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The Business of Statistical Consulting

  • 1.  The Business of Statistical Consulting

    Posted 10-25-2016 12:32
    I am currently pursuing  graduate degree in statistics at Georgia Tech. After I graduate, I want to work as an independent statistical consultant.

    For those of you running your own consulting practice, what is the most difficult part of running the business and/or working with clients?






  • 2.  RE: The Business of Statistical Consulting

    Posted 10-25-2016 12:39

    The biggest difficulty I had was just keeping track of business-related items for tax purposes.

     

    Nobody wants to leave money on the table, so coming up with a good method of accounting (spreadsheets, logbooks, etc.), having a dedicated room for your work so that you can use as a home office deduction, keeping track of depreciating computer equipment, etc. can all help lower your taxes.

     

    Dealing with the clients was much easier than reading all the IRS instructions.

     

    -Mark



    ------Original Message------

    I am currently pursuing  graduate degree in statistics at Georgia Tech. After I graduate, I want to work as an independent statistical consultant.

    For those of you running your own consulting practice, what is the most difficult part of running the business and/or working with clients?






  • 3.  RE: The Business of Statistical Consulting

    Posted 10-25-2016 13:27
    Renita,
    You'll get a lot of good advice from this group to apply when you decide on stat consulting.  The biggest thing I would advise is to work for other organizations at least 5 years first.  That will give you lots of hands-on consulting experience that you will need before going independent and getting your own clients and gigs.


    ------Original Message------

    I am currently pursuing  graduate degree in statistics at Georgia Tech. After I graduate, I want to work as an independent statistical consultant.

    For those of you running your own consulting practice, what is the most difficult part of running the business and/or working with clients?






  • 4.  RE: The Business of Statistical Consulting

    Posted 10-25-2016 14:29
    I agree with Mark, but wonder how many "independent" statistical consultants have as little as 5 years experience. Most I know had more than 10 years experience before independent consulting, some with much more.
    David

    --
    David R. Bristol, PhD
    President, Statistical Consulting Services, Inc.
    1-336-293-7771


    ------Original Message------

    Renita,
    You'll get a lot of good advice from this group to apply when you decide on stat consulting.  The biggest thing I would advise is to work for other organizations at least 5 years first.  That will give you lots of hands-on consulting experience that you will need before going independent and getting your own clients and gigs.




  • 5.  RE: The Business of Statistical Consulting

    Posted 10-26-2016 10:10

    I whole-heartedly agree with Mark.  Your best bet is to do a stint with a company (like a CRO) or an independent consultant so you can gain the experience of how consulting is done.  While you will have fresh perspective of statistical techniques, but you will have no  practical experience. There are many nuances to consulting that cannot be taught or divulged in a forum.  Working for someone else will also give you a chance to build some "fans" who will follow you into your own independent endeavor.  I can tell you from my own experiences that EVERY client has been either someone I already knew, or someone who got my name from someone I already knew.  I have never advertised or cold-called for work.

     

    Lastly, think about what you are willing to do and what you are not interested in doing.  For example, I make it clear to my clients that I do not do large scale statistical programming or model development.  However, I spent a lot of time strategizing and planning for studies and reviewing output of statistical programming.  If you leave yourself wide open, you will find that you are spending a lot of time doing things that do not interest you.

     

    Susan E. Spruill

    Susan E. Spruill, PStat®

    Statistical Consultant, President

    Applied Statistics and Consulting

    828-467-9184 (phone)

    Professional Statistician accredited by the American Statistical Association

    www.appstatsconsulting.com

     



    ------Original Message------

    Renita,
    You'll get a lot of good advice from this group to apply when you decide on stat consulting.  The biggest thing I would advise is to work for other organizations at least 5 years first.  That will give you lots of hands-on consulting experience that you will need before going independent and getting your own clients and gigs.




  • 6.  RE: The Business of Statistical Consulting

    Posted 10-25-2016 15:15
    I hate accounting. My joke is that if my bank balance is within $100 of
    what the bank says, I chalk up the difference to sampling error.

    I especially don't like invoicing, and I put it off for months, which is
    really bad for cash flow. If my wife did not have a full time job, I'd
    be in big trouble. I also have a lot of difficulty keeping personal
    charges from sneaking onto my business credit card and business charges
    from sneaking onto my personal credit card.

    If I could elaborate on what some of the other people have mentioned, I
    believe that independent consulting, to a large extent, is an old
    person's game. There are three reasons for this. First, you'll get most
    of your clients from "word of mouth" and the older you are, the more
    people there are who know you and are willing to spread the word on your
    behalf.

