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Discussion Starter · #1 · (Edited)
Currently, I provide a variety of marketing services, messaging development and project/product/brand management services to my employer, a software publisher, demo creator and web solutions provider. They are in the business of building PC performance benchmarking applications as well as creating future gaming technology demos for a big anonymous Finnish phone company, Intel, NVIDIA, etc. and finally building web services for folks like Microsoft, Alienware, Intel, EA.

The Finnish based company is private, and surfing the edge of profitability, and is open to seeing me continue to contribute, with the greater flexibility of a consultancy relationship. My local office consists of three people, including me. We're the only resource outside Finland, and the finnish VP sales/marketing is based here. I'd be providing him my services and he has a lot of respect for what I've provided so far, and wants to continue benefiting from my collaboration.

I've been approached by a local design firm to team up with them, and build similar marketing tools for their clients, and potentially grow a business developing viral marketing concepts for adventurous clients. The consulting gig would free up time, allowing me to participate with the design firm's projects while providing a reasonably stable source of income. Taking all that into account, I basically suck as an employee. If I'm not building shares or have a stake in the company's success, I take the building process half-heartedly. This would give me the freedom to build a business, interject some creativity, gain some independence, while putting a decent retainer in place. Most importantly, there's plenty of support for this at home.

So I'm at the cusp of hanging my shingle.

The CEO from Finland is flying out next week to meet with me so we can negotiate the relationship and fees. It's been a mighty long time since I provided services to a company, and even longer since doing it on a retainer basis. I need to put some thoughts together to propose building the relationship around and want to hear about red flags, concerns, pratfalls, etc...

Any advice or insights out here?
 

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Windrider (Stubborn)
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Coop.....

thinkcooper said:
Currently, I provide a variety of marketing services, messaging development and project/product/brand management services to my employer, a software publisher, demo creator and web solutions provider. They are in the business of building PC performance benchmarking applications as well as creating future gaming technology demos for a big anonymous Finnish phone company, Intel, NVIDIA, etc. and finally building web services for folks like Microsoft, Alienware, Intel, EA.

The Finnish based company is private, and surfing the edge of profitability, and is open to seeing me continue to contribute, with the greater flexibility of a consultancy relationship. My local office consists of three people, including me. We're the only resource outside Finland, and the finnish VP sales/marketing is based here. I'd be providing him my services and he has a lot of respect for what I've provided so far, and wants to continue benefiting from my collaboration.

I've been approached by a local design firm to team up with them, and build similar marketing tools for their clients, and potentially grow a business developing viral marketing concepts for adventurous clients. The consulting gig would free up time, allowing me to participate with the design firm's projects while providing a reasonably stable source of income. Taking all that into account, I basically suck as an employee. If I'm not building shares or have a stake in the company's success, I take the building process half-heartedly. This would give me the freedom to build a business, interject some creativity, gain some independence, while putting a decent retainer in place. Most importantly, there's plenty of support for this at home.

So I'm at the cusp of hanging my shingle.

The CEO from Finland is flying out next week to meet with me so we can negotiate the relationship and fees. It's been a mighty long time since I provided services to a company, and even longer since doing it on a retainer basis. I need to put some thoughts together to propose building the relationship around and want to hear about red flags, concerns, pratfalls, etc...

Any advice or insights out here?
I made this very transition.

I'm heading for a plane & will respond when I have more time.

Len
 

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thinkcooper said:
Any advice or insights out here?
wear the red leather thong and color the mohawk the same? :)


I know next to nothing about your specific situation, but from what you said it sounds like you gotta do it. Sounds like others might have some suggestions though. I made really good $$ when I consulted, but it was a good deal more stressful than being employed by a single firm. I hated taking vacations because I always was mentally calculating how much $$ I was losing. Then again--a retainer situation might take care of that.
 

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In need of sock puppet
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Discussion Starter · #4 ·
Bocephus Jones II said:
wear the red leather thong and color the mohawk the same? :)


I know next to nothing about your specific situation, but from what you said it sounds like you gotta do it. Sounds like others might have some suggestions though. I made really good $$ when I consulted, but it was a good deal more stressful than being employed by a single firm. I hated taking vacations because I always was mentally calculating how much $$ I was losing. Then again--a retainer situation might take care of that.
The mohawk will part of my schtick. Progressive old guy with mad skills, still hip with the young folks, I can do the macarena, that sorta thing...

I do better under stress. More engaged, oozing type A, sharper all around... I'm also good with vacationing, proven in practice over many years prior self-employment, but that's a reasonable consideration - the retainer should help smooth over the impact of being away.
 

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consulting suits you.

you seem like a free range rooster
 

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Based on the type of product they provide I would stress working in your contract significant compensation if they were to be acquired, particularly if you're providing product for MSFT. Language that gives you a bump in salary when an offer is made and then a lump sum once the deal closes is standard.
 

