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10 Steps to Starting Your Remote Software Consultancy

There has never been a better time to start a remote software consulting business. COVID-19 is driving many companies to embrace remote work culture in a way we’ve never seen. This means you can work from anywhere, freeing you to live a lifestyle that doesn’t involve commuting, sitting in an office all day, or dealing with the politics and other stressors that usually accompany working onsite everyday.

In this article, you’ll be given a blueprint for starting your own remote software consulting business, based on my own ten years of experience.

1. Create an LLC

The first step in starting a remote software consultancy is to understand the difference between W2 and “corp-to-corp" (C2C) arrangements. In all likelihood, you’ve been working on a W2 basis for most of your life. You get paid weekly or bi-weekly, with taxes and other benefits withheld. In order to start a remote consultancy, you’ll need to create an LLC so that you can start doing C2C deals. In general, you can get a higher hourly rate on C2C, and your cash flow will be better since your payments are pre-tax (you are responsible for paying your own taxes, so your payments are for the full amount earned). C2C also gives you many tax advantages, which we’ll get to shortly. The easiest way to create an LLC is LegalZoom. You could do this yourself by filing the appropriate form with your Secretary of State, but LegalZoom takes all of the leg work out of it, and they will obtain your EIN for you as well, which is like an SSN for your business and is required to set up a bank account for your new business.

2. Create a Website

The next step is to create a website for your newly formed business. I usually use WordPress, which powers almost 25% of all websites on the web and has many thousands of plugins that will help you customize your site. Instead of spending days or weeks building a custom website or theme, just visit one of the many theme sites out there (e.g., Themeforest.net or TemplateMonster.com) and search for a WordPress template. A good search phrase is “portfolio site". Templates usually cost $10-50 and will give you a very professional look without spending a ton of money on design.

If you don’t have a logo, run a contest on 48hourslogo.com before buying a template. You can set a prize of $100-125 and you will get dozens of submissions from artists all around the world. This approach is much better than working with a single designer or creating your own logo if you don’t have logo design skills. Once you have a logo (and color palette), pick a theme from one of the sites above. You can use Godaddy to automatically setup WordPress for you in a matter of minutes. Then just install your theme, drop your logo in, customize the colors and style of the theme, and write content for your site. Creating a website for your business shouldn’t take you more than a few days, but it is critical to presenting yourself in a professional way and building credibility. Checkout www.deeprapid.com to see my own remote consulting website.

3. Identify Your Top Skills

One of the most important things you’ll need to do to start a successful software consultancy is take an honest assessment of your skills. You’ll also need to gain a better understanding of what skills are in highest demand and, if necessary, spend some time learning them. Most of my own experience is with building web applications, so my own consultancy is based on fullstack Javascript engineering and everything involved in deploying Javascript applications. Javascript, React, React Native, Angular, Node.js, and Serverless are the main skills I promote my consultancy around.  

Another important skillset is WordPress. My wife does a lot of frontend Javascript development in React and an equal amount of web development in WordPress. As I mentioned above, WordPress powers almost 25% of all websites on the web, so learning WordPress won’t hurt. There are many other engineering skillsets that are in high demand, so just make sure you “know thyself", know the space and the skills that are in highest demand, and never stop learning. Staying on top is just as hard as getting on top as a software engineer. It requires constant research and education.

4. Optimize Your Resume

Once you’ve done an honest inventory of your skills,  you’ll need to optimize your resume around those skills. This is probably the step that will have the most impact on your success, and the one people neglect the most. Your resume is the main piece of marketing material you’ll use to attract work. You really don’t need much else, if your resume is written and structured the right way.

Tip 1 – REO: In order for your resume to attract the attention of recruiters, you’ll need to optimize it for certain keywords that describe your skill sets. I like to call this “resume engine optimization” (REO), because in many ways it resembles “search engine optimization (SEO). The skills that you have expertise in should appear multiple times in your resume. This will ensure that your resume appears at the top of results when recruiters search for engineers like you on the resume boards. Keyword optimization isn’t the only trick, however.