    Second, as a consultant, you will get questions from all different
    directions. It takes a long time to build up a base of expertise enough
    so that you can answer most of those questions without having a
    co-worker you can fall back on.

    Third, most of what you will do ten or twenty years from now will be the
    result of learning on the job. If you are a consultant in a larger
    organization, you will find that that they will invest money in you to
    make you a better consultant because they will see the benefits down the
    road. The funny thing about clients is that they are extremely reluctant
    to pay you to learn something new on their dime. Their time frame is
    very short term and they don't benefit from the seasoned professionalism
    that you will develop by 2030.

    Now you do have an advantage in that most of us old dogs still struggle
    with learning new tricks. And if you are in an area were you can pretty
    much guarantee that the questions you get will be closely related to
    your area of study, especially to the work you do on your dissertation,
    then you can still be successful as an independent consultant.

    Don't let us discourage you if your heart is in being an independent
    consultant. You didn't ask for what the best thing was about independent
    consulting, but I will tell you that independent consulting is great
    because you work for the perfect boss, yourself. If you're young, you'll
    struggle with finding clients and you'll struggle with answering all the
    questions that seem to come out of left field. But if you really love
    what you do and you work hard at it, you will be successful. I know a
    fair number of consultants who are much younger than me, and they seem
    to be doing okay.

    Steve Simon, blog.pmean.com

    ------Original Message------

    I am currently pursuing  graduate degree in statistics at Georgia Tech. After I graduate, I want to work as an independent statistical consultant.

    For those of you running your own consulting practice, what is the most difficult part of running the business and/or working with clients?






  • 7.  RE: The Business of Statistical Consulting

    Posted 10-25-2016 15:32
    I agree with the previous responses. 

    Here is what I tell any of my friends, former coworkers, etc. who ask me about being a consultant:

    The main problem with being an independent consultant, other than the experience needed, a niche, and the clients is ---

    Who will do the marketing of your skills?
    Who will do the taxes and the book keeping?
    Who will develop the material if you're doing training?
    Who will handle any legal issues, interpret contracts, etc.?
    Who will do all the above while you do the work?

    If you are fortunate to handle all of the above, do you have enough of a money cushion to wait until the several months it takes for many clients to pay you?

    Patrick Spagon, Ph.D.


    ------Original Message------

    I am currently pursuing  graduate degree in statistics at Georgia Tech. After I graduate, I want to work as an independent statistical consultant.

    For those of you running your own consulting practice, what is the most difficult part of running the business and/or working with clients?






  • 8.  RE: The Business of Statistical Consulting

    Posted 10-25-2016 17:12
    Regarding the financial cushion... My brother did independent consulting, he billed as follows:
    My rate is XXX (extremely high), but I give a 50% discount for payment within 30 days of the invoice date.
    The 50% discount was his "real" charge rate.

    He got paid in a timely manner.

    ------Original Message------

    I agree with the previous responses. 

    Here is what I tell any of my friends, former coworkers, etc. who ask me about being a consultant:

    The main problem with being an independent consultant, other than the experience needed, a niche, and the clients is ---

    Who will do the marketing of your skills?
    Who will do the taxes and the book keeping?
    Who will develop the material if you're doing training?
    Who will handle any legal issues, interpret contracts, etc.?
    Who will do all the above while you do the work?

    If you are fortunate to handle all of the above, do you have enough of a money cushion to wait until the several months it takes for many clients to pay you?

    Patrick Spagon, Ph.D.




  • 9.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 00:13

    I think these are great questions to ask oneself when starting any business. However, be careful about being penny wise but pound foolish.

    As a CPA handling the accounting and taxes for small businesses, many clients come to me to tackle the administrative burden that gets in the way of doing their actual work. Paying someone to take care of these tasks actually can increase your bottom line because you can focus your productive energies elsewhere.

    Also, it's not just about feeling comfortable handing off the bookkeeping and taxes to an accountant. A few hours with a good business attorney can also save you a lot of heartache should a contract later fail to protect your interests. 

    Think of accountants and lawyers as advisers who are part of your team to help you succeed. Try to find them before you start your business, rather than when your tax return is due or you are in a dispute, and you'll benefit from early advice in avoiding pitfalls that are going to sap your energy down the line.

    ------------------------------
    --
    Gregory Csikos, CPA
    www.csikoscpa.com | greg@csikoscpa.com

    PO Box 600611
    Newton, MA 02460-0006

    P: 857.636.1694
    F: 857.201.3202


    This e-mail and the documents accompanying it contain information which is confidential or privileged. The information is intended to be for the use of the individual or entity named in this transmission. If you are not the intended recipient, be aware that any disclosure, copying, distribution or use of the contents of this information is prohibited. If you have received this e-mail in error, please notify me by telephone immediately and promptly delete this email from your computer.