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Some issues, thoughts . . .

Since you have done the contractor thing before, the issues probably are already apparent. But, from my own perspective of having gone from being an employee of a large firm to a partner is a small firm, the largest negative issue is that of employee benefits. When you are an employee in a larger concern, things like health insurance, disability insurance, retirement, etc. are taken care of by the firm. When you are an independent contractor or a partner in a small firm, you have to provide all of these things for yourself.

The one thing that you should pin down with your employer/soon-to-be-client is exactly what they will allow you to do for others. In the legal world, we have fairly clear conflict of interest rules. But, I know from experience that some clients will not hire lawyers who do work for competitors even if there is no technical conflict of interest from a legal perspective. Also, I you need to have some understanding with your employer as to what intellectual property is yours and what is theirs.
 

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My experience as a consultant.

Lessons I've learned in the 5 years or so I've been a consultant (in no particular order):

1.) Form an LLC. I've seen business associats believe that since it was just them, that an LLC was unnecessary.....I disagree. Remember, you are dealing with organizations that, for the most part have deeper pockets than you do. If they believe that your work has cost them in some way (thru non-performance of not meeting their expectations), and they sue you to recover damages (I know it's the worst case scenario but.....) you want to make sure your personal assets and those of your family are protected. I've never needed the protection, but I'm glad I have it.

2.) Don't undervalue your services. I've seen so many people start with what they are making currently when pricing their "fees". They are also afraid of being told no. In addition, many times the opening question when dealing with a client is "What do you charge?"....this puts you in a position of "Negotiating against yourself", not a good position. I always start with what I think my services are actually worth & then adding an additional 20+% in answering this question (IN other words I over charge) and negotiate down from there. I've been constantly amazed at how many times they take my offer.

Remember, you have costs as a consultant that you don't have as an employee.......Higher payroll taxes (You are responsible for both employer & employee FICA & Medicare/Medicaid), vacation time (You can't bid when you're not working), benefits, retirement, office supplies, computers etc, etc.

You also have to decide How you will bill. By the hour, by the day, by the project etc. I parachute into troubled companies and "rescue" them. I've found the simplist billing is a daily rate, (With a minimum billing of Half a day if I work) plus expenses, plus a Monthly bonus contingent on goal attainment. I've never failed to get the bonus. You have to work out how you want to do this.

3.) Get the agreement in writing. Too many consultants don't so this and end up in a "he said, she said" at the end of the arrangement.

4.) Get written specific measurable objectives up front in writing. It's a pain, but it's alot easier than doing it on the back end.

5.) Know your key decision makers and what their buttons are. Stay in contact throughout the assignment. Remember, you are now an outsider. You will be the first one "thrown under the bus" if things start to go south.

6.) Focus on giving more value than they expect, no matter what they expect. I got into this thinking that I could work 10 months or so a year and take 2 months off (timing it to the end of an assignment). Making sure I did this has me in a position where I have more work than I can handle.

7.) Get disability insurance. You are your only source of income. You don't work, you don't get paid. Make sure you are covered in the event of an inability to work.

8.) Find a way to feed the "social" part of a work environment. The one thing that I didn't expect when I went into this is that I was no longer part of any team. For 25 years of work life, I had been part of a larger organization. As such I always had a sense of belonging to a team, a social construct. As a consultant, I am now a loner. I really don't belong anywhere. I go into a company and I've been "imposed" by the board and owners, No matter how much the organization gets to trust me, they know I will be leaving. By the same token, no matter how frequently I work for a Private Equity group I am still an Outside Consultant. You will need to find other ways to feel a sense of connection to a larger social group. The more you travel, the harder that is. I travel 5 days a week and believe me, it's hard. Don't undersetimate how lonely it can get.

9.) Manage your time between work and home. You work, you get paid. It can become consuming. Know that as much as you say that it will give you more flexibility to do other things, the work can take over.

Good luck and I hope this helps. If I think of anything else I'll post.

Len
 

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I heart team Zissou!
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Oh, and one more thing....

you might consider topping off your meeting w/ the Finn w/ a good sauna. This is established practice in Finland and seals the social side of the business trust relationship. I've finished many a meeting in Finland (pun intended!) in the wee hours of the morning in some overheated alder-lined Sauna ... followed by a cold, cooooolllllddd, dip in some godforsaken lake!

Oh, and one other thing, if a Finn ever whips out a bottle of aquavit (Finland is second only to Poland and Russia in business-sealing hard drinking), just remember that however well you think you might hold your drink, the Finn will invariably hold it better. Nurse that drink and make sure he takes two shots for every one of yours. Ignore this advice at your peril... and don't ask me how I know this....

A+

Philippe
 

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Oh, and one more thing... work a few trips to Helsinki into the deal. Finland is a great cycling destination in the summer and being on a bike gives you the necessary speed to outrun the goose-sized mosquitos which are the only downside to the nice riding!

