>There was an epic piclist thread two or three years ago that you may be
>interested in...check out:
>http://www.piclist.com/techref/consulting.htm

Aaron, thanks for the link, I'll have a read.


On 10/6/06, M. Adam Davis <stienman@gmail.com> wrote:
> > How long does a (small, medium, large) project usually take and what
> > is the final cost of the project?
>
> That depends greatly.  On a previous project where we had settled on a
> design spec and a set consulting fee (rather than time and materials)
> I spent 50 hours on the initial design and prototype over 6 months.
> The client determined that changes needed to be made and we
> subsequantly entered into a time and materials charge basis where I
> spent another 60 or so hours on two more runs of prototypes.  This was
> over the course of another 3 months.  He then sent it to Asia, had it
> re-factored and improved (cost and accuracy) and it should be on the
> market in a month or three.  Now he's asked me to work on another
> design for him.  In all cases the client also paid for development
> items directly related to this project - dev kits, PCBs, etc.  This
> does not come out of my labor charge.  I believe he spent about $5,000
> total on materials for 3 prototype runs, which involved a total of
> about 60 units.  In contract mode I charged 1/2 the labor up front
> with the remainder delivered at the end.  I billed for materials at
> various milestones.  In time and materials mode I billed at various
> milestones (I didn't require up-front payment or deposits - by that
> time we had built a good relationship).
>
> Yet another project I'm working on now is expected to take about 500
> hours over the next 9 months - and that's an optomistic schedule for
> this rather complex project.  In this case it's for a startup and I've
> accepted a contract which pays a fixed monthly sum, with the remainder
> of the normal consulting rate paid in full at the delivery of the
> prototypes.  It may not work out, but the experience (and enjoyment)
> plus the fixed sum is enough if something goes wrong later.
>

These both seem like large projects to me, but all the PIC projects
I've made have been rather small, few day things.

> I'm not sure what you mean by "What's the final cost of the project."
> Do you mean the consulting profit (after expenses), or the consulting
> charges (which you can figure out given my rate and the time spent per
> project), or the materials (which is seperate)?
>

All three would be nice to know. Or perhaps a percentage breakdown,
like the consulting charge is $X * Y hours = $XY. Profit is 50% of
that, materials is $Z (or 10% of total or however it's done).


> > How much can one expect to make annually?
>
> What "one" can expect annually depends greatly upon the experience,
> business ability, and simple determination of that "one."  I didn't
> start out a good business person, and I'm sure I still have a lot I
> could be doing better.  I learned a lot of what I know about business
> and project management at the hands of failure.  It's one of the main
> reasons I'm working at a "regular" job rather than consulting - I
> simply don't enjoy spending 50% or more of my time managing the
> business of business.  I can't say I dislike it, but it's not as much
> fun as design work.  Suffice to say I now do much better on the
> business end, and perhaps I'll turn to consulting more fully later,
> but only after I get my house built (banks don't like to give
> mortgages to consultants who don't ahve a year or three of proven
> income performance).
>

I definitely don't have the business skills to start my own business.
I don't want to start my own business at first however. I'd like to
work for a small company though, anybody on the east coast (Boston,
Massachusetts) hiring?
I want to gain more experience, but a lot of employers want 5+ years
experience. What are some ways a new college grad can go about
acquiring that experience?


> One of the major advantages of working in a regular company for awhile
> first is gaining some experience with how the industry works, and
> getting contacts you can use for later opportunities.  One of the
> major disadvantages is that you learn how the industry works, and you
> tend to continue doing things the same way especially when you don't
> understand the years of experience that led people to do things in a
> particular way.  I know that I wouldn't feel comfortable accepting
> this recent big project without understanding how the typical
> manufacturing shop works (what they expect of engineers, and what they
> supply in terms of information, feedback, and assistance), how to deal
> with suppliers, distributors, FAEs, and manufacturers (their
> differences, what they need, what they do, when to involve them), and
> moving to contract manfacturers and for volume cost reductions how to
> use off-shore manufacturers, and their particular strengths and
> weaknesses.  You can learn this as you go, but expect to spent a huge
> portion of time talking to people and finding out how things work.
> You can do things differently, but it goes faster if you do it the way
> they expect it to be done.
>
> Oh, and project management and planning (scheduling estimates).  This
> you've got to learn.  All I can say here is "good luck!"
>

I'm currently taking a software engineering course which is all about
the planning of projects. We learn different process models,
requirements specifications, etc.
My school (Illinois Institute of Technology) also requires
undergraduates take two IPROs (Interprofessional Projects) where a
group of 5-15 students from various majors get together for a semester
and work on a project, usually sponsered by a local company or
professor.


> Decide what you need to make, and then find out what it'll take to
> meet that goal.  Keep in mind that you'll need to earn quite a bit
> more as a consultant than you would ask for as a sallary.  You have to
> cover health, savings, heat, light, electricity, computer equipment,
> development tools and software, etc yourself.
>
> The average annual salary for new computer engineering students from
> the University of Michigan this last year was just over $60k/year.
> You'll need to make nearly double that to match their salary and
> benefits.  Many consultants trade off company benefits for the
> flexibility (and lower overhaed) of consulting.  Since half of your
> time will be spent doing non-billable work (business management,
> advertising, chasing down leads, writing proposals and estimates, etc)
> then you'll need to bill twice as high as you might otherwise think.
>

I just got a magazine for graduating engineers, and in it were some
good websites to look into starting salaries for various engineering
professions. I need to take a look at that. $60k seems like a pretty
typical number for new computer and electrical engineers.


> I believe the $60/hr for what I do is very inexpensive - I haven't met
> a consultant yet that charges less.  But I don't have to make a living
> off it - chances are good you'll have to charge more.  Given that you
> don't have a lot of experience, you'll have to sell yourself very
> well.
>
> > I don't mean to invade anyone's privacy, I know this is a touchy
> > issue. I don't expect you to give me how much you make, but I would
> > like a range of values and/or some typical numbers.
>
> I don't believe it hurts me to share this information.  I doubt it
> substantially hurts others (perhaps only when you get a "price shopper
> client" that says, "This guy only charges $60/hr!  Why do you charge
> $180/hr?" and usually one doesn't want that kind of customer
> anyway...)  At worst my advise will send you (and other future
> consultants) on the wrong path since my situation is different than
> yours.  At best I'll get a few people commenting on my comments and I
> can improve, or at least more thoroughly examine why I do things a
> particular way.  But I'm not up on my business theory/strategy, and
> perhaps there's a particular advantage one gains to keeping this
> secret.  Certainly in the US there's huge cultural training that tells
> people not to share their salary information with others.
>
> I hope you find this helpful.
>


Thank you very much, Adam.
Extraordinarily helpful.


-Scott
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