    Original Message


  • 10.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 10:32

    Gregory's advice is right on target.

     

    As statisticians, we like to be involved in the project from the beginning which is when our advice can be most effective. The same is true for CPAs and attorneys. They are professionals who can help us in areas where they are experts and we are not.

     

    For the longest time I managed the tax aspects of my business personally. As the business grew I found the need to rely on the advice of a professional to handle my taxes. It was one of the best business decisions of my life. Not only I can focus my time and energy in growing my business, but also he is an invaluable source of advice for future directions.

     

    A CPA knows when your tax filings are due and is aware of changes in the tax law that could benefit you (or not). They can also help you set up your own retirement plan, which you need to do if you don't have the benefit of a 401(k) offered by your employer; find liability and professional insurance (you know you need those, right?); and other benefits that you usually get through your employer: life insurance, disability insurance, etc. They can also help you manage your withholdings to make sure you are not left with a huge tax bill at the end of the year or a large refund that means you are paying too much every month.

     

    None of this means that you can handle off your taxes to your accountant and forget about it. In the end, it is your signature that goes at the bottom of the tax return, so you need to have a good understanding of the tax laws, but I have the peace of mind to know that my returns are professionally managed and much less likely to have any significant errors than if I had done them myself.

     

    Hope this helps other consultants just starting or people who are in the fence about hiring a CPA.

     

    Carlos Alzola

    Data Insights, President

    Ph: (703) 638-5676 (m)

    calzola@verizon.net

     



    ------Original Message------

    I think these are great questions to ask oneself when starting any business. However, be careful about being penny wise but pound foolish.

    As a CPA handling the accounting and taxes for small businesses, many clients come to me to tackle the administrative burden that gets in the way of doing their actual work. Paying someone to take care of these tasks actually can increase your bottom line because you can focus your productive energies elsewhere.

    Also, it's not just about feeling comfortable handing off the bookkeeping and taxes to an accountant. A few hours with a good business attorney can also save you a lot of heartache should a contract later fail to protect your interests. 

    Think of accountants and lawyers as advisers who are part of your team to help you succeed. Try to find them before you start your business, rather than when your tax return is due or you are in a dispute, and you'll benefit from early advice in avoiding pitfalls that are going to sap your energy down the line.

    ------------------------------
    --
    Gregory Csikos, CPA
    www.csikoscpa.com | greg@csikoscpa.com

    PO Box 600611
    Newton, MA 02460-0006

    P: 857.636.1694
    F: 857.201.3202


    This e-mail and the documents accompanying it contain information which is confidential or privileged. The information is intended to be for the use of the individual or entity named in this transmission. If you are not the intended recipient, be aware that any disclosure, copying, distribution or use of the contents of this information is prohibited. If you have received this e-mail in error, please notify me by telephone immediately and promptly delete this email from your computer.

    ------------------------------


  • 11.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 11:32
    Great discussion! Before I saw this thread, I was about to ask whether
    independent consultants get to work on interesting projects often. By
    “interesting” I mean something that requires advanced quantitative
    modeling and is not limited to descriptive statistics or maybe
    logistic regression at best.


    Now that I've read the thread I see that my question was moot:
    apparently, an independent consultant is, first and foremost, a
    business person who can bear (or even enjoy) a large overhead that has
    nothing to do with working with data, let alone advanced quantitative
    modeling. Roughly speaking, if one's main interest is in doing
    Statistics, he/she has no chance of becoming a successful independent
    consultant.

    Regards,
    Nik Tuzov

    ------Original Message------

    Gregory's advice is right on target.

     

    As statisticians, we like to be involved in the project from the beginning which is when our advice can be most effective. The same is true for CPAs and attorneys. They are professionals who can help us in areas where they are experts and we are not.

     

    For the longest time I managed the tax aspects of my business personally. As the business grew I found the need to rely on the advice of a professional to handle my taxes. It was one of the best business decisions of my life. Not only I can focus my time and energy in growing my business, but also he is an invaluable source of advice for future directions.

     

    A CPA knows when your tax filings are due and is aware of changes in the tax law that could benefit you (or not). They can also help you set up your own retirement plan, which you need to do if you don't have the benefit of a 401(k) offered by your employer; find liability and professional insurance (you know you need those, right?); and other benefits that you usually get through your employer: life insurance, disability insurance, etc. They can also help you manage your withholdings to make sure you are not left with a huge tax bill at the end of the year or a large refund that means you are paying too much every month.

