The decision to become a consultant is a daunting one; it may be precipitated by any number of events. These might include the need for a mid-career employee to escape an unsatisfactory job or a dead-end position. The desire to continue one's professional career while also providing family care may require an individual to work independently of a formal corporate structure. Whatever the reason, the formula for becoming a successful consultant requires three primary ingredients: a marketable skill, the desire to be a specialist, and persistence.
This paper addresses the many aspects of becoming a SAS consultant -- the mundane as well as the exciting -- with particular emphasis on the three fundamental ingredients mentioned above.
The process of becoming a consultant is analogous to the development of a computer program flowchart in that there are certain questions for which the answer must be "Yes" before subsequent steps may be executed. For example, if you are considering a career in consulting and you do not possess at least some of the required aptitudes, then consideration of another endeavor may be advised. If the proper aptitudes are in place then the next step in the process, that of determining the marketability of your SAS programming proficiency, may be appraised. As subsequent steps in the flowchart are addressed, a logical plan will evolve which will yield a clear picture of the progression required to become a successful SAS consultant.
Some of the steps to be executed as you launch a career in SAS consulting may require the guidance of other professionals. For example, should the consultant's form of business organization be that of a corporation, a partnership or a sole proprietorship? Each form of business has its own set of advantages and disadvantages and professional advice will be helpful.
The traditional definition of the consultant as one who gives professional advice is refined for the purposes of this paper as follows: an expert or independent practitioner who prefers to work alone, with a hands-on approach to a project. This definition is not to be confused with that of the entrepreneur who organizes, manages and assumes the risks of a business or enterprise devoted to consulting. While the consultant and entrepreneur are both individualistic, the specialist normally lacks management aptitudes.
The point at which the efforts of the entrepreneur and consultant diverge occurs when their respective work loads increase to the extent that either additional consultants must be employed or work must be gracefully declined. At this critical decision point, the entrepreneur expands the organization while the specialist may resist expansion and the management of other people to continue focusing on the work.
Regardless of the reason, there is a demand for consultants and they are required by all segments of public and private industry. Consultants become vital resources when corporate personnel requirements increase. Or, they may be needed because they possess a specific experience or esoteric knowledge that the organization only occasionally requires. Skilled consultants work at high levels of productivity because of their experience and specialization. Therefore, they are invaluable for short-term, high intensity, high priority work efforts.
While the expense of contracting a consultant may seem high when compared to the daily cost of an employee, a straight forward analysis of cost data indicates that the short-term cost differential of consultants versus employees is modest.
A comparison of the first-year costs of hiring a full-time SAS programmer versus a SAS consultant, both of whom have the same educational level and ten years of experience might look like the following:
The consultant does not receive any company benefits and does not get paid for absences which include client's holidays, personal business, and vacations.
From the perspective of the employer, the increased cost of the consultant (about 21% in this example) is cost effective. It allows the employer to meet short-term personnel requirements and to avoid the problems associated with laying off employees when it becomes necessary to pare manpower.
Ask yourself if there is a particular area of the SAS System in which you feel comfortable and often challenged? Do you feel you are, or could become, an expert in this particular area with study? Are you enthusiastic about new techniques discovered from reading SAS literature -- techniques which once mastered enhance your competence in your preferred area of SAS programming? If the answer to these questions is "Yes" then you may have an area of the SAS language which you could successfully market. And, you have also addressed the question of desire. Without that burning desire to master aspects of the SAS System, to become a SAS expert, you may not be cut out to be a SAS consultant.
Aptitudes for specialization are an important consideration and there are two groups of aptitudes to be addressed for success in consulting work: preferred working style and analytical/inductive reasoning skills.
Good managers not only have the ability to simultaneously juggle a dozen different problems, they enjoy this state of activity in their daily work. Good managers thrive on phone calls and various minor crises throughout their work day.
In contrast to the individual with strong managerial aptitudes is the specialist. Specialists prefer to focus for long periods of time on a particular problem as they develop a solution. Specialists tend to be annoyed by phone calls and other intrusions to their thought process; they prefer working in an atmosphere that enables them to focus on a problem.
