An IEEE-CNNNJ Member Panel Discussion by The IEEE Consultants’ Network of Northern NJ

1. An IEEE-CNNNJ Member Panel Discussion by The IEEE Consultants’ Network of Northern NJ January 26, 2006 with Getting Started In Consulting Don Borcherding - Process, Project and Resource Mgmt Jim Boyd - PIC Microcontroller-based Products Eric Holme - Power Generation Frank Middleton - Information Technology Laurence Nagel - Analog and RF Integrated Circuits

2. Don Borcherding NexSummit LLCProcess, Project and Resource Mgmt

3. NexSummit LLCThe First Year 01/26/06

4. About NexSummit LLC • Founded in November 2004 • Specializes in Reducing Development Time and Cost through • Strategic Planning and Resource Management • Innovation Planning and Risk Management • Project Planning and Management

5. What Went Right • Product Differentiation Well Defined • Initially • Process, Project and Resource Management & CMMI • Lots of competition • Not much Interest • Eventually • Strategic and Innovation Planning and Management • Very few competitors • Much more interest • Product Focus • Where to start process improvement • Culture rather than Maturity

6. What Went Right • Goal: 3 Clients in 2005 • Used ABC List • Broke Even in 3Q05 • Got paid within 30 days • Spoke at several meetings and conferences • Got better at asking questions and listening

7. What Went Right • Started getting my mailings through to prospects • Post Cards (No Call to Action) (25%) • Brochures (35%) • Puffy Letter with White Paper (50%) • Puffy Letter with Brochure and Flier (55%)

8. What Went Right • Developed a Monthly Flier • Use as a Fallback Strategy • Use to “Keep in Mind” • Hopefully useful at some point

9. What Went Right • Website • Invested in a website after… • I broke even • Presented nationally at the CMMI Conference • Redesigned it three times • Averaging 4 hits a day • 1-2 hits are legitimate • Others are most likely robots • Trying to punch-up the Home Page • Try to get visitors to stay longer

10. What Went Right • Built confidence • Letters and Brochures • Positive Feedback to Fliers • Positive Feedback to Website • CNNNJ Visits • Started feeling comfortable • Networking • Making Cold Calls • I can almost handle rejection

11. What didn’t go according to Plan • Opportunities are 50% smaller than expected • 4Q05 Client pushed out 1 quarter • Long time from verbal commitment to getting the contract • Not use to dealing with so many individuals • Need for accurate record keeping

12. What didn’t go according to Plan • Most of my contacts are still Engineers. Not decision makers • ABC List was used to screen accounts and target the Pitch • ABC was used to refine Product Focus methods (15 companies, 5 Industries)

13. What didn’t go according to Plan • New to NJ, 85% of my contacts are in Philadelphia • Difficult to get Clients in NJ • A lot of work cold calling • Initially could only make contact 12% of the time • Increased it to 35% • with Puffy Letter • Tracked Calling Times Closely • Leads/Information were limited • Unsure whether they were target accounts

14. What I am doing Different • Purchased a Lead List • Executive • Company Size • Organized by County • Participate in more organizations (IEEE, NJ SPIN, PMI, NJTC) • Post Cards with Call to Action • 0ne hour of free consultation • Continue Cold Call Campaign • Letter, Brochure, Phone Cold Calls • On-site Cold Calls when in the area • Set Higher Goal: 5 to 10 Clients in 2006

15. Summary • 2005 was the first time I felt I had real limitations: Sales and People • For once, I enjoy working for my boss.

16. Jim Boyd XL Research Inc.PIC Microcontroller-based Products

17. Jim Boyd, XL Research . . .quick profile Early career as “engineering generalist” with background in switching power supplies, analog and digital design and microcontrollers. Currently heavily associated with Microchip Technology and its PIC series microcontrollers. 27 years as a full-time electronics consultant Most work performed at XL offices on hourly basis “interesting” business twists: Bid fee charged for fixed fee proposals Almost all clients are on pre-paid retainer basis Charge 10% on Materials/expenses

18. Evolution of XL Research . . . Worked 4 “permanent” jobs in first 3 years after college. Quit the last 3 jobs in 18 months on ‘principle’ Consulted (moonlight) with former employer after leaving job #3 Met former consultants in job#4 who convinced me I could make it as a consultant despite being young First full-time consulting client obtained through a ‘jobshop’; negotiated a ‘buyout’ at 1 year renewal. Since 1979 have had only 1 major client acquired through jobshops. (It was really major though…) Early career focused on 1 full time client at a time, resulting in some long gaps between assignments. Last ~15 years, focus on 2 or more clients at a time. Smaller gaps.