     

    None of this means that you can handle off your taxes to your accountant and forget about it. In the end, it is your signature that goes at the bottom of the tax return, so you need to have a good understanding of the tax laws, but I have the peace of mind to know that my returns are professionally managed and much less likely to have any significant errors than if I had done them myself.

     

    Hope this helps other consultants just starting or people who are in the fence about hiring a CPA.

     

    Carlos Alzola

    Data Insights, President

    Ph: (703) 638-5676 (m)

    calzola@verizon.net

     





  • 12.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 12:19
    Nik,
    This conclusion is not true. I do little programming, but I do primarily strategic work for the pharmaceutical industry. As such, I also do very little modeling, as the model is specified in the analysis plan; although in a study that did not achieve the desired outcome, post hoc analyses including modeling may be used to further discover any hidden issues.
    The strategic work I do is typically 'think'. I contribute to study designs, protocols, and analysis plans. This contribution must be more than statistical - collection of the wrong variable at the wrong time or in the wrong manner cannot be saved by great statistics.

    I don't have an attorney; my clients prepare the contracts, but I review them carefully.
    I have a group of accountants, but rarely see them outside of tax time.
    I have a payroll group that handles my financial records and pays my taxes.

    Consulting can be an exciting opportunity. 
    David


    --
    David R. Bristol, PhD
    President, Statistical Consulting Services, Inc.
    1-336-293-7771


    ------Original Message------

    Great discussion! Before I saw this thread, I was about to ask whether
    independent consultants get to work on interesting projects often. By
    “interesting” I mean something that requires advanced quantitative
    modeling and is not limited to descriptive statistics or maybe
    logistic regression at best.


    Now that I've read the thread I see that my question was moot:
    apparently, an independent consultant is, first and foremost, a
    business person who can bear (or even enjoy) a large overhead that has
    nothing to do with working with data, let alone advanced quantitative
    modeling. Roughly speaking, if one's main interest is in doing
    Statistics, he/she has no chance of becoming a successful independent
    consultant.

    Regards,
    Nik Tuzov



  • 13.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 12:28
    Dear Nikita

    I was surprised at your conclusion that "if one's main interest is in doing Statistics, he/she has no chance of becoming a successful independent consultant."  In my experience of 15 years as an independent consultant following a 30 year career in industry/academia, your conclusion is not warranted.  I guess it depends to a degree on your definition of "doing statistics".  As a previous contributor has mentioned, the impact of our profession is often best felt at the beginning of a project.  Only statisticians are formally trained in experimental design and our contribution at that stage is critical.  Just ask any statistician who has been asked to "salvage" an inappropriately planned study with creative statistics.  Performing analyses at the end of a project is also critical, and I have been involved in essentially every therapeutic area in both roles.  

    When performing analyses of clinical trials for submission to the FDA (and other regulatory agencies), the statistician must comply with a federal regulation, 21CFR11, which demands a significant (and very onerous) amount of record keeping, SOPs, audit trails, etc.  We all specialize in different areas, but when I decided to become an independent statistician, I decided that I would specialize in the design and strategy of clinical trials and not in the performance of the analytical aspects - primarily to avoid this regulatory requirement.  While I do develop statistical analysis plans and work closely with regulatory agencies regarding these plans, I do not actually perform the analyses.  The provides me the opportunity of "doing statistics" in the strategic, design, analysis, and interpretation aspects without actually performing the analyses myself.  While I could perform these analyses if I needed to, it is more effective for my clients to engage a contract research organization to actually perform the analyses with my involvement.  Although some may consider me lazy, I can stay current with methodology, but don't need to stay current with a multitude of analysis/programming skills that are better offered by specialists.

    Back to your point - "doing statistics" depends on your preferences.  If performing analyses is important, you will find plenty of interesting opportunities across a variety of therapeutic areas to satisfy your interests.  If design is your thing, the answer is the same.  While being your own boss demands other skills (business development, accounting, etc.), these comprise the overhead that an organization (university, industry, government) would provide you if you worked for them.  Once established, these considerations become background noise and are to a great degree ignorable.

    I do think you should be more open to the opportunities of being an independent consultant.  As others have said, one needs experience before starting out, but once established, it is a career that is extraordinarily interesting, flexible, and satisfying.

    I wish you the best.