Which daily routine appeals most to you, that of the manager or specialist? Your preference is important. Managerial aptitudes are hard to satisfy in most SAS consulting positions. Thus, if you enjoy managing you will not be satisfied as a SAS consultant. Conversely, if you prefer the work style of the specialist you should enjoy life as a SAS consultant.
The second set of aptitudes relates to the technical requirements of SAS consulting. A good programming consultant requires strong analytical and inductive reasoning skills. Analytical skill allows the programmer to break down a high level concept into its component parts; inductive reasoning allows the programmer to quickly see the relationship among scattered bits of information.
For individuals who are not sure how strong their aptitudes in these areas are, there are standardized tests which may help clarify the situation.
I once felt that I would enjoy sales and contemplated a career change to that field because I was rather dissatisfied with project engineering. I applied for psychological testing and career counseling at the college where I had received my undergraduate degree. Their testing concluded that "the overall profile is a relatively strong endorsement for socially aggressive business roles such as management and sales." Whatever that meant?
Subsequently, I took additional testing at a research foundation at the behest of a friend. The research foundation specialized in aptitude testing and career suggestions, not career counseling. Their thesis was this: we are all born with certain strong aptitudes and if we utilize these strong aptitudes in our vocation and avocations, we should be generally satisfied with our pursuits. In other words, unused aptitudes are a source of frustration and dissatisfaction and an outlet must be found for them. The testing concluded that I had no aptitudes for sales, no aptitudes for management and furthermore, that my strong aptitudes indicated a need for specialization in an area that required the reasoning aptitudes. So much for consistency in tests.
Well, somewhat perplexed, I got a job in engineering sales. It took me less then a year to realize that I did not enjoy sales and I returned to a project engineering assignment which included my first real taste of computer programming.
My work at that time also required specialization and I enjoyed it. Then, my manager suffered a mild heart attack and I was told by his director that I was to manage our 17-employee organization until his return. It was during my manager's 3-month recuperation that the light bulb finally blinked on as I recognized not only how much I missed the work I had been doing, but also how much less satisfying managing other people was to me. Right then and there I knew I would always be a specialist.
Since consultants are often required to work alone, and often at home, it is useful to picture yourself in such a situation. Could you tolerate being at home, alone, with no one to talk to for hours on end? Or, would you be tempted to watch TV or visit the mall? It may seem like a foolish question, but it requires serious consideration. You must be self-motivated and disciplined to work under these conditions.
Are you a competent communicator? Can you prepare a written specification that details what it is you believe the client is after? Can you stand in front of a group of managers and directors to present the specification? Verbal communications and the written communication are important ingredients in successful consulting.
The ability to think on one's feet is also important. I once walked into a conference room for a meeting to review a specification I had prepared for a SAS information system. I expected only the manager for whom I was doing the work and a few of her staff to be present. Not only was she present, but so were her director and four other directors who were interested in the system. I was assured that I did not have the wrong conference room and was encouraged to proceed, which I did while nervously shifting from an informal review to a formal presentation.
Credentials are important to SAS consultants and they include formal education, continuing education (SAS Institute training courses carry Continuing Education Units) and other efforts related to SAS software such as the publication of papers for SAS Users Group conferences. Be sure to include these types of credentials when preparing your resume.
A detailed financial plan is essential to becoming a successful a consultant. In my experience this plan should mandate that the funds needed to cover personal as well as business expenses for at least 60 days always be in place. These funds are needed to support you as you launch your career into consulting. They may also be needed to support you between assignments.
The 60-days figure is somewhat arbitrary; the actual figure developed should be based upon each individual's personal circumstances and experiences. I use 60 days because of my experiences with the acquisition of new contracts. For me, the period from initial client contact to the start of a new assignment has almost always been exactly 2 months.
When you prepare your financial plan remember that expenditures once paid for by your employer are now your responsibility. Such expenses may include insurance, state and Federal taxes, retirement benefits, office supplies, letterheads and business cards. Other costs might include computer equipment and licensing fees for SAS software if you plan to work at home. Often a client will provide equipment needed to work at home, including software and licenses. Each contract is unique and you should discuss these needs with a client before entering into an agreement.
Finally, attempt to erase all short-term debts or, at the very least, include their carrying charges in your financial plan before you embark on a consulting career.
