Re: Consultant Questions

Subject: Re: Consultant Questions
From: Andrew Plato <intrepid_es -at- yahoo -dot- com>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Tue, 16 Apr 2002 21:09:06 -0700 (PDT)


"Tamara Reyes-Muralles"

> Hi,
>
> Currently, I am working on a large project. By the time the project ends, I
> will have been the technical writer at my client site for two years. Right
now
> I am starting my plans for my own technical writing company. I have so many
> questions and research to do. Can you help me?
>
> I will be the only employee of my company. However, if I get a lot of calls
> for work, I will need to hire someone. I will probably need to send resumes
> to the client. I was thinking about putting an ad in the local paper asking
> technical writers to send me their resume for potential contract positions.
> Does this seem like a good plan?

Get some projects first. Finding people is easy. Contracting, paying, and
managing them is the hard part.

Keep in mind that owning your own company and hiring other people to do work
will more than likely double your work load and working hours while not
significantly increasing your pay.

Furthermore, employing people is not an easy task. It is expensive and
difficult. You will need to margin people's rates. That's a tricky thing to do
because some writers who don't understand how business works will give you hell
for making money off them.

Before you start a business and dream about owning a global technical
documentation empire, you might want to consider these hard learned lessons
I've picked up over the years:

- Technical writing is not a very profitable business. Its fine for a small
business with minimal overhead, but once you add any overhead, its toughs to
make a living.

- You will lose as much as 50% off the top on every person you hire. That means
you'll need to tack at least 50% on to everybody's rate. 25% covers your
expense and 25% for you. Hence, you want to pay somebody $30 an hour you'll
have to bill them at $60 or more.

- The paperwork for employing people is daunting. You must file tax deposits
each pay period. You must file quarterly tax returns for both the state and
federal. If you miss a report or are late, you are penalized. Penalties can run
into the thousands.

- You will need front cash to float employees. Clients generally do not pay
quickly. It will take you 30 to 45 days to collect from clients. If you plot it
all out, it can take as much as 60 days from the time you work to the time you
actually get paid. Employees are not going to be willing to wait 60 days in
order for you to get paid, thus you need upfront cash to float their payroll.
And if the client doesn't pay for any reason, you're in a world of sh*t.
Because now you're out the front cash and you have to spend more to recover
your money.

- You'll need to start managing people who are more than fellow writers, they
are your employees, which always sounds better when you're not doing it. I have
been managing writers for almost 7 years now. I have found that approximately 1
in 20 people are competent, capable, responsible, and honest. 12 of 20 are just
slugs who will do the absolute bare minimum amount of work to get paid. And
about 2 in 20 are liars, thieves, and con-artists who will rip you off, ruin
your reputation, and then turn around and blame you for their inadequacies.
People WILL take advantage of you if you let them. And with your name on the
company, if one of your employees does bad work, it can make you look bad as
well.

- Plan to lose money your first year or so in business. The expenses of running
a business are outlandish. This money will have to come from somewhere...that
somewhere is your pocket.

You have to REALLY want to own your own business. Because when it comes to
money, owning a business is not always the most profitable thing to do.

But, you do get to walk around and bark at people: Get back to work, you! I'm
not paying you to fondle fonts.

Andrew Plato



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