Tip 2 – Avoid a Chronological Format: Move away from a strictly chronological resume that simply lists the companies you have worked for. Lead with a section called “Technical Skills” that outlines the major skill sets you have, followed by a “Work History" section with the normal chronology. This format is a hybrid between the “functional" format and the “chronological" format and will help non-technical people (e.g., recruiters) quickly assess your skills and figure out if they match their job requirement.

Tip 3 – Update Your Resume Regularly: Upload your resume to Monster, Dice, and (you guessed it) Knack for Engineers. Make sure to log in to each of these boards every few weeks and make some sort of minor update to your resume (even if it’s just turning visibility off and then back on). This will update the timestamp on your profile and make it appear as if you are still actively looking. This is important since many recruiters won’t reach out unless your profile has been recently updated.

5. Attracting Projects

The next step is to start attracting work. The most important thing to know about running a successful remote consulting business is that you shouldn’t be looking for opportunities. The opportunities should flow into your inbox daily. Most of those opportunities will come from recruiters who already have relationships with the best employers, so get yourself comfortable with working with recruiters.

The easiest way to attract opportunities is to post your resume to Monster, Dice, and other more specialized apps like Knack for Engineers that focus on engineering. You don’t need to post to every board under the sun. The three above are more than enough to get the recruiters chasing, as long as your resume is keyword optimized, well-structured, and well-written. Make sure to put “REMOTE ONLY” very large at the top of your resume as well as in the job title you post for the resume. That won’t prevent recruiters from reaching out about onsite opportunities, but it will stem the flow a bit. I usually set up email filters in Gmail that automatically filter out any emails coming in, for example, that contain “developer” or “engineer” but that don’t contain “remote” and move them into a folder for later review. This leaves only the remote opportunities in my inbox.

6. Working with Recruiters

As the leads start flowing in, get used to the song and dance that happens during the recruiting process. Reply back to emails with a simple message:

My resume is attached. I have a couple questions:

    1. Can you do C2C?
    2. What is the rate?
    3. How long will I have to wait for my first payment?

I look forward to hearing back.

One of the drawbacks of C2C work is that recruiting firms usually try to do “net 30” terms, which means you’ll be waiting a damn long time to get paid for the first time. This is usually negotiable, so don’t hesitate to push back hard on rate and on payment terms. Remember that C2C deals are less complicated for recruiting firms since they don’t have to withhold and/or pay taxes for you, so they are usually very open to working with you. Once a recruiter gets back to you with the answers above, you’ll usually have to sign a “right to represent” (RTR) and do a couple rounds of interviews before getting an offer. Stick to your “remote only” requirement, no matter how hard they try to push you to go onsite.

The freedom and flexibility the remote workstyle gives you will allow you to spend more time with family and doing the things you love. It will also give you the ability to work a second part-time remote job if you want, and the total time commitment will probably still be less than you’d normally spend working onsite, with all the commuting and other in-office nonsense.

7. Picking the Right Projects

A large part of building a successful remote consultancy is picking the right projects. Over time, your income and your effectiveness in attracting work will depend on choosing projects and companies to work with that will build your skills and credibility.

Some of the opportunities that come to you will be for startups, some for large enterprise companies, and everything in between. Just remember that startups will usually push you very hard to hit tight deadlines. Their pockets aren’t as deep, so you will be expected to accomplish a lot for every dollar you are paid. That said, you may also gain valuable skills working with cutting-edge tools and frameworks, so you should definitely remain open to working for startups from time to time, as long as they are heavily-funded and/or revenue-generating. You should also try to add some big names to your resume as well, however —  e.g., Apple, Google, Cisco, Deloitte, and other large companies that everyone knows and trusts. These big names will go a long way in building your credibility and helping you land future deals, even if the projects are short term. The bigger companies usually also pay more, and will respect boundaries — your evenings and weekends will be yours to spend with family or for pursuing learning and personal projects and hobbies.

Aside from picking the right companies, you should also pick the right projects in terms of the skills you’ll learn while performing your job. It is never enough to take on a project just for the money. Harold Geneen, longtime CEO of ITT, once said: “Life pays in two currencies: cash and experience. Take the experience first. The cash will come later." You need to make sure the EVERY project you take on pushes you into new skills or expands and strengthens existing ones. You should never take a project solely for the pay, unless your survival depends on it. Taking jobs that pay well but involve old tech tools and stacks is the quickest way to achieve obsolescence within a few years and wind up in a situation where you forced back into W2/onsite work or, even worse, unemployed altogether.