    Bruce

    Bruce E. Rodda, Ph.D., M.B.A., P.Stat.
    Adjunct Professor of Biostatistics and Public Health
    The University of Texas
    Strategic Statistical Consulting LLC
    19590 Sandcastle Drive, Suite 101
    Spicewood, TX  78669
    Office:  1-512-264-9994
    Mobile:  1-512-560-9734
    StrategicStatisticalConsulting.com


    ------Original Message------

    Great discussion! Before I saw this thread, I was about to ask whether
    independent consultants get to work on interesting projects often. By
    “interesting” I mean something that requires advanced quantitative
    modeling and is not limited to descriptive statistics or maybe
    logistic regression at best.


    Now that I've read the thread I see that my question was moot:
    apparently, an independent consultant is, first and foremost, a
    business person who can bear (or even enjoy) a large overhead that has
    nothing to do with working with data, let alone advanced quantitative
    modeling. Roughly speaking, if one's main interest is in doing
    Statistics, he/she has no chance of becoming a successful independent
    consultant.

    Regards,
    Nik Tuzov



  • 14.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 14:02

    Not true. You can do whatever type of work you want as long as people are willing to pay for it. The challenge with independent consulting is the mix of time and effort with respect to what you want to get paid for. If you're independent, you could probably expect that to be anywhere from 1:1 to 3:1 doing statistics vs. running and developing a business, depending on a number of factors; and a good part of doing statistics depends on how well you manage the non-statistics tasks. Of course, when you work for an organization as a statistician, a lot of that is taken care of for you so that you can focus most of your time on doing statistics.

    So, if you're really looking to dedicate yourself nearly 100% on statistical work, and can't stand the idea of selling, operating, etc., independent consulting really isn't for you, but outside of that, it won't limit the type of (paid) work you're looking to do.

    Someone one said you could consult on just about anything, and that's very true. You just have to make sure that you have people to pay you for it and that you have things taken care of so that can happen, and that takes a lot of work!

    ------------------------------
    Michiko Wolcott
    Principal Consultant
    Msight Analytics

    Original Message


  • 15.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 11:40
    Most of the advice in this thread has been great, thanks everyone for chiming in.

    I would add that you don't need to wait until after you graduate to start consulting; when I was a grad student I joined my campus's stat consulting center, and I learned as much or more from them as any coursework.  The pay was below market rate but they have a built-in client base and it's great experience.

    Also you can ignore this advice if you are deep into your dissertation, at some point that becomes top priority.   


    ------Original Message------

    Gregory's advice is right on target.

     

    As statisticians, we like to be involved in the project from the beginning which is when our advice can be most effective. The same is true for CPAs and attorneys. They are professionals who can help us in areas where they are experts and we are not.

     

    For the longest time I managed the tax aspects of my business personally. As the business grew I found the need to rely on the advice of a professional to handle my taxes. It was one of the best business decisions of my life. Not only I can focus my time and energy in growing my business, but also he is an invaluable source of advice for future directions.

     

    A CPA knows when your tax filings are due and is aware of changes in the tax law that could benefit you (or not). They can also help you set up your own retirement plan, which you need to do if you don't have the benefit of a 401(k) offered by your employer; find liability and professional insurance (you know you need those, right?); and other benefits that you usually get through your employer: life insurance, disability insurance, etc. They can also help you manage your withholdings to make sure you are not left with a huge tax bill at the end of the year or a large refund that means you are paying too much every month.

     

    None of this means that you can handle off your taxes to your accountant and forget about it. In the end, it is your signature that goes at the bottom of the tax return, so you need to have a good understanding of the tax laws, but I have the peace of mind to know that my returns are professionally managed and much less likely to have any significant errors than if I had done them myself.

     

    Hope this helps other consultants just starting or people who are in the fence about hiring a CPA.

     

    Carlos Alzola

    Data Insights, President

    Ph: (703) 638-5676 (m)

    calzola@verizon.net

     





  • 16.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 13:57
    Hello Bruce:

    Thank you for replying. Does the process of getting clients take care
    of itself and become "ignorable", too?

    Regards,
    Nik

    ------Original Message------

    Gregory's advice is right on target.

     

    As statisticians, we like to be involved in the project from the beginning which is when our advice can be most effective. The same is true for CPAs and attorneys. They are professionals who can help us in areas where they are experts and we are not.

     

    For the longest time I managed the tax aspects of my business personally. As the business grew I found the need to rely on the advice of a professional to handle my taxes. It was one of the best business decisions of my life. Not only I can focus my time and energy in growing my business, but also he is an invaluable source of advice for future directions.

     

    A CPA knows when your tax filings are due and is aware of changes in the tax law that could benefit you (or not). They can also help you set up your own retirement plan, which you need to do if you don't have the benefit of a 401(k) offered by your employer; find liability and professional insurance (you know you need those, right?); and other benefits that you usually get through your employer: life insurance, disability insurance, etc. They can also help you manage your withholdings to make sure you are not left with a huge tax bill at the end of the year or a large refund that means you are paying too much every month.

