The XKCD comic below captures the dynamic of consulting quite well. Many consultants are the ‘Smart Engineer’ guy, but I think a consultant that wants to do the job right should combine lessons from all three guys: don’t game the client, don’t be pedantic about technical details, and be grounded in the reality of doing something.
I think I may be coming to the end of my college teaching career, and I’m remarkably neutral about this development. I enjoy teaching, and the last couple years of teaching a grad course at Elite DC University and an undergrad intern course for Prairie University have been loads o’ fun in different ways.
It was great to get back into teaching after a couple years of not teaching; the last time I taught full-time was at Prairie U, and I had two classes each with 300 of my favorite students…ugh, I often thought of such teaching as ‘info-tainment’ or ‘performance art,’ not teaching. Students who had taken my upper division seminars on foreign policy knew enough about me to discern my dislike for the large intro classes.
Lately, the consulting side of my portfolio of income-generating activities has really picked up, which means international travel for 2-3 weeks at a time. Weeks of travel impact both courses, but it is the Elite DC course that would make me turn down business, a bad trade financially and professionally. It is one thing to schedule the policy experts for my Prairie U interns and ask a program colleague to herd the student-interns around once a week for a couple weeks, it is something else entirely to cancel a few weeks of a grad course because it would be tremendously difficult to find a volunteer with enough expertise to handle the class meetings for that period of time.
In addition, part of the reason I was teaching was to keep my hand in academia, because I always thought that under the right circumstances I would take a university-based research/project management/teaching position. As the years go by, though, I’m less and less interested in anything besides research projects, but even then I want them to be my projects and I think I want to keep my external status. I should also mention that most academic positions would represent a step backwards in compensation, which is unacceptable to me at this stage of my life.
All of us have those points where we have to let go of something and head a different way. I feel like I’m at that point with college teaching.
In case anyone missed this, in July the Congressional Research Service released a report analyzing various recommendations for foreign assistance reform:
Foreign Aid Reform: Studies and Recommendations, 28 July 2009, Epstein/Weed
My recent office space exploration highlighted to me the great extent to which technology has changed my work. I don’t say this as a forty-something-year-old trying to come to grips with newfangled mobile devices, but rather as someone who has been an early/active user of technology, so the change has been so incremental that I never really recognized the full scope of it.
I first learned computer programming about 30 years ago: FORTRAN on punch (aka Hollerith) cards via mainframes, then BASIC on audio cassettes via TRS-80 computers, then BASIC on 8″ floppies via TRS-80 III computers (official motto: “Now with 64k RAM!”). I wrote my own stock market game in BASIC, as well as a program to schedule altar boys for Sunday services at my church.
In college, I was one of a handful of advanced students in a finance/investments course who learned how to analyze and plot data using Lotus 1-2-3, and then for two summers I worked nightshift (6pm-2am) computer operations mostly making backups of an IBM System/34 mainframe with magazines holding ten 8″ floppies (and teaching myself the fundamentals of RPG-II and COBOL).
In my career at a Chicago bank, I helped design and debug PC-based software in the pre-Windows era for electronic money movement of all kinds, using a desktop Compaq Portable II (26lbs, 10MB harddrive) in the office or a Toshiba T5100 laptop (15lbs, no battery) for the road; for demonstrations on marketing/sales calls, we used ‘the coffin,’ as we called the huge/heavy projecter that was then state-of-the-art. I also had one management position in the very early 1990s that involved beta-testing document scanning/storage as well as telephony that would call up the customer’s record on the screen of the service agent receiving the call. In one way or another, most of my professional career was built around different ways to electronically exchange information and value, eliminating the need for paper documents and manual processing.
After moving away from developing business applications using computer technology, I did maintain a bit of my geekiness — I prefer PCs because I can play around with the hardward/software guts of them, I use keyboard combinations in programs instead of the mouse, and I’ve been a big fan of freeware like Eudora, Opera, Firefox, Thunderbird, etc…for example, I had a Windows 98 machine at home when I bought my first iPod, which forced me to install USB ports and then when iTunes wouldn’t work to find/download a freeware driver patch that would let me use the iPod via the PC. I have always been careful and frugal about my technology purchases, and have had one PC or another at home for about 20 years now. My first cell phone was one of those ‘bag phones,’ which we bought one summer because my wife was driving four hours to visit me on the weekends while I did language study at another university. My current phone is pretty old technology, but it’s prepaid and costs me very little every month. I have set up and maintained my own websites for over ten years now, not to mention this blog and other social networking applications. My current laptop is 2GB dual core, weighs 5.5lbs including the battery, and has been tweaked every which way possible.