8. The Golden Rule: Always Have Two Incomes

While you’re in the office, you are unable to juggle other projects that can bring additional income, and because those types of jobs put a lot of pressure on you to achieve as much as possible in an 8-9 hour window, you often feel drained by the time you get home without much energy to work on other things. The most important take away from this article is what I like to call the Golden Rule: Always Have Two Incomes. A lot of employers and staffing firms will think of this as blasphemy, but it’s the most important rule in building a remote consultancy and a life of financial freedom and stability. 

None of us ever know when our time will come with our employer. Every year, companies are learning how to get more work done with less people. The days of working for the same company your entire life and retiring with a fat pension have been gone for decades. To ensure that you are NEVER without income between jobs, you should strongly consider always having one full-time contract and one part-time contract. This will ensure that there is never a total interruption in income when one of these falls out from under you, which is bound to happen time and again throughout your career. It will also help you save money towards retirement or whatever other goals you have as long as you keep your spending under control so that your full-time contract can cover your living expenses.

9. Use Your Spare Time Wisely

Another wise saying that has stuck with me since my teenage years is: “The only difference between the rich and the poor is what they do with their spare time." As a remote engineering consultant, you will have a lot of spare time on your hands. Where you wind up 10 or 20 years from now will depend on what you do with it.  My strongest suggestion is that you start thinking very hard about creating a software product of your own that you can eventually build into a business. Don’t get too emotionally attached to any one idea, and don’t be afraid to abandon something you’ve worked on for awhile to start something new.

The greatest benefit of working on your own startup project on the side is that you can pick what language, framework, and other tech tools to use. It will give you hands-on experience with tools and technologies that your current job(s) might not be giving you exposure to. It will also allow you to develop a BROADER base of skills since you will be forced to think and learn about all aspects of software product development, including UI/UX, frontend development, backend development, devops, and infrastructure. Being a startup entrepreneur means you won’t have the funds to hire a team to which you can delegate all of these various responsibilities. You’ll have to partner with one or two people, wear a lot of hats, and learn a ton of things.

The breadth of knowledge you develop will help drive up your income as a consultant, and if you’re lucky and persistent, that knowledge may also lead to a successful business venture that propels you to even higher levels of financial success and personal achievement. You’ll learn more by tinkering with your own startup projects on the side that you could ever learn by participating in a formal education program. 

10. Your Books & Other Business Stuff

You’ll need to find a decent bookkeeper to help you keep your books clean. That’s usually as simple as setting up an online Quickbooks account, linking it to your bank account, and then paying a “remote bookkeeper” $50-100/month to keep things up-to-date. For managing your own payroll and medical insurance, I recommend setting up an ADP account. ADP will help you with all of that, and can even help you set up an IRA if you’d like to contribute a percentage of your income into a retirement account.

You may also need business insurance for some bigger clients. A $500,000 – $1,000,000 policy is as cheap as $1,000 per year and can be paid monthly. You can also get that through ADP. No need to get the business liability insurance until you land a deal that requires it. Lastly, your LLC will require an annual filing with the Secretary of State. You can do that yourself or LegalZoom can do it for you for a small fee.

Running a remote software consultancy will give you more freedom and financial security than you can possibly imagine. You will earn more (in terms of hourly rate and because you can work more than one project at a time). You’ll never be at the mercy of an employer in order to keep medical coverage, and you will also increase your cash flow while reducing your taxes.

Most importantly, you’ll just love your new lifestyle! Feel free to reach out to me if you need any additional advice.

About the Author
Leroy Ware is a technology entrepreneur, software engineer, and AI researcher with Silicon Valley DNA. He has worked for some of the most well-known organizations in the world, including HP, Apple, Cisco, PayPal, Mozilla, Deloitte, and the U.S. government. He is a prolific coder with extensive experience building applications that work at scale. He is also one of the co-founders of Knack.

To learn more about the Knack ATS, visit http://www.knack.io.

For more information about Knack for Engineers, visit http://www.knackforengineers.com.

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