     

    None of this means that you can handle off your taxes to your accountant and forget about it. In the end, it is your signature that goes at the bottom of the tax return, so you need to have a good understanding of the tax laws, but I have the peace of mind to know that my returns are professionally managed and much less likely to have any significant errors than if I had done them myself.

     

    Hope this helps other consultants just starting or people who are in the fence about hiring a CPA.

     

    Carlos Alzola

    Data Insights, President

    Ph: (703) 638-5676 (m)

    calzola@verizon.net

     





  • 17.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 17:41
    Dear Nik

    Absolutely not!  For me, this is one of the most challenging aspects of consulting.  As others have noted, a large fraction of their work comes from networking, and the more people who know and respect you as a statistician, the better the network.  However, networking is rarely enough by itself and finding, nurturing, and making new clients part of your network is a critical component of independent consulting.

    I apologize if I implied that this was an ignorable effort.

    Bruce
    Bruce E. Rodda, Ph.D., M.B.A., P.Stat.
    Adjunct Professor of Biostatistics and Public Health
    The University of Texas
    Strategic Statistical Consulting LLC
    19590 Sandcastle Drive, Suite 101
    Spicewood, TX  78669
    Office:  1-512-264-9994
    Mobile:  1-512-560-9734
    StrategicStatisticalConsulting.com


    ------Original Message------

    Hello Bruce:

    Thank you for replying. Does the process of getting clients take care
    of itself and become "ignorable", too?

    Regards,
    Nik



  • 18.  RE: The Business of Statistical Consulting

    Posted 10-25-2016 17:30

    Renita, I wish you the best!  I have had success thinking of myself as an entrepreneur and business owner first, and statistician second.  There are tons of free resources out there for female entrepreneurs - take advantage of them, find a free business boot camp, really dive in and learn the business side of what you want to do.  Be prepared to do a ton of networking and marketing.  The trade-off is doing what you love and having an amazing boss. - Melissa 

    ------------------------------
    Melissa Kovacs
    Principal / Founder
    FirstEval, LLC



  • 19.  RE: The Business of Statistical Consulting

    Posted 10-26-2016 07:47

    Kim Love (who is currently the section's newsletter editor and will be chair in 2018) maintains a blog about her experiences starting up an independent consulting company over the past year.  A lot of the comments made in this thread are echoed in her posts, and she has lots of good advice that hasn't been mentioned.  I highly recommend checking it out!

     

    http://www.krloveqcc.com/?q=blog

     

     

    _________________________________________

    Chris Holloman  •  ICC Advanced Analytics

    Chief Data Scientist

     

    o. 614.523.3070 ext 215  •  m. 614­­.668.7894

    2500 Corporate Exchange Dr. • Columbus, OH 43231

    www.icctechnology.com

     

     



    ------Original Message------

    Renita, I wish you the best!  I have had success thinking of myself as an entrepreneur and business owner first, and statistician second.  There are tons of free resources out there for female entrepreneurs - take advantage of them, find a free business boot camp, really dive in and learn the business side of what you want to do.  Be prepared to do a ton of networking and marketing.  The trade-off is doing what you love and having an amazing boss. - Melissa 

    ------------------------------
    Melissa Kovacs
    Principal / Founder
    FirstEval, LLC
    ------------------------------


  • 20.  RE: The Business of Statistical Consulting

    Posted 10-26-2016 09:44
    Hi group --

    I'm in my 22nd year as an independent statisticial consultant. I specialize in working with pharmaceutical, biotech and medical device companies and have made a pretty good living doing it. 

    Like Mitchell, I am trying to expand into areas outside my professional "comfort zone". To a degree I have in that since about 2009 I've worked with a handful of doctoral candidates providing statistical assistance in their chosen areas, all different and none related to pharma, biotech or medical devices. It was certainly eye-opening and refreshing to apply my knowledge and skills to something unfamiliar! The first time I did this was by luck -- I was available when the student's first choice wasn't. After that I got a second chance and then it was word of mouth to get the next. By the way, I'm still doing my "day job".

    Renita, as others have pointed out, you should get several years experience (strongly urge >> 5) working for a CRO or similar to learn as much as you can about your target industry. This will also allow you to make connections with decision makers at the clients. They may not be able to send you business when the time comes, but they'll know people at other companies that could benefit from your services. If you haven't yet, learn how to program. Learn basic business practices. Learn basic accounting, but find and use a CPA for local, state and federal taxes and such. When you do go out on your own, incorporate for your protection. Get professional liability insurance. Find a business attorney you can be comfortable with. You may never need to make use of a lawyer, but if trouble happens you'll be glad (s)he's there. All this is meant to tell you that working as a statistical consultant involves much more than statistics.