So, it’s not like this stuff just showed up on my doorstep like a package from the Unabomber.
Thinking now of my present office and out-of-office needs, it is amazing what we can do now. Between my current laptop, thumbdrives, scanning, and electronic documents, I don’t need to maintain a giant library of books or file cabinets of documents. Heck, for that matter, with mobile devices like the Palm Pre (which lets me manipulate documents/spreadsheets), ebook devices like Kindle (which can display PDFs), and client conference rooms with built-in projectors, I could practically leave the laptop at home and not miss a beat — I could keep my phone in my pocket and carry around a folder holding my Kindle and a thumbdrive, in the US or even internationally.
How’s THAT for change over the last 30 years?!
I’m actively contemplating office space outside my home. The economics of this are doable, but I’d prefer sharing space to keep the cost down. I would very much like to hear other people’s experiences with this, too, just to get a better picture of what I may be getting myself into. Better yet, I’d be willing to entertain any discussions about space-sharing with friends/acquaintances in my town or other self-employeds in the Central Maryland area.**
This summer has taught me that working out of home. Just. Doesn’t. Work: (a) I need a workday routine to keep my momentum going on projects, which is hard to do without the structure of a commute and with the demands of family life at my workspace; (b) the home office space I have needs to be physically separate within the house, but cannot be and therefore is of only marginal use; and (c) no matter how well-intentioned or -considerate I try to be about spreading my stuff in other areas of the house or my family tries to be about leaving me alone, neither side succeeds often. The problem is less acute during the school year, but exists nonetheless with a slightly different flavor.
Part of it is that the kids are on summer vacation, and thus their base is now home, not school. I typically disappear to a coffee house or the library until lunchtime, come home to eat alone or with my family if they haven’t already left for the pool, and then work at home while everyone is at the pool. Obviously, this breaks down when they don’t go to the pool, or if I have important business conference calls that can’t be held under restaurant/library conditions & suspect wifi reliability. My son is also racking up volunteer “service” hours at our library, but his shifts are at odd times that make it difficult for my wife/daughter to stay at the pool, and so I end up getting him at the pool and working at the library until his shift is over, returning him to the pool and then going home to work a while longer. In short, every summer workday is different, my time gets cut up a million different ways, and my productivity is not what it needs to be…so I end up working a lot more at nights and on the weekends, which sucks.
Thursday I’m seeing a 200sf corner office in a nice building within easy driving/bicycling distance from home. The monthly cost is reasonable and includes utilities & wifi access. Quick self-employed basic info: a home office allows you to claim a portion of interest/insurance/taxes as a business expense, the trade-offs are lower itemized deductions and you have to account for the personal tax difference when you sell your house. Renting space is also a business expense, but is an additional cash flow, the plus side is that it simplifies my taxes and later home sale. So, I want to ensure that my office rent isn’t too high relative to what it ‘costs’ me now.
I’m beginning to think, though, that I may hold off on this move until next spring — the summer’s almost over, I’m going to be on vacation for a part of August anyway, and my business travel plans include at least one week in September, three weeks in October, and quite possibly two weeks in December, so I’d be paying rent for working conditions I don’t really need. As I said above, I would welcome hearing about people’s experiences.
** There’s an opportunity here for a real estate entrepreneur — start with the coworking concept more applicable to digital/creative types, but augment with space more conducive to self-employeds and to companies with field-based sales teams (medical supplies, pharmaceuticals, etc.). There are coworking spaces in DC and Baltimore, as well as a defunct group in Columbia, so along with growing numbers of people who may want an option somewhere between the office and telecommuting from home, there’s a market to be tapped.
Sorry if people have been looking for new posts from me…as the last one indicates, I have been unbelievably/wonderfully busy of late, a situation that’s not ending until the middle of next week. On to the topic du jour:
My productive work time is mostly at home, and I try to cluster meetings in DC whenever possible. I often will have an ‘anchor’ meeting and try to plan coffee, lunch, or other meetings around it. Because of the productivity/cost hit I take on days in DC, I generally don’t go in for just one meeting except for those that are particularly important/substantive.
