Who Can Become an Independent Consultant?

How to Become an Independent Consultant?

What Must I Do to Become an Independent Consultant?

How to Join ROI Consulting?

WHO CAN BECOME AN INDEPENDENT CONSULTANT?

There are 6 core elements that every Independent Consultant must possess. People in transition from an employee position to an Independent Consultant (IC) should determine if they would be able to successfully achieve and maintain favorable results within these elements:

Sponsorship

As an Independent Consultant you must find sponsor(s) that will provide funding to compensate you for the tasking performed. More importantly, the sponsor(s) must be able to provide funding for your support through a contract vehicle that can reach you. Often, funding for individuals is tied up in a large company-based contract, which cannot be reallocated by the sponsor. These organizations often charge a "pass through fee" for sending money to Independent Consultants. These fees can range from 10% to 25%, which adds to the overall cost that the sponsor must pay to employ an independent consultant. ROI Consulting has established an independent government GSA contract, which allows government agencies to fund ROI Consulting directly. We are also a prime contractor under SEAPORT-e and have the resources to prepare and manage bid proposals for tasking. In addition, ROI Consulting has subcontractor agreements with many of the large government contracting companies. These subcontractor agreements reduce pass-through fee to less than 10%.

Financial Success

In addition to obtaining a sponsor, people interested in becoming Independent Consultants must ensure that they can achieve financial success. In short, they must be able and willing to work for the amount of money that a sponsor is willing to pay for their services. As a general rule, Independent Consultants are advised to calculate financial success based on their current man-year rate, i.e. the rate that your existing organization charges for your support. In our experience, most technical experts who join ROI Consulting have been able to reallocate their current man-year rate in a manner that is more beneficial to them and their Sponsor(s), and still achieve more than a 10% increase in salary. This is due to the reallocation of man-year charges that are normally levied on all employees to cover large companies' costs for management, laboratories, company profit, etc. Additionally, Independent Consultants are encouraged to share a portion of this reallocation with their sponsors, through a reduction in their man-year costs.

Ability to Sustain Risk

One of the few disadvantages of being an independent consultant is that we are paid when we have work, and are not paid when we do not. In today's rapid funding reallocation environment, you can lose funding for many reasons: displeasure of your sponsor, replacement by more competent or cost effective person, program cancellation, funding shortfall, etc. Having a good working relationship with your sponsor(s) does not ensure that you will always be funded. Often, funding reallocations have very little to do with the immediate sponsor's wishes. They can be the result of top-level organizational decisions or re-prioritization. There are many ways to weigh risk for an Independent Consultant. Answers to the following questions will give you a good idea of the potential risk that you may be taking:

a. How important is my tasking to the Sponsor's organization, and will it have a beneficial impact on its intended users?

b. Does my sponsor's organization, and their funding source, have a good funding profile for the future?

c. How diverse is the type of work that I perform? If I lose funding from my primary project, can I competitively support other projects and sponsors?

d. How competitive is the work that I perform? Am I one of the best performers at the price range that I require?

e. Does the work that I perform have a strong future for as long as I intend to be working as an Independent Consultant?

Strong Work Skills

Independent Consultants are now performing a wide variety of tasking in every types of field. Your ability to work as an Independent Consultant is not related to the technical nature of your skills, as much as it is the quality of your work skills, vis a vis others in your field. In short, do people want to hire you when you become available? If you are one of the people who can continuously maintain work, and are often sought after to participate in projects, then chances are you have the skills that will keep you employed. The best way to determine if you have strong work skills is to evaluate how quickly you are able to find and be assigned to new projects upon completion of your previous tasking.

Self Motivation

As an Independent Consultant, you are ultimately responsible for finding work, performing tasking to the highest performance standard, and delivering products on time and within budget. ICs are solely responsible for the success and failure of their efforts. These cornerstones, above all other factors, will be the greatest determinant of your career and financial success as an Independent Consultant. Sometimes, these tasks will be easy, but sometimes they will not. Your ability to dedicate yourself to the conduct of these tasks, to the best of your ability, at all times and under all circumstances, is a requirement for Independent Consulting and it is a quality that ROI Consulting demands from its consultants.. The best measure of your self -motivation is your prior work experience and work history. If you have a good track record of doing what it takes to get the job done right, chances are it will not fail you when you need it.

Integrity

One of the many benefits of being an Independent Consultant is the ability to work for oneself, without the need for supervision or corporate management. Sponsors that hire Independent Consultants know that they can trust these people to do what is in the sponsor's best interest, to only charge for the hours that they truly worked, and to find ways to get the work done when it needs to be done. Maintaining your sponsor's trust is a fundamental cornerstone of Independent Consulting -- one that cannot be over-emphasized. Sponsors want people of integrity that they can trust, and once that trust is breached, it is very difficult to repair. Like self-motivation, the best way to determine your ability to be a person of integrity is to examine your prior work experience.