Should you incorporate your new consulting business or operate as a sole proprietorship or partnership? The answer is not easy and the solution will require research and consultation with either a qualified lawyer or tax accountant, or both.
Corporations require formal organization and can obtain financing more readily than sole proprietorships or partnerships. Conversely, corporations represent another layer of paperwork and bookkeeping, incurring additional operating costs.
I began my consulting career as a sole proprietorship and did not incorporate my practice until sometime thereafter. My initial reason for incorporating was to be prepared for the day when a prospective client asked if I were incorporated. There are companies which will not contract with sole proprietorships or partnerships; such clients will not be satisfied with, "Well, I'm not incorporated now but I can take care of it by Monday." My corporation was 4 years old before it became useful.
Once I began to use the corporate structure I stopped operating as a sole proprietorship to minimize bookkeeping functions.
The differences between operating a business as a sole proprietorship and a corporation are vast. As a simple illustration, compare the attribute of owner liability. In a sole proprietorship the owner has unlimited liability, while within the corporate structure the liability is generally limited to the assets of the corporation. My intent here is not to bewilder you but to illustrate the many aspects of organizing a consulting practice which must be appraised.
The cost to incorporate through the services of a lawyer will be in the range of $400 to $600. Or, you may want to tackle the job on your own at a substantially lower cost. There are books and computer software available which provide all the details required to successfully incorporate yourself. Additionally, you may find all of the forms you need to accomplish incorporation in stores which sell corporate supplies -- see "Corporate Supplies" in the Yellow Pages.
At the same time you form your business you should also be discussing taxes and retirement plans.
In addition to a checking account from which you can manage the finances of your business, a separate abbreviated checking account and a retirement plan is suggested. The business account is very active for obvious reasons.
The second checking account is much less active. It is where the monies that accrue to the IRS and state tax agencies, normally due on a quarterly basis, are steadily accumulated. Every time a fee for my consulting services is received I immediately transfer specific percentages to this second checking account and to my retirement plan.
It is rather foolish to be a consultant without a retirement plan. A retirement plan represents a tax deduction and may well be one of the primary reasons for becoming a consultant. Essentially, the Federal government allows you to put a limited amount of pre-tax money into a retirement plan each year -- currently a maximum of $30,000. You may defer tax payments on this money until your retirement when it may be taxed at a lower rate.
As either a sole proprietor or the owner of a corporation, you are permitted a retirement plan. However, there are dramatic differences between the way a retirement plan functions under the two different forms of business and you will need the guidance of a financial adviser to develop a retirement plan.
At the time a contract for your services is being prepared you will normally be asked by a client to provide the Federal Tax Identification Number (TIN) for your business. This is a number issued to your business by the Internal Revenue Service. It is required by the IRS for any business which has employees and collects employee taxes.
If you are incorporated, your corporation will require a TIN since you will most likely be an employee of that corporation. If you are operating as a sole proprietorship or a partnership, and there are no employees, you have two choices: you may use your social security number instead of a TIN, or you may acquire a TIN. I believe a TIN presents a more professional presence to a prospective client than a social security number. IRS Form SS-4, Application for Employer Identification Number, may be used to obtain a TIN.
Federal and state tax payments are a major responsibility. I know a young consultant who gave little thought to paying taxes and eventually got into trouble with the IRS. He was not attempting to defraud the IRS, he simply was not aware of his tax obligations. The end result was that he had to apply for a substantial loan ($12,000) in order to pay the taxes, fines and penalties that had accrued to the IRS.
The acquisition of business insurance can be aggravating unless your insurance agent takes the time to understand what it is that you do and where you most often do it.
Some of the coverage you may need as a consultant include the following:
Some of the coverage you probably do not need as a consultant include the following. And while it may be obvious that these coverage are not required, they are listed because, at one time or another, I have paid unnecessarily for this insurance.
Often clients include standard insurance requirements in their contracts. These requirements are broad in scope and content and may not be applicable to your position as a SAS consultant. Do not hesitate to ask a client for relief from specified insurance requirements when such conditions will not apply to your assignment.
Finally, if you receive a form from your insurance company asking you to provide information about something that has nothing to do with your expertise or practice, you may be paying for an insurance you do not need.