This has not happened in a while, so no one should read anything into this: <rant> it kills me when people cancel meetings at the last minute, or even want to re-schedule at the last minute. I understand that things come up, but that understanding is sometimes one-way as people don’t quite get the commitment I made to having that meeting or the inflexibility of my schedule…I’m not like your colleague down the hall who could just as easily stop by later in the afternoon. The worst was one time last fall, when I had three meetings plus lunch with a friend. On the train ride into DC, I got a phone call cancelling one of the meetings. By the time I checked email since leaving home that morning, the other two had cancelled, both for times suggested by those people in the first place and one of them for absolutely discretionary reasons. That left me with just the friendly lunch. I enjoyed having lunch with my friend and former colleague, don’t get me wrong, but it would’ve been much better if I had gotten some work done.</rant>
So, advice for self-employeds — firm up your meeting commitments, but be prepared to have your time wasted for you periodically.
Advice for people meeting with self-employeds — understand the time/expense commitment we are making to meet with you, our schedules are a lot like people flying in from out of town, ie I’m away from my office, and so my time is not terribly flexible and everything comes at a cost. If something comes up, it would be great if you could say to people trying to grab a time set aside for a self-employed, “oh, I have a meeting at that time that I really can’t re-schedule, what other time works for you?”
That’s when I finished the draft of a report, itself an intermediate deliverable. The writing process on this one was not easy, in part because the meta-narrative I used wasn’t working as I had hoped, in part because I think I’m a little psyched out about the audience and potential prominence of the down-stream public presentation and final report.
I’m wiped out today, but I have four other projects that are active with current/upcoming deliverable deadlines. What’s the saying, Be careful what you wish for, you just might get it, well, I hustled to bring a lot of interesting business in the door.
I am pretty good with money management, something I learned quickly right out of undergrad when I was trying to live on my meager salary in Chicago. I also have solid experience in cost containment & budgeting from my management positions at the Chicago bank, as well as dealing with soft funds for large international research projects. Then I had the grad school years and beyond, followed by the tough transition to self-employment. I come by it naturally, too, for my Scandinavia-born grandfather thoroughly distrusted debt of any kind; when my mom was going through some of his things after his death, she found budgets dating to the Depression that detailed spending down to pipe cleaners.
I’ve always been reluctant to spend good money on new technology, not because I don’t like or appreciate technology, but because I like to wait until the it does something I really need it to do and the prices go down. Both are now happening for me with cell phones and on-the-go internet access.
Now that Skype is becoming available for iPhones and the like, I think it may soon be time to get a new cell phone/service. My current phone (see below) was old technology when I got it three years ago, though it still does what I need — make phone calls — and the lack of a camera means I don’t have to surrender it to enter some USG agencies. My wife and I each got a phone for free after rebate, and our total prepaid costs average about $15/month, replacing the roughly $80/month we used to spend. How’s that for cost containment! Another example, I used to rely on free wifi at places like Caribou Coffee and Cosi, but it didn’t always work and I found I was planning my day around when I could be in specific areas of DC. So, back in January I signed up for one year of TMobile wifi internet access for use with my laptop (not a broadband card), which allows me to tap into wifi at Starbucks, Borders, Barnes & Noble, Kinkos/FedEx, Union Station, and many airports around the world.
I think by late fall I’ll be able to bundle together a new/cool phone with internet access for me and my wife, for just slightly more than I’m spending now for both PLUS getting rid of our landline.
The discussion in DC over health care reform is of great personal and financial interest to me and my family. This is probably the best opportunity we as a nation have to change what is now a dysfunctional, anti-market, and anti-social system, and if we don’t do it this time around, it may be another 15 years before we try to deal with it again.
As an independent consultant, I have no access to employer-supplied health benefits. What you have to do in this situation is either (a) have a spouse with employment that provides group health insurance or (b) obtain individual health insurance. My wife works in the special ed unit at a nearby school, but it is a position that doesn’t come with benefits. Thus, we have individual health insurance.
Obtaining individual health insurance can be a difficult and confusing process — each state is different, the application and review take a long time, and it is incredibly expensive. You have to figure out what companies offer individual health insurance in your state, and which of the various programs fits your needs. Unlike group insurance through employers, you must apply for insurance and the company does not have to take you on as a customer. Finally, the monthly cost of individual insurance would stun most people if they knew.