    Nestor


    ------Original Message------

    Renita, I wish you the best!  I have had success thinking of myself as an entrepreneur and business owner first, and statistician second.  There are tons of free resources out there for female entrepreneurs - take advantage of them, find a free business boot camp, really dive in and learn the business side of what you want to do.  Be prepared to do a ton of networking and marketing.  The trade-off is doing what you love and having an amazing boss. - Melissa 

    ------------------------------
    Melissa Kovacs
    Principal / Founder
    FirstEval, LLC
    ------------------------------


  • 21.  RE: The Business of Statistical Consulting

    Posted 10-26-2016 11:04

    At the risk of doing a "me, three," I echo the comments of Susan, Mark, and others who recommend working for an organization for a little first. To the experience and relationships gained, I would also add that but there is so much learning that happens after you get out, particularly in the first few years. If you ask me, I would hate for you to miss out on that experience. Some of this learning is statistical, but by and large it is about how things work in real life. You don't have to be working in a large group of statisticians for this to happen--in fact, you could be the "token" statistician for a small organization, but you WILL learn, both good and bad. This initial learning is just difficult/slower to come by when you're independent right out of school and getting started, although not impossible. As others have said, statistics is the easy part--it's everything else of running the business, doing business development, etc., that is really needed to be successful.

    You can always be independent later, but you do want to be learning as early as possible--getting learning under your belt will help you get there faster.

    For the business side of things, I generally tend to recommend giving Alan Weiss' "Getting Started in Consulting" book a read for anyone serious about going independent (although it depends on your area of application and target clientele). While you don't necessarily have to have all of the pieces in place, it is important that each piece has been thought through so that you have better chance of success (or worse, so that you don't fall into any traps).

    ------------------------------
    Michiko Wolcott
    Principal Consultant
    Msight Analytics



  • 22.  RE: The Business of Statistical Consulting

    Posted 10-26-2016 11:40

    I'm not sure that I necessarily agree with those who argue that experience with other consulting firms is all that necessary. Five or more years at an established firm might yield too much comfort and financial security to embark on the inherently risky proposition of starting your own business.  Just out of school, and depending of course on the debt load that you're carrying, might be the easiest time to incur that risk.

    More experience can help, primarily in terms of (1) exposure to potential future clients, (2) exposure to the marketing and sales models used by the firm that has hired you, (3) exposure to the models and analytical approaches used to address different questions, (4) how to report those results in terms that are well-received by business decision-makers, and (5) most important, how to position yourself as a person/consultant who adds value to the client.  

    I suspect that if you have the entrepreneurial drive and recognize the importance of meeting your clients' needs (item 5 above) that you will be able to overcome some of the other advantages that working for an established firm might provide.

    Others have mentioned, and I will reinforce, establishing a relationship with an good accountant and attorney, keeping your business expenses and revenue clearly separated from your personal expenses, and other business tasks.  Set aside a fixed time every week to balance the books and write invoices, and do not fall into the trap of "I'll do that later. I'd rather do ..." that will ultimately lead to a financial mess.  Make sure you pay your Federal and State withholding.  More businesses have failed because they use deferred payroll taxes as the equivalent of a loan, and then they get slammed by Uncles Sam.  (Your accountant should make sure you do not fall into this trap.)

    Best of luck to you.  I've been doing this for over 30 years now, and it was one of the best decisions of my life.

    ------------------------------
    David Mangen



  • 23.  RE: The Business of Statistical Consulting

    Posted 10-26-2016 16:34

    David,

    I don't tend to agree with you.  Generally a consultant, whether it is in Statistics or Computing or other fields, is someone who is experienced.  Typically a consultant is brought in because he/she has specific experience in a particular area.  The consultant, especially an independent, is brought in because of their experience.  Established consulting firms will hire new grads to more low level detailed work, typically under the direction of an experienced consultant.  So, I do agree that one who is just getting out of school with should get some experience, either with a consulting firm or with a company that has a statistical group.  The choice of such a firm should reflect what the aspiring consultant wants to when he/she does decide to go out on their own.


    As for your suggestion that one get their brand out by participating in various forums where they can get show what they know and are capable of is a good thing.  I see lots of business that way as well.  