19. and now for some “Pearls of Wisdom”... A man walked into a consultant's office and inquired about the rates for a study. "Well, we usually structure the project up front, and charge $1000.00 for three questions", replied the consultant. "Isn't that awfully steep?" asked the man. "Yes," the consultant replied, "and what was your third question?"

20. “Know before you go... “ If you were happy as an employee, you will probably be unhappy as a consultant and vice versa. Your SPOUSE’s (or SO’s) attitude toward consulting is critical to your long-term consulting experience. No matter how much money you make per hour, eventually you get used to it and other factors will dictate your happiness. Don’t switch just for $$$. Transitioning back to a “permanent” career can be very difficult after consulting for a few years. If you stay in consulting more than 10 years, you may have done ‘better’ in the corporate world if you don’t mind venturing into management.

21. What a new consultant SHOULD do... Notify your co-workers and friends about your new career path and contact info. Ask for referrals. Start a database of business contacts and leads. Join your local IEEE Consultants’ Network Develop and practice your business “pitch”, then get out there and USE IT. Besides the obvious – i.e. separate business phone, business cards, a company name, an email name, a company website . . . The not so obvious…

22. What a consultant SHOULDN’T do... Don’t sit back and wait for the phone to ring. Don’t let the client tell you what your services are worth. (But always listen…) Don’t accept assignments you are lacking skills for, UNLESS you make the client aware of it. Avoid derogatory comments about the work of others. Don’t waste money on legal review of every contract. Don’t overextend yourself buying equipment until it’s actually needed.

23. “Myths” About Consulting If things get slow, I can always go back to “permanent” work. In between contracts, I’ll finally have time to pursue my research and hobby interests. I will make MUCH more money as a consultant. I will be able to afford the best test equipment. I will finally escape the constant C.Y.A. paranoia that seems to cripple my workplace. Once I’m in business for a few years, I’ll have no problems getting bank loans for expansion. Once I’m in business for a few years, I’ll have a constant backlog of new assignments.

24. “Myths” About Clients Clients will promptly pay my invoice because they understand that I am an individual contributor. Clients who are happy with my work will refer me to others without being prompted by me. Clients who are happy with my work will send me repeat business without being prompted by me. Clients are willing to pay more for a “quality” design. Clients are willing to wait longer for a “quality” design. Clients are business-savvy and understand overhead. They know my rate is not just my salary. Clients who are friendly and personable during the initial meeting rarely turn into problem clients. With experience, problem clients can be spotted easily.

25. Client/Employee “Myths” About Consultants All consultants drive expensive cars. If things get tight, the consultants will be the first to go. Consultants make MUCH more money than employees. Consultants are basically unemployable -- they’re either eccentric over-achievers or unwanted under-achievers. Consultants identify errors and incompetence. They are the enemy of the employee and should not be helped. Consultants don’t care about the company’s long-term needs. Employees should be given the core design work and R&D; it’s an “investment” in our people. Consultants should be given the non-essential “grunt work”. Consultants are always on the phone with their brokers.

26. “Negotiating” Tips for Consulting Use a pre-printed Fee Schedule. Send the Fee Schedule with your Promotional material as early as possible in the inquiry cycle. Never negotiate your rate without getting something in return. Enter the negotiation process with a firm concept of your fee requirements. Be prepared to say “NO”. Never give the impression that you need the work, even if you desperately do.

27. “Profitability” Tips for Consulting Whenever possible, arrange two or more active clients to avoid work gaps. Consider switching to a Pre-Paid Retainer basis - Not getting paid for work completed is the biggest profitability drain in consulting. Never agree to an unpaid technical proposal - it’s the second biggest profitability drain in consulting. Add 10-15% charge on travel & material expenses. Set a Minimum Daily charge for client site work.