In our case, a few years ago we had individual health insurance for a while that was decent and ran our family of four about $900/month. Staggering, no? The true annual cost for self-employeds, though, is less, as it is essentially a business expense, and thus the effective cost should be adjusted downward to reflect not having to pay FICA (15.3%, because we pay both sides of that) and whatever your tax bracket rate is…rule of thumb, reduce the cost 25-50% total. So, $900/month was really the equivalent of $450-675/month, but the $900 is cash out and the ‘savings’ comes from paying less in quarterly estimated taxes. Still pretty high, but the low end isn’t that far off many employer plans; I leave it to health care economists to determine whether individuals are partially subsidizing groups, which may account for some of the difference.
However, I made the mistake of taking a full-time position that came with benefits, and dropped my individual health insurance. Bad move, because when I moved back out to self-employment, I had to pick up my own insurance again. Our first application resulted in my wife and kids getting insurance, but I was denied because I hadn’t had ‘recent’-enough blood workup for my high cholesterol (no way to know in advance what ‘recent’-enough meant!). The fact that it was easily treatable with the lowest dosage of the most common medicine didn’t matter. I was without insurance for a few months, but I did eventually find an insurer for me.
To recap, I have a different insurer than the rest of my family. Also unlike employer-provided health benefits, we could be dropped at any time. With monthly premium increases this year of about 40%, we pay $1300/month in health care premiums. That amount is not only our second-largest monthly expense, it is almost as much as our mortgage. I’m not sure what the solution is, but it has to be something that allows for individuals to tap into pooled coverage with strict limits on rejection.
Well, it’s official, I finally got paid for a big chunk of work…that I pretty much finished about three months ago. A lot of people don’t realize the loo-ooonn-nngg timeline for consulting projects, you really have to be prepared for the delay between work and compensation.
When you work on consulting projects, the performance and payment relationships are very different than being an employee: there isn’t a regular paycheck, you don’t show up at an office every day, and you don’t have weekly/monthly/annual meetings with managers. Instead, your performance is monitored through your delivery of specific outputs or events, and typically you submit invoices for payment when the project is completed; if you’re really lucky, you can submit partial payment invoices along with mid-project deliverables. So, it is pretty easy to understand that this arrangement would entail some delay, but you also must realize that the length of the delay is highly dependent on the quality of the bureaucracy processing your contract and your invoice.
In the case of this big chunk of work, in between me and the client was the project ‘home’ of EliteDC University, so there was an intermediary with its own bureaucracy. The final contract between the client and EliteDC was signed almost three months after we began the work, because EliteDC objected to some absolutely standard consulting contract language that it was unfamiliar with, but backed down when push came to shove. “Not a good sign,” I thought to myself.
We finished the work and delivered the report on time in late January, at which point the client said we could go ahead and invoice them. After a week or so of trying to figure out whom we should talk to about this at EliteDC, we succeeded and…5 weeks later a simple invoice for payment was sent to the client. The client very nicely expedited processing and sent payment to EliteDC in two weeks…which paid me a month later, withholding far more in taxes than was necessary, thank you so damn much.
Yes, I just today got paid for work I finished almost three months ago, that I began eight months ago, that I first heard about almost a year ago. This sort of business development-to-payment timeline is not uncommon, the payment period was just particularly long in this case. They don’t tell you this stuff in Consultant School.
I have an office set aside at home. I actually do use it, but I don’t necessarily need one. I could just as easily work on the dining room table, my bed, a couch in the living room, on the screened-in porch when the weather is nice, and so on; what with wifi and laptops, all I really need to have are a couple of bookshelves and file cabinets, which could be anywhere in the house.
I have a home office, though, for tax reasons. Without a Dedicated Space of Sufficient Size, I can’t claim my travel down to DC, coffee/lunch expenses for meetings, or most of my business supplies. I don’t make a move in the direction of DC that isn’t business-related, so I want to be able to capture all relevant expenses. Thus, I have an office and use it, but I wouldn’t if I didn’t have to. It complicates my taxes, too, as an appropriate portion of my mortgage becomes a business expense, which I will have to account for whenever I sell my house. I work for myself, so unless I’m claiming rent for an office somewhere, my home should be the default workplace, case closed, end of story, period.
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