To Consult or Not Consult
To consult or not to consult – That is the question.
My inaugural blog is an opening statement of future topics. Occasional straying to discuss important events or topics is inevitable with the main thread weaving through an anchoring topic with a nod to current affairs and issues.
The main topic will be opportunities in Wyoming. As background, I grew up on a small ranch in Wyoming. Left the Cowboy State for higher education and professional experience only to return 28 years later to take care of my parents. I am celebrating a decade as a returning resident. One of my goals has been to bring biotech and pharmaceutical companies to Wyoming. Mainly because of the unique opportunities for biotechnology and pharmaceuticals as well as has the dire need to diversify the economy of Wyoming – add a fourth leg to create an economic table from the three-legged milking stool of extractive resources, agriculture and tourism.
Since the beginning of 2016 several large pharmaceutical companies have announced layoffs and many other small ones have closed their doors. A continuing trend with roots many years in the past. Sure companies and start-ups continue to hire but new positions target the pool of fresh graduates having new skills, less experience and lower direct cost of employment. Layoffs ripple through the Life Science community like a rock thrown into a pond of still water.
During these times of industrial slow down, re-alignment and re-structuring, I regularly receive inquiries from friends, former colleagues and acquaintances searching for work and or announcing their decision to become a consultant. Further, since I have spent the majority of the last fifteen years as a life science consultant, with periods of recapture as a company employee, it is common for the newbie consultants to seek consulting knowledge.
Distilled, the question and discussion is -- “To consult or not to consult.”
I agree being a self-employed Life Science consultant has drawn many like a bug to a blue bug light. Yes, you are your own boss (theoretically), set your own calendar and can be selective about clients as well as projects. Moreover, you can set your billable rate to a level based on your rationale and justification of the value of your time. When traveling you select the times, methods, accommodations and restaurants for meals -- seemingly a dream job and seemingly you have found the golden goose that lays those large, gold-filled golden eggs.
Now comes the zap from that bug light.
First, many individuals have this very same thought and are hustling to land that first project. Some have the inside track because of preexisting relationships or superior knowledge, skills and experience. Others have more aggressive pricing, or better marketing, superior closing skills or a combination of all of the above – specifically, a better business development process. Second, invoice payment is according to contract or agreement and processing time of the company. Company processing time can range from 30 to 120 days. Between invoicing and payment, you are functioning as a bank for the client. Carrying your expenses for the project as well as waiting on payment for your time and effort. In short, funds come in lumps at irregular intervals. Third, one needs to sequester profits from each payment for taxes, overhead, travel and unexpected costs – literally paying it forward. Independent consulting is a cost intensive endeavor, within overhead exists the black holes of legal fees (review of contracts, non-disclosures, confidentiality statements, etc.), insurance (business, contract, omission and errors, etc.), office expenses (phones, faxes, computers, paper, ink, rent, utilities, etc.) and, if you do not like filing or book keeping, staffing (filing, bookkeeping, office maintenance and management). Fourth, you are not your own boss. Relationships with clients and potential clients depends on many factors including availability. Yes, you can terminate the relationship and/or agreement with a client if they are grossly difficult, but that is a very drastic action.
Additionally, the combination of the expenses, irregular payment, travel and time spent working can cause significant stress on family relationships. Families are in need of security, consistence and parents’ availability. Working as an independent consultant can erode all three underpinnings of a successful family.
For a consultant, Wyoming offers many advantages. First, Wyoming does not have a personal income tax and corporate income taxes are low. Second, the cost of living in Wyoming is, on average, 13% less expensive than the remainder of the nation. Third, Wyoming is the least population-dense state in the nation and the cities are relatively small, providing short travel times to run errands or watch the children’s activities. The public schools are some of the best in the nation and, largely, the cities are safe and family friendly. Moreover, outdoor activities and events are frequently within a few miles of home.
My choice is Wyoming.