28. “The More Things Change, The More They Stay The Same . . .”French Proverb Fee chart originally prepared in 1994 by CNNNJ member, Werner Engelmeier

29. Eric HolmeM.E.S.A.Power Generation

30. Getting Started in Consulting Choosing a name for your business Business plan Work schedule The five P’s Office equipment Test equipment Liability insurance Office routine Eric Holme

31. Frank MiddletonApogee Communications Technologies, Inc., Information Technology

32. Apogee Communications Technologies, Inc. Frank Middleton, President and Sole Employee http://www.apogeect.com 973 796 2754

33. Apogee Communications Technologies, Inc. • Software Architecture • Software Development • Software Standards • Security • Communications • Specialties: • LAMP • Solaris • MDA, MDD • We don't do Windows

34. Why I Became a Consultant • Started in US as consultant • Predated IRS rules • Peers were all consultants • Management not rewarding • Tech lead roles • After IRS, had to incorporate

35. Getting Business • Alumni • CNNNJ • Head Hunters • Body Shops • Newsletter • WebSite • Publications

36. Benefits • Independence • Work from home • Tax advantages • Challenging • Every assignment is different • Not boring

37. Advice/Lessons Learned • Financial Planning • Stay Current • IEEE publications • ACM publications • Trade Press (CMP) • Information Week • SD Magazine • VAR Business • EE Times Save! Read them! Contribute!

38. Staying Current • ACM Self Education Courses • Develop products • XML Swiss Army Knife • MDA/MDD • Home Automation

39. Laurence NagelOmega Enterprises Analog and RF Integrated Circuits

40. Getting Started in Consulting Laurence W. Nagel Omega Enterprises Randolph, NJ

41. Outline • Deciding if consulting is for you • Startup preliminaries • Continuing concerns • Questions

42. My Background • Graduated from University of California, Berkeley in 1975 • Worked at Bell Laboratories for 20 years in the areas of Analog Integrated Circuit Simulation, Semiconductor Device Modeling, Analog Integrated Circuit Design • Worked at Anadigics for 3 years in the area of RF Circuit Simulation and GaAs device modeling • Started Omega Enterprises in 1998 to provide consulting services in the fields of Analog Integrated Circuit Design, Semiconductor Device Modeling, and serving as an expert witness in patent litigation cases

43. You get to be your own boss You have a flexible schedule that you can determine You never know what you’ll be working on tomorrow You don’t have to worry about being laid off in bad times You can choose which jobs you work on You have full control over the operation of your company You have a demanding boss Sometimes you work long hours and sometimes you don’t Your job is fairly hard to schedule You have to worry about going broke in bad times You can lose a client in the proverbial New York minute You have to keep books, send invoices, follow up on payments, and search for work Some Pros and Cons of Consulting

44. Is Consulting for You? • In what areas are you an expert? Your reputation is your biggest selling point in the consulting business. • Is your resume polished and convincing? Your resume is your strongest link to potential customers until you have established clients • Have you constructed an honest and realistic business plan? Expect to lose money the first two or three years. The plan should establish what rate you will be charging, • Do you have the resources to begin this adventure? • Are you ready for a hectic, unpredictable, and sometimes intense work schedule?

45. Startup Preliminaries - 1 • Locate an accountant and a lawyer for advice • Decide if you want to be a corporation, a partnership, or a sole proprietorship • Set up your accounting books from day one • Establish a budget from your business plan • Determine what rate you will charge, or what schedule of rates you will charge. This has to be consistent with your budget. • Open a bank account and obtain a credit card • Have stationary, envelopes, and business cards printed

46. Startup Preliminaries - 2 • Set up an office - FAX - Copier - Computer - Extra telephone line / Voice Mail - Web site

47. Startup Preliminaries - 3 • Get insurance - Business Liability Insurance - Professional Liability Insurance - Workmen’s Compensation Insurance - Medical Insurance

48. Startup Preliminaries - 4 • Advertise - Tell your friends that you’re available - Sign up with AICN (IEEE web site) - Join a local consulting network (like CNNNJ) - Send out one-pagers or postcards to companies where you have a connection - Realistically expect months before you land your first contract

49. You’re on your Way! • Knock yourself out on every assignment. If you succeed, your client will use you again and recommend you to others. If you don’t succeed ... • Don’t take on work that you aren’t comfortable with, no matter how hungry you are. On the job training is not part of consulting. Remember always that you’re supposed to be the expert. • Be careful to not overcommit. Taking on too much work ensures failure (see first bullet). • Respect confidentiality. Don’t blab about your jobs.

50. Continuing Concerns • Every job is an opportunity for another job. If your client is satisfied, he or she will use you again and will recommend you. • At the conclusion of each job, solicit feedback and ask your client if you can use them as a reference • Maintain an up-to-date client list that you can provide to potential clients • As in voting in Chicago, invoice early and often. Expect delays in getting paid.