A successful consultant once told me, "Doing the work is easy, getting the work is the hard part". In fact, getting the work is the hardest part of consulting and it is here that the trait of persistence comes to the fore. When you are looking for work you will need persistence as much as any other facet of your personality; you must be diplomatically aggressive to land an assignment.
Where do you begin to look for your first assignment? Well, your first client could well be your former employer. I have seen many employees start out on a consulting career by contracting with their former employer. However, contracting with a former employer can introduce a false sense of accomplishment, that of having gained a contract without having had to expend too much effort. Regardless, it is great way to get started -- just be aware of how hard it can be to cultivate an assignment and that sooner or later, you are going to have to do it.
Your search for SAS consulting work, if not successful with a former employer, should continue with industries where you already have experience. It is with these industries that you are most conversant and probably most attractive to a prospective client. You might network through organizations common to these industries where you have friends or acquaintances that could invite you to a monthly meeting.
Another source of consulting work may be through a temporary manpower placement agency -- an organization which finds contract specialists to fill positions with clients the agency has already developed. Such agencies are a fine way to maintain a consulting career, especially if you are not comfortable with the aspects of cold calling and rejection.
Who uses the SAS System in your neck of the woods? These, of course, are the prospective clients you must contact to make them aware of your consulting status and your SAS capabilities. There are many reliable sources for determining companies which utilize the SAS System. The employment section of the newspaper, under programmers, lists companies looking for computer programmers with experience in specific software, and SAS is often referenced in such advertisements.
SAS users groups represent a viable source of contacts, all of whom work for companies that use the SAS System. There you may network with other SAS users, sharing and gaining SAS knowledge while also becoming informed of potential SAS consulting assignments.
Each year at the SAS Users Group International conference there is a catalog which lists SAS consultants and their services. This catalog, known as the Consultants' Registry, is located at the SUGI registration area. All SAS consultants are invited by the SUGI Coordinator at SAS Institute to participate in the Consultants' Registry by completing a form which is placed in the registry.
Yet another source of SAS consulting work is to function as a subcontractor to consulting firms which specialize in SAS applications.
Finally, are you interested in working internationally? Overseas work is an exciting way to earn a living and such work always carries with it extra financial incentives as well as the extraordinary tax benefits provided to overseas workers by the U. S. tax laws. The SAS System is used worldwide and there are SAS subsidiaries or distributors in many of the major cities of the world. SAS Communications , the quarterly magazine published by SAS Institute Inc. for SAS software users, lists the worldwide SAS subsidiaries and distributors.
A consultant's resume is not at all like the resume you would prepare if you were seeking direct employment. Your consultant's resume should be brief and emphasize your skills. If you are new to consulting, then list your previous employment until it can be replaced with the names of clients as your base of SAS consulting experience grows. An example of a consultant's resume is shown in Figure 1.
When you forward your resume, as you will inevitably be asked to do, the cover letter should state that you will call the person to whom you have sent the resume once he or she has had an opportunity to review it. This relieves that person of the responsibility of having to call you back, which may never happen. Mark your calendar and call 5 business days later. If, when you call, you cannot get any immediate satisfaction, ask when in the future you should call back and mark your calendar accordingly. When you call again, mention that it was the contact who suggested you call back at that time.
Or, better yet, request a meeting. You may be told that a meeting is not necessary as nothing in the way of SAS work is imminent. Regardless, I still seek a meeting so that in the future the contact may remember me as more than just a name on a resume.
I have found that asking for a meeting, "even for 5 minutes in the lobby of your office", sometimes works. A 5-minute meeting in the lobby is rather easy for the manager as there is no need to have you signed in, escorted upstairs, and served the perfunctory cup of coffee. The manager gets to meet you, to ask a few cursory questions, and can now associate you with your resume, all in less than 5 minutes.
Remember, persistence and determination alone are omnipotent.
I am aware of SAS consultants providing services at billing rates from $35 per hour to as much as $125 per hour. The primary reason for this disparity is simply supply and demand. Regardless of the reasons, you must give serious thought to your billing rate. If your rate is too high you may have trouble finding work; if it is too low you may run into financial difficulties even though you are busy.
