after 8 months of oprations), my old firm accounts for less than a third of my work, and they will probably end the year paying me in fees about what they would have paid me in salary exclusive of whatever benefits they would have paid me. I would say that works pretty well for both of us.

I have found I like working with other offices. It is a challenge to keep up with office standards and individual preferences, but I find that I am able to have some impact on the practices that I really disagree with; most of the others are simply preferences anyway. There is a wider range of scale, type, and location of projects that I find interesting, and I find myself learning more each day.

There is so much work in this area and so few available specification consultants that I don’t worry too much about competition. I want to place my firm competitively so that I compete on the basis of quality of service not price. Right now I know that I have about as much work as I can handle and I know that my competitors are in the same boat. Next year, it may be different (I have been around this business long enough to know that).

I have been fortunate to have gotten a jump start in several ways, but in retrospect, I know that I could have gotten started doing this without that initial assistance; I just would have had to have more money in the bank.

The best piece of advice I can give someone thinking about this is to focus on cash flow. There are some initial start-up costs (computers, master specification subscriptions, references, etc.); you may have more or less depending on how you want to get set up. If you can, start your business by moonlighting (with your employer’s permission). You may find that your current employer is open to your making a transition to having your own practice by having you work as a contract employee, paying some rent for a cubicle, and sharing a reference library. If you can’t do that, you need to have some start-up cash (in the $5K to $10K range) plus 4 to 6 months living expenses in the bank to cover the lag in cash flow.

I must also add that some people are not entrepreneurs. The uncertainty can be way more of a burden than some will be willing to accept. Most people who have worked in design practice accept killer workloads; the difference is now you can make it worth your while to work until midnight. A friend of mine recently told me that he believes most architects are entrepreneurs at heart and the one’s who haven’t been in practice for themselves will be. I would say that this is an accurate perception of most people who successfully work in A/E firms. Success in this environment often depends on a initiative and willingness to work with ambiguous situations. Both of these characteristics are useful for entrepreneurs. If you find yourself most comfortable with clear schedules, goals, and lines of authority, and really don’t enjoy being a self-starter, then you are probably not suited to having your own business. If you relish the challenge of bringing order out of chaos (and cash out of accounts receivable), then you might want to think about it.

8

another way to avoid paying rent for a cubicle in an office is to offer a discounted rate (like: 20% off your rate) to that firm – I did that for about six months before I moved into other office space.

the time management aspect of being self employed is very different than being employed. You will need to take advantage of both circumstances: being “over employed” (ie, working until midnight) and being “under employed” (being able to work 4 hour days) and really enjoy those times when you’re not busy, simply because you have enough work in the pipeline to keep you busy next week. I knew one consultant who more or less stopped work every October – he had earned enough money for the year – and then he used that time for projects around his house and enjoying his child. that always seemed immensely sane to me.

9

I’ve been a consultant for 22 years, and am totally unemployable.
I suggest that you have financial resources to “make it” for at least 6 months, better a year. You will almost always get paid eventually, but sometimes eventually is a long time. Once you are established, the occasional laggard isn’t a killer for you as you will have adequate cash flow from other clients.
As far as getting business: If the construction climate stays like it is now, that shouldn’t be a problem. There may be a few areas where there are “too many” consultants, but generally the opposite is true. The Los Angeles area, where I work, has recently absorbed several new ones, and as far as I know it hasn’t hurt any of the existing consultants.
To keep overhead low, my accounting system is very simple, I do everything myself, and my office is in my home. Admittedly, my home is fixed for the purpose (because I added 700 square feet to make it so). But I suggest home office for a new person. Office overhead, utilities, phones, etc. can eat into fees very substantially.
Some of the Los Angeles area “famous” consultants have never had offices outside their homes, and they have done very well.

10

I made the plunge to be an independant specifier in January of 2005. I had been layed off in March of 04 and finding work in western Michigan was not happening. I was not going to move away, and I had always enjoyed working on specifications for my own projects as an architect. It makes you a better architect. I had the certifications, experience, motivation, and I felt the time was right for me. I did research by contacting other independents in the Chicago and Detroit areas by meeting with them and asking questions. Most were very supportive. I took some adult ed classes in starting your own business. I also recieved much support from my wife who has a MBA from U of M and her own business.
The work started out slow. My marketing strategy consisted of stopping in on AE firms and spending what time I could get to discuss my services. I recieved help to create a website for my business and became a member of SCIP. All of these strategies have brought in new clients.
After almost two years, business is good. I am building a diverse client base, developing strategies to better manage the projects and information. Continuing to learn through very active participation with CSI and other organizations. The flexibility allows for opportunities I would have to pass on working for a firm. The challenges are a stretch and that is good. The financial benefits are rewarding as well, but it cannot be just about the money. Some days can be very long and you should like what you are doing.
If you feel it is time and the right thing for you, go for it. I am very happy that I did.

11

I started out working for another independent, so the independent life is all I have known, although I have experience working for someone and being the boss. I couldnt imagine going to work for a firm, for all the reasons listed above as positives. I get to work on a wide variety of projects, which keeps me from ever getting bored. It was tough starting out, but I was fortunate enough to have a supportive spouse. I found the AIA to be my best marketing source I attend meetings regularly and network, network, network. As a result, I have several excellent, loyal clients and I have the benefit of working with different types of firm cultures. One of the biggest negatives is that I am often not brought into the project until the last minute, so be ready for ridiculous schedules.

I started out at home for the first 3 years. As business grew, my condo became an office w/ a bedroom in the back. When I was eating meals on my bed, I decided it was time to move out. I rent space in an executive suites building, so I have the benefit of a full-time receptionist, and someone to receive packages. It takes a lot of discipline to work at home and to STOP working while at home. If you can start at home, I recommend it. I knew when it was time to move into an office and it is worth every penny to me. Others work out of their home their whole career.

As a side note, depending on where you are located, and your experience, we could discuss my firm subcontracting some spec work out to you. I need help!

12

Also - forgot to “second” Jerome’s comment about benefits - especially insurance. My health insurance is $300/ month - this takes a bite out of profits. If you decide you are ready, email me or call me and I would be happy to help you further robin@spectraspecs.com 480-776-5885

13

I worked for large firms for about 25 years, then went independent. I had done a little moonlighting and socked away tht money, and both that money and my accrued vacation pay were enough to get me started.

Generally I have found that the world will beat a path to a specifier’s door, if you do a minimal amount of advertising in AIA/CSI local newsletters and of course get your name on hte SCIP website.

It seemed scary to me before I did it, but I just could not see myself being an over-50-year old spec writer in an architectural company. And I also hated to commute to work. I hated the retreats, kissing up, wondering if I would get that bonus.

I believe the income potential for independent specifiers is good, if you manage your clients and manage your business. The biggest stretch for me was learning basic accounting so I could get an invoice out and pay my taxes on time.

I would do it again. It is in some ways more flexible. You pick your own hours, but you’ve got to deliver on time with no excuses. While you can’t get “fired” by your company, you can still get “fired” by your clients.

My advice - incorporate and buy e&o insurance, then do the best quality work you can possibly do, as if your future depends on it.