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HOW DO I BECOME AN INDEPENDENT CONSULTANT?

If you have reviewed the 6 core elements of Independent Consulting, and feel that you have what it takes to be an IC, the next step is to develop an overview of your capabilities, work history, and costs, and prepare a detailed resume reflecting them, so that you may present your skills to potential sponsors.

In addition, there is an ethical issue which must be considered when you are identifying potential sponsors. Often, people deciding to become Independent Consultants want to maintain their current tasking and sponsors as they transition from employee to an independent. In most cases, the organization that is employing the individual will view this as "stealing work." As an Independent Consultant you want to always be a person of integrity. Accusations of stealing work will erode your reputation and can have long-term adverse effects on your business. The easiest way to avoid this very difficult situation is to choose to transition at a time when either your project or your employer is changing. If this is not possible, or in the Sponsor's best interest, then we recommend talking to your organization about your plans prior to committing to leaving. Some situations which may assist you in justifying the transfer of tasking include:

• If the Sponsor initiated tasking with the company solely to have you work on the project
• If you were the person that brought the work to the company
• If you are the only qualified person to perform the tasking

ROI Consulting does not like to initiate difficulty with other service provider organizations. We promote the concept of harmony among all participants in a project, and do not want to take any steps that will undermine the success of a project. This is why we strongly recommend addressing work transfer issues with the Sponsor and existing employers prior to any decision to become an Independent Consultant.

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WHAT MUST I DO TO BECOME AN INDEPENDENT CONSULTANT?

After you determine that you want to be an Independent Consultant, and establish working arrangement with your Sponsor, you are ready to start working. The obvious side of working entails performing tasks assigned by the Sponsor, tracking hours worked for each task, and developing Vouchers and Invoices (software provided by ROI). In addition, the following list of things will also have to be addressed, and our staff at ROI Consulting will be able to help you through them, or perform them on your behalf. .

I. Benefits: Benefits include insurance and retirement planning. For insurance, consider health, disability and life insurance policies. Retirement planning options for independent contractors include Keogh, 401(k) and SEP-IRA.
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II. Company Requirements. These requirements include:

A. Establishing company entity (with assistance from Lawyer). Tasks will include: developing operating agreement; establishing company entity with state and federal governments; holding and recording annual meetings and filing annual reports with state governments.

B. Work Contracts. Tasks include: responding to Requests for Proposal (RFP); and developing multiple statement of work documents.

C. Establishing an office; finding work space, equipment, furniture.

D. Setting up Company Financial System. Tasks include: determining accounting method; establishing company accounts; establishing funding and expense tracking system; setting up a biling system; establishing contracts, developing vouchers, tracking accounts payable, etc.

E. Tax preparation (with assistance from Accountant). Issues include: self employment tax, maximizing tax benefits from self-employment; paying and filing quarterly taxes; developing 1099s.

F. Security clearance. Tasks include: sending visit requests; establishing and maintaining personnel clearance; classified document storage; classified computer hardware.

Often, these aspects of Independent Consulting become the most difficult to manage. Most Independent Consultants decide to go out on their own based on the proficiency of their work skills. On their own, many independents do not fully comprehend the level of effort required to effectively manage the operational aspects of being an independent company. Many people, including the founding members of ROI Consulting, found out that managing these tasks would take 5 to 10 hours a week for each person after the initial investment in time, which was even higher. Because these hours were not chargeable to any task, they were considered income lost. This lesson learned by the founders of ROI Consulting, became the basis for the initiation of the company. ROI Consulting has established processes, support personnel, contract vehicles, and tools to perform all of the tasks listed above. Independent Consultants that operate under ROI Consulting are presented with options for maintaining each aspect of their company's tasking, and provided information pertaining to the pros and cons of each option for their unique skills and personal profile. The Independent Consultant determines how they want their company to be run, and ROI Consulting does the rest.

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HOW DO I JOIN ROI CONSULTING?

ROI Consulting was established as an association of Independent Consultants, working together to improve every member's efficiency and effectiveness. The Company does this by paying third parties to develop tools/perform tasks that are non-income generating for the Independent Consultant, and sharing lessons learned among all members, to improve processes, thereby ensuring efficient and effective operation.

The costs for development of these tools and other support is derived from a 10% contract pass-through fee. This money is maintained within ROI to support member consultants with: establishing a company entity, taxes, litigation insurance, maintaining contract vehicles, tracking funding, etc. ROI Consulting pass through fees have been established such that they are less expensive than the loss of income incurred by each Independent Consultant performing their own administrative, legal and accounting tasks associated with running a business entity. In addition, they are over 50% less than the standard pass-through fees for Independent Consulting through a contractor company.

If you decide that becoming an Independent Consultant is the right move for you, we believe that ROI Consulting can help you achieve your goal. Contact us to arrange for an appointment to discuss your goals.

 

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