Consultant Brokers

If you are a consultant you probably have a plan how to sell your services. You might have your previous employers, some contacts through your friends or you might have sought out assignments from the Consultant Brokers. 

Consultant Brokers can be a great asset for you especially if you don't have the contacts or don't like selling yourself too much. Usually they just need your CV to get started and if your skills match any of their open assignments, they give you a call about it. If you like what they tell you about the assignment and brief you for the interview. If the interview works out great, you'll sign a frame agreement with the Broker and they'll deal with the rest and hopefully you will be at the customer in just a few days.

If you have something specific questions about the Consultant Brokers, let me know.

You might or might not know that most of the consulting contracts which you get through Consultant Brokers go through a contract chain which can be very, very long. Your Broker might have gotten their assignment from a small company which has an assignment from a major integrator which has an assignment from a major S&P company.

Despite of the ease of using Consultant Brokers, using them usually means more bureaucracy, longer pay time and less pay. At first you might be more concerned about the pay because everyone in the food chain will go after their own share, but in my opinion the other two can cause you more problems.

Longer Pay Time

As I mentioned earlier on these blogs, cash flow problems are responsible for causing over 70% of businesses to fail within their first year. In consulting business the expenses are usually low, so the cash flow problems are not as likely than on other fields, but might occur with green, blossoming entrepreneurs who don't have extra money stashed somewhere.

Depending on the contract, the pay time might multiply in the food chain. You might notice that you have to wait over 90 days before you get your money. Even if you wouldn't have made big commitments towards insurance companies, accountants and other companies, you might notice at some point that you cannot make many investments before the first money arrives. Just be aware of this and you'll be fine.

More Bureaucracy

The bureaucracy has nothing to do with you, the contractor, but everything to do with the food chain. Remember that if you say after the interview a "yes" to an assignment, you are at least morally bound to honor your word. Then the problems may arise...

I had a three level food chain on my first contract and everything was going fine. The Consultant Broker liked me, the customer liked me and the integrator wanted to get me to the customer ASAP. Then the customer decided that they wanted me to work in a different city and that lead to negotiations with the integrator about covering the extra expenses. Those negotiations went fine and all I had to do was to have a few phone calls with the Broker. Then the customer and the integrator started having some questions about the handover period and who is going to pay for it...

From the integrator perspective it is easy to understand that for as long as they have consultants at the customer, they want to receive the money from all of them. From the customer perspective it is easy to understand that they bought a resource from the integrator to do the work, but during the handover period there are at least two consultants in the house who don't get the work done. In the end I signed the contract about one month later and started the project without a proper handover period.

What I am saying here is that the Consultant Brokers can be useful resources for entrepreneurs, but using them adds some risks for the consultant which are out of their control. Be aware of these risks and try to use the downtime time wisely.