What items should you consider as you establish your billing rate? Basically, your billing rate should be established upon the salary or net proceeds you expect to derive from your SAS consulting business. The net proceeds are the dollars remaining after you have paid for all of the costs of being in business. These costs, discussed earlier, include Federal and state taxes, retirement plans, insurance, equipment, supplies, etc. The net proceeds provide the monies needed to maintain a style of living you and your family are willing to accept in exchange for the satisfaction of being a SAS consultant. There are many variations to this theme.
For example, if you have retired from a military career with a pension in place that covers most or all of your living costs, you may decide to establish a billing rate that is rather competitive. On the other hand, most likely you are going to have to take a cut in annual income, or net proceeds, if you are leaving a $90,000 per year job to become a SAS consultant.
As you develop a billing rate you must also take into consideration your years of SAS experience and the area of the SAS System in which you specialize. If you have a lot of SAS experience in a somewhat esoteric area of the SAS System, you may be able to command a higher billing rate. Conversely, you will have to work a lot harder to ferret out clients who need your particular SAS specialty.
Proficiency in supplement tasks used with your SAS work is also important. A few years ago I had a client who wanted to reduce my billing rate by about 20% based on the fact that they had acquired the services of some additional SAS consultants for a fee somewhat lower than mine. I successfully defended my billing rate by reminding the client that not only had I provided SAS programming expertise, but I had also prepared several detailed programming specifications which were the basis for development of some of the client's data management systems.
An alternative to doing work on an hourly or per diem basis is to contract work on a lump sum or not-to-exceed basis. A lump sum contract requires you to complete the work for a fixed cost. Before developing a proposed cost for a lump sum contract you must have a detailed specification and you must understand the project thoroughly. You must estimate all project-related costs, plus contingency, profit and overhead.
A not-to-exceed contract involves work where the specification is not nearly as detailed as would be required for a lump sum contract. The client pays project-related costs, but only up to a not-to-exceed figure. Your detailed estimate for this kind of work must include the same costs as those developed for a lump sum contract. However, the percentage of contingency applied to the direct cost is normally higher.
In either case, you will be using your billing rate to estimate the cost of your time. Therefore, you must be satisfied with your billing rate. It must be realistic and competitive and, based on supply and demand, somewhat flexible.
Once you have won a SAS consulting assignment, the hardest part of consulting is over; doing the work is generally simpler. You are versed in some aspect of the SAS System or you should not have accepted the contract. Therefore, you should be able to perform as a professional.
A written contract before you start the work or before you commit any funds to a work effort is mandatory. Contracts specify explicitly the understanding that exists between the client and the consultant; it should address all of your concerns including work schedules, payment schedules, equipment responsibilities and other technicalities. I request from my clients, not always with success, a 30-day notice of termination so that I can begin to look for my next assignment. Under normal circumstances a consultant is rarely terminated without advance notice, but I still request at least 30 days notice.
Before starting the assignment identify dependable sources of information to help with solutions in the event you encounter programming problems. If you must get help from one of your client's employees, get the help. While seeking help from such a source may seem to expose a weakness, it actually shows maturity, and concern for getting the job done. And you, as a SAS consultant, will often be asked for help by your client's employees, which you should try to provide to the best of your ability, within limits. Consultants are present to help and unshared knowledge has very little value.
Corporate cultures vary from company to company and from division to division in some companies. You would be well advised to be aware of these cultural differences. Do not violate your client's company policies, stated or unstated. If you have a need to be conspicuous, make it because of your consulting excellence. Some other do's and don'ts (some learned the hard way) include:
Apparently small issues such as these can create a favorable reputation which, for a consultant, can directly impact your level of ongoing business.
Inevitably, the time comes when a consultant must be "let go." And once you are notified that your current consulting assignment is nearing an end, you must begin to look for new work. A good place to start is with your current client. Is there another area of your client's operations where you feel you could be of service? Do you see an opportunity which you could detail in a proposal? If so, then you must attempt to find work in that area. And, since you are already contracted with the organization, you will likely be given preferred consideration.
