The Problem With the Best Business Model (4.50 / 6) (#7)
by kostya on Fri Sep 07, 2001 at 03:14:34 PM EST
It seems like the best business model is still to be a consultancy, and advocate your "solutions" in addition to others like Oracle.
It would seem, but it isn't. Why? It's deceptively simple: because it is consulting work.
Let me say this very clearly: consulting is for total chumps.
Ok, for all of you who are consultants, let me first say I was one for two years. So I know a little bit about the consulting (at least IT/Software) business. With that done, why does this business model suck?
Due to the above reasons, working for a consulting company will always suck. Sure, you'll try to find reasons to believe, people to trust, leaders to hope in, but you will always be disappointed and end up at the same conclusion in the end.
- The work is incredibly stressful.
Consulting work is almost always done poorly. This is because you are being grafted on to a company that is used to working with its own. They don't know how to handle you. Or your work.
So you are usually brought in late with little consensus and expected to work wonders that just aren't possible. But why do they expect you to work wonders?
- Your sales people are rank liars.
Your sales people lie. Your competitors' salespeople lie. If you are jealous of your competitor, it is because their sales people lie and spin better than yours. But that bugs you because you hate that sales people lie, lie, lie, but if yours could just lie better, you'd have better work and a more successful company.
Here's the problem: truth doesn't sell. At least not successfully. And you need business--lots of it--to stay on top as a consulting firm (Great Bridge had 40 some, that's quite a few people). So even if you are damn good at your job, your salespeople are going to have to lie somehow to get you hired--because everyone is doing it. Especially if you are a small firm. So you get hired because the client believes you can get it done in 3 months when you know full well it will take 6. This reality check leads to #1.
Sobering truth: if your sales people don't lie, they have to sell you cheap. So if they do tell the truth, they have to sacrifice on price. So now the company doesn't make nearly as much money off of your daily sweat, but you are happy. Guess what? Sales people are usually paid on commission. So do you think they will choose to tell the truth and charge less or lie a little about time and talent to secure higher earnings? Especially when you are conscientious schmuck and always meet your deadlines because it is about "professional pride" and "taking one for the team"?
- You get paid squat.
Consider that your consulting firm will hire you at around $800 to $1000 a day. That's around $100 to $125 a day. How much do you get paid? Probably $60k/year if your lucky. How much is $60k really when you include benefits? About $35/hour if you are lucky.
It just takes one grumpy day for you to realize this as a consultant. They are billing you out at least at 3 probably 4 times what you get paid in the end. Add to that the certain fact that your manager makes at least $20k more than you, and the CEO probably twice what you make. And what do they do? Yeah, it makes you grumpy fast.
And on top of that, you don't work 40 hours, do you? No, due to #1 and #2, you easily work 50 to 60 hours regularly. Guess what, that means you are making even less per hour. And what do you get? Stock options if you are lucky--funny bits of paper that might be worth something some day. But not right now they aren't.
Why do I work here? Why not go out on my own? It can't suck any worse than this. And guess what--it doesn't.
My advice: find a solid full-time company or go become a contractor. Either one is better than being a slave to a consulting company, the company that claims over and over agian that it isn't a "contractor whorehouse" but is--except they don't pay as well.
Veritas otium parit. --Terence
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