A+

Philippe
 

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philippec said:
you might consider topping off your meeting w/ the Finn w/ a good sauna. This is established practice in Finland and seals the social side of the business trust relationship. I've finished many a meeting in Finland (pun intended!) in the wee hours of the morning in some overheated alder-lined Sauna ... followed by a cold, cooooolllllddd, dip in some godforsaken lake!

Oh, and one other thing, if a Finn ever whips out a bottle of aquavit (Finland is second only to Poland and Russia in business-sealing hard drinking), just remember that however well you think you might hold your drink, the Finn will invariably hold it better. Nurse that drink and make sure he takes two shots for every one of yours. Ignore this advice at your peril... and don't ask me how I know this....

A+

Philippe
saunas and booze? somehow I think Cooper can handle both of those. ;)
 

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yeah and just wait until Cooper introduces

those aquavit drinking Finns to the way he closes a business social deal. next thing ya know we have pix of some Finn CEO in full playa attire looped outy of his mind
 

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Discussion Starter · #13 · (Edited)
MarkS said:
a)...from my own perspective of having gone from being an employee of a large firm to a partner is a small firm, the largest negative issue is that of employee benefits...

b)...exactly what they will allow you to do for others / conflict of interest rules

c)...what intellectual property is yours and what is theirs.
Good feedback Mark.

a) We get excellent health care coverage from my wife's employer, a successful Santa Cruz vineyard. My current company just implemented a 401K program, and they provide no benefits at all here in the US. Their HR structure is dependant on state-supplied health services and mandated benefits in Finland, they know virtually nothing about US HR. So there will be little change when I engineer the shift.

b) I expect the only conflict of interest will be going after another benchmark developer or MSFT service supplier. I expect they WILL allow me to pitch project specific services to MSFT. Anything else I'm doing should outside their level of concern.

c) Good point. Luckily, all the materials I'd be preparing for them are very specifc to thier needs. Technical white papers on performance testing for instance. Or product specifc web/DVD/reviewer's guide content. Not much if any unique IP gets generated here. But I will want to protect concepts that grow out of working with them, such as developing a business model around creating and distributing entertaining video advertising to capable mobile devices.

...



Len J said:
Lessons I've learned in the 5 years or so I've been a consultant (in no particular order):

1.) Form an LLC.

2.) Don't undervalue your services...
Remember, you have costs as a consultant that you don't have as an employee...
...I've found the simplist billing is a daily rate, (With a minimum billing of Half a day if I work) plus expenses, plus a Monthly bonus contingent on goal attainment. I've never failed to get the bonus. You have to work out how you want to do this.

3.) Get the agreement in writing.

4.) Get written specific measurable objectives up front in writing.

5.) Know your key decision makers and what their buttons are.

6.) Focus on giving more value than they expect, no matter what they expect.

7.) Get disability insurance.

8.) Find a way to feed the "social" part of a work environment.
...The more you travel, the harder that is. I travel 5 days a week and believe me, it's hard. Don't undersetimate how lonely it can get.

9.) Manage your time between work and home.

Good luck and I hope this helps. If I think of anything else I'll post.

Len
Awesome, thought provoking stuff Len.

1) I'll be doing this. Having previously driven the set-up of a full California C Corp, with shares, a board and executives, articles of incorporation, etc..., an LLC will be a piece of cake.

2)I'm targetting setting-up a retainer basis, with additional projects on a separate fee schedule. The retainer would be roughly my current salary/12 months and cover a list of standard services. Attasched would be schedule that quotes out the fees for known, upcoming projects, with a limit to 3 revisions, and additional revisions would be billed per hour, with a four hour minimum. Terms would be 90 days notice to cancel the retainer, 2% discount for monthly payment within 15 days of billing. Hourly billing at $150.

Do those sound reasonable?

3) Absofrigginglutely!

4)That'll be part of the final agreement

5) I've learning what our VP of Sales and Marketing needs for the past year. Got it honed pretty well at this point. I've been able to take over PR development from another contractor that doesn't understand the intraciacies of our technology, and he's happy to share that piece of the business with me as well.

6) Under promise, over deliver. Words to live by. They suit Finnish sensibilities well.

7) Yeah, good point. Hadn't consdered that.

8) I used to travel 250,000 miles annually, more than many flight attendants...horrible stuff. It helped lead to the demise of my first marriage. Hopefully most of what I'll be doing now will be internet based, with some trade shows for marketing purposes. Client face to face as required.

The local design firm collaboration is very good. They are energetic oddballs like me, outside the box thinkers and want someone who can't even remember the box anymore. That's where I come in.

9) That's what it's all about.
 

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thinkcooper said:
Awesome, thought provoking stuff Len.