Over the past few years I have been able to service at least two clients at a time, each on a part-time basis. This is due, in part, to the fact that some SAS-based systems I have designed occasionally require upgrading. The advantage of providing services to two clients simultaneously is that when one of the assignments terminates you still have a second contract to carry you while you line up new work. A major disadvantage is that there are times when you must work evenings and weekends to satisfy deadlines. Some clients are not interested in part-time SAS consultants while others are, particularly when budgets are restricted.
A percentage of your consulting career must be devoted to marketing, to discovering future SAS consulting possibilities to minimize downtime. Past clients represent a valuable resource for new work and you must maintain periodic contact with them. A marketing plan as simple as calling past clients every six months is worthwhile.
There are many benefits and some shortcomings to being a SAS consultant. The variety of consulting assignments and venues may be more appealing than the daily routine of the same office and work. The presence of tax deductions and personal retirement plans are an added incentive and, the gratification of being able to specialize is also meaningful.
The major shortcoming are those periods when you may be without a consulting assignment and, hence, income. So, the "be independent, get rich" cliche concerning consulting is more myth than fact, and it has a downside, too: "no work, no pay."
Another disparity concerns the fact that, because of your expertise with the SAS software, occasionally you may be asked to meet SAS programming assignments which are not as exciting as others. However, less glamorous assignments are better than no assignment, and if the work is for a new client, well, you have a new client!
The future of consulting in general, and SAS consulting in particular, is bright for a number of reasons. During the 1990s the number of young people entering the work force will diminish. A shortage of quality workers can only increase the demand for skilled workers, including consultants. Also, the trend towards streamlined organizations means that consultants will more often be used to staff projects.
Finally, because the SAS System is the market-leading applications system for accessing, managing, analyzing and presenting data, the demand for those with SAS System expertise will also continue to intensify.
FURTHER WRITINGS BY, YOU GUESSED IT, OTHER CONSULTANTS
Butler, Robert A. (1990), "An Introduction to SAS Consulting From a Business Perspective", NorthEast SAS Users Group Conference Proceedings: NESUG '90, Cary, NC: SAS Institute Inc.
Edwards, Paul & Sarah (1990), "Working From Home", Jeremy P. Tarcher, Inc., Los Angeles.
Holtz, Herman (1991), How To Succeed As An Independent Consultant", Second Edition, John Wiley & Sons, Inc., New York.
Johnson, Barbara L. (1982), "Private Consulting", Prentice-Hall, Englewood Cliffs, NJ.
Marx, Tom (1990), "The Consultant's Life Is/Is Not a Happy One", SAS Users Group International Conference Proceedings: SUGI 15, Cary, NC: SAS Institute Inc.
McQuown, Judith (1988), "Inc. Yourself", Sixth Edition, MacMillan, New York.
O'Leary, Meghan, "Home Sweet Office", CIO, Vol. 4, No. 10, pp. 31-40.
Please direct any comments or questions to:
BOSCH SYSTEMS INC.
P. O. Box 634
Martinsville, NJ 08836
The author wishes to express a special note of thanks to the following who in one way or another helped with the completion of this paper:
SAS, Base SAS, SAS/AF, SAS/GRAPH, SAS System and SAS Communications are registered trademarks of SAS Institute Inc., Cary, NC, USA.
RECENT PROFESSIONAL EXPERIENCE
ABC DRUG INSTITUTE, Mulberry, NJ (Apr '92 - Present)
Programming support for an NDA submission
XYZ RESEARCH GROUP, Ann Valley, NJ (Jan '89 - Apr '92)
Investigator documentation tracking reports
Clinical reporting system for infections and vital signs
WORLD PHARMACEUTICAL INC., Seashore, NJ (Mar '87 - Dec '88)
Clinical drug study adverse reactions summaries
HARDWARE/OPERATING SYSTEMS EXPERIENCE
Machines - IBM 4381, 3084 Sierra, 3090, PCs Operating Systems - MVS/TSO(CLIST, ISPF), VM/CMS(REXX), MS-DOS
Strong analytical/inductive reasoning, polished written and verbal communications, self-motivated.
BS/Computer Sciences Sandbeach Tech 1981
SAS Institute Training: SAS Report Writing, June 1988, SAS Color Graphics, May, 1990
"Proc Tabulate: Easier Said Than Done" (1990), SUGI 15, Cary, NC: SAS Institute Inc.