What is Really like to be a CONSULTANT!

0:00 Everything I wished I knew before becoming a freelance consultant. If you are a software engineer, data engineer, IE engineer, or anyone working in tech, you have probably heard that consultants earn more than employees, but nobody really explains how it works. Who finds the clients? Why do companies even hire consultants? Consultants make twice as much money as employees, and what are the downsides nobody talks about? I have worked as a freelance consultant for the past 2 years and 5 years as an employed consultant. In this video, I'm going to explain everything I wish someone had told me before I started. My name is Annie. I'm a freelance technology consultant working in financial and wealth management industry.

0:50 During the last 5 years, I have worked on projects for multiple companies, and during the last 2 years, I have been running my own consulting business. Everything I share today comes from my own experience. This isn't financial or legal advice. It is simply how consulting works in practice. What is consulting? Simply explained, a consultant is an expert hired temporarily by another company. Instead of becoming a permanent employee, you are brought in because you have a specific skill or expertise. Projects can last a few months or several years. The biggest difference is that consultants regularly move between companies instead of staying in one place.

1:36 What is the difference between employed consultant and freelance consultant? There are really only two ways to become a consultant. Employee consultant, you are employed by a consulting company. They find clients, they negotiate contracts, they invoice the customer, they handle administration, and you simply deliver the work. As a freelance consultant, you own the business. You find or help find the clients. You negotiate rates. You invoice, and you run the business. But, you also keep much more of what the client pays. By the way, I'm thinking about turning these into a whole series where I will explain how consultancy actually works, from finding clients and negotiating rates to invoices, contracts, and taxes.

2:26 If that is something you'd like to see, leave a comment below and tell me what you want me to cover. Now, back to the video. Why do freelancers earn more? This is where most people get confused. The higher income isn't free money. You are taking on much more responsibility. As a freelancer, you are effectively running a business. You are responsible for sales, marketing, networking, contracts, administration, tax, finding the next project. The reward is that you keep most of the pay yourself. Why I became a freelancer. This is my story. I actually started as an employee consultant. After about 3 years, I realized something. I was doing exactly the same work as freelance consultant sitting next to me.

3:14 The client expected exactly the same quality. We had the same responsibilities. The only real difference was who received the money. That made me curious. So, I spent months talking to freelancers, reading online, asking questions, and learning how the business actually worked. Eventually, I decided to start my own consulting company. How clients actually hire consultants. This is one of the most valuable section. Many people think companies hire freelancers directly. Often, they don't. Instead, there are intermediaries. Sometimes they are called consulting brokers, sometimes staffing firms, sometimes recruiting partners.

3:59 Large companies usually prefer working with these partners because contracts are simpler, legal risk is lower, one partner can supply hundreds of consultants. These intermediaries normally keep a percentage of a contract value. How much depends on the market and the agreement. One piece of advice I would give is to build relationships with several good recruiters or consulting partners rather than relying on just one. Pros and cons with freelancing. Pros are that earnings are higher, you have huge learning curve, different industries, massive professional network, more freedom, potentially more flexible. Cons are less job security, you are responsible for finding projects, more administration, income can fluctuate, no guarantees, no bonuses, and you're running your own business, not just writing a code.

4:54 When should you go freelance? I personally don't think people should become freelancers immediately. First, become valuable. Develop expertise, build a reputation, become someone companies specifically want. Once that happens, freelancing becomes much easier. The biggest mistake I see is people trying to freelance before they have built any real market value for themselves. My biggest advice is, if I could give one piece of advice, don't compete by being the cheapest. Compete by becoming the best. Companies don't hire expensive consultants because they are expensive. They hire them because they solve expensive problems.

5:42 Focus on becoming that person. Thanks for watching. If this video helped you understand consulting a little better, consider subscribing because I'm planning to share a lot more content about consultancy and working in tech and finance. And if there are topics you'd like me to cover next, let me know in the comments. I read every single one. Bye.