1) I'll be doing this. Having previously driven the set-up of a full California C Corp, with shares, a board and executives, articles of incorporation, etc..., an LLC will be a piece of cake.

2)I'm targetting setting-up a retainer basis, with additional projects on a separate fee schedule. The retainer would be roughly my current salary/12 months and cover a list of standard services. Attasched would be schedule that quotes out the fees for known, upcoming projects, with a limit to 3 revisions, and additional revisions would be billed per hour, with a four hour minimum. Terms would be 90 days notice to cancel the retainer, 2% discount for monthly payment within 15 days of billing. Hourly billing at $150.

Do those sound reasonable?

First inpression (admittidly,not knowing your business at all) is that the retainer is too low. If that's all you get, you'll make less (due to taxes). That being said, if you feel comfortable about getting more work it's OK.

You will probably have to commit a minimum number of hours against the retainer & have to justify.
3) Absofrigginglutely!

4)That'll be part of the final agreement

5) I've learning what our VP of Sales and Marketing needs for the past year. Got it honed pretty well at this point. I've been able to take over PR development from another contractor that doesn't understand the intraciacies of our technology, and he's happy to share that piece of the business with me as well.

6) Under promise, over deliver. Words to live by. They suit Finnish sensibilities well.

7) Yeah, good point. Hadn't consdered that.

8) I used to travel 250,000 miles annually, more than many flight attendants...horrible stuff. It helped lead to the demise of my first marriage. Hopefully most of what I'll be doing now will be internet based, with some trade shows for marketing purposes. Client face to face as required.

The local design firm collaboration is very good. They are energetic oddballs like me, outside the box thinkers and want someone who can't even remember the box anymore. That's where I come in.

Only thing I'm trying to point out is that you will need to fill the social Team void somehow. Don't knowyou so don;t know if it's a big deal, just pay attaention & you'll be OK
9) That's what it's all about.
Good Luck.

Len
 

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In need of sock puppet
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Discussion Starter · #15 ·
philippec said:
Oh, and one more thing... work a few trips to Helsinki into the deal. Finland is a great cycling destination in the summer and being on a bike gives you the necessary speed to outrun the goose-sized mosquitos which are the only downside to the nice riding!

A+

Philippe
My last trip to Finland (Helsinki and Espoo), was this time, last year. Yikes! Never knew that frozen nose hairs could get brittle and crack before. My candy-california-ass just couldn't deal with the sub-zero exteriors, contrasted with 75 degree F interior temps. I'd end up sleeping with the window open to let out the hot hotelroom air out, then end up freezing cold when the one-temp-fits-all heater would shut down.

Another trippy experience in Espoo? Pheasants walking around like they were pigeons in the park. I may end up there sometime during summer. If so, I want to do a midnight ride, without headlights. Watch the sunset, and sunrise.

As for drinking with the Finns, here's my favorite movie. Finnish May Day drinking festivities. Right click, Save as, and be warned - not pretty.

...

Bocephus Jones II said:
saunas and booze? somehow I think Cooper can handle both of those. ;)
Got that one down.

...


atpjunkie said:
those aquavit drinking Finns to the way he closes a business social deal. next thing ya know we have pix of some Finn CEO in full playa attire looped outy of his mind
When I applied for the job, the VP checked out my resume, which is pretty intense considering the position I was applying for, and then checked out my website, finding all the Burningman photos of me, with Mohawk, in chaps, getting re-married to my wife atop a flamethrower. He told me that was a plus.
 

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In need of sock puppet
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Discussion Starter · #16 ·
Len J said:
First inpression (admittidly,not knowing your business at all) is that the retainer is too low. If that's all you get, you'll make less (due to taxes). That being said, if you feel comfortable about getting more work it's OK.

You will probably have to commit a minimum number of hours against the retainer & have to justify.

Good Luck.

Len
What I need to do is start working on what basic services would be covered under retainer, and what would constitue an additional fee-based project.

My guesstimate is that only the routine day to day items would be covered under retainer, and that any out-of-the-ordinary project, which there are many, would be outside the retainer. I'd project that about 20 physical hours of time/week would comfortably cover all retainer based services. I'd expect to have to justify those hours in a summary each month, or perhaps even weekly.
 

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well if they are looking for a guy

who thinks outside the box I think you'd more than qualify. you give me hope for certain corporate structures
 

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speaking of esoteric bosses with cool

upstart 3-D co's, this was my old bosses baby. even though I was employed for the other company ( a design, photo studio, pre-press,LF printing house) I watched the dev of this 'pet projetc'.

http://www.pixels3d.com/
 

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Great list!

I own my own business and agree with each point you made. Number 9 is most important, though. I worked myself ragged at the expense of all other aspects of my life, and it damned near killed me. You don't have to be rich to be happy; provide for the necessities, one of which is quality of life. For me, there is no quality without my family, and I guard my time with them pretty jealously.
 
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