    LOUIS W. GIOKAS

    Student

    M. S. in Applied Statistics

    DePaul University

    Chicago, IL 60614

    Phone: +1-630-596-6019



    ------Original Message------

    I'm not sure that I necessarily agree with those who argue that experience with other consulting firms is all that necessary. Five or more years at an established firm might yield too much comfort and financial security to embark on the inherently risky proposition of starting your own business.  Just out of school, and depending of course on the debt load that you're carrying, might be the easiest time to incur that risk.

    More experience can help, primarily in terms of (1) exposure to potential future clients, (2) exposure to the marketing and sales models used by the firm that has hired you, (3) exposure to the models and analytical approaches used to address different questions, (4) how to report those results in terms that are well-received by business decision-makers, and (5) most important, how to position yourself as a person/consultant who adds value to the client.  

    I suspect that if you have the entrepreneurial drive and recognize the importance of meeting your clients' needs (item 5 above) that you will be able to overcome some of the other advantages that working for an established firm might provide.

    Others have mentioned, and I will reinforce, establishing a relationship with an good accountant and attorney, keeping your business expenses and revenue clearly separated from your personal expenses, and other business tasks.  Set aside a fixed time every week to balance the books and write invoices, and do not fall into the trap of "I'll do that later. I'd rather do ..." that will ultimately lead to a financial mess.  Make sure you pay your Federal and State withholding.  More businesses have failed because they use deferred payroll taxes as the equivalent of a loan, and then they get slammed by Uncles Sam.  (Your accountant should make sure you do not fall into this trap.)

    Best of luck to you.  I've been doing this for over 30 years now, and it was one of the best decisions of my life.

    ------------------------------
    David Mangen
    ------------------------------


  • 24.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 09:57

    Renita - you have gotten excellent feedback from a lot of professional consultants.  I will add my own observations with the caveat that I have never worked independently but rather within a large pharma and now at a university research institute.  

    In order to be a successful independent statistical consultant,  you should join a small independent consultant group after finishing school.  As others have pointed out, you first need to gain technical experience.  Joining a small group will allow you to see the entire range of operations that these groups deal with,  advertising, bidding, scheduling, finances in addition to a wide range of projects. In a large CRO or company, you will likely never see those things but rather, you will spend your time focused on the projects you are assigned. Over time, you will gain valuable experience in a large CRO or company,  but it will take many years.  Joining a small independent statistical group is risky financially but will immerse you in the world you want to be in immediately.   It also allows you to decide earlier if being an independent statistical consultant is really want you want to do.   Good luck!  

    ------------------------------
    Roy Tamura
    Associate Professor
    University of South Florida



  • 25.  RE: The Business of Statistical Consulting

    Posted 10-27-2016 14:28
    Thanks everyone for the incredible support and insights.  Your responses are definitely valued as I chart a path forward.

    As A little background, I earned a MBA back in 2009 and I started my career at a huge technology and management consulting firm.  Over the years, I have held various reporting positions on business operations and strategy teams. I learned some data mining skills and eventually moved into a customer analytics function.

    I decided to pursue the MS stat






    ------Original Message------

    Renita - you have gotten excellent feedback from a lot of professional consultants.  I will add my own observations with the caveat that I have never worked independently but rather within a large pharma and now at a university research institute.  

    In order to be a successful independent statistical consultant,  you should join a small independent consultant group after finishing school.  As others have pointed out, you first need to gain technical experience.  Joining a small group will allow you to see the entire range of operations that these groups deal with,  advertising, bidding, scheduling, finances in addition to a wide range of projects. In a large CRO or company, you will likely never see those things but rather, you will spend your time focused on the projects you are assigned. Over time, you will gain valuable experience in a large CRO or company,  but it will take many years.  Joining a small independent statistical group is risky financially but will immerse you in the world you want to be in immediately.   It also allows you to decide earlier if being an independent statistical consultant is really want you want to do.   Good luck!  

    ------------------------------
    Roy Tamura
    Associate Professor
    University of South Florida
    ------------------------------


  • 26.  RE: The Business of Statistical Consulting

    Posted 10-30-2016 14:38
    Hello Renita:

    The most difficult aspect of running my consulting service is finding clients and communicating my value to the extent that I win the contract. (To those who struggle with invoicing:  consider using PayPal.  The fees seem a bit high, but I find the mid-year and year-end reports very useful for tax planning and tax reporting, respectively.)

    Trying to return to the workforce as an employee if consulting isn't working has been the most challenging experience I've ever had in my career. I've spoken to a dozen recruiters and HR professionals in California, I'm told that the word, Consultant, is code word for unemployed.  I've had to develop a new resume with "job titles" and accounts for gaps between titles (HR knows that skills-based resumes are used to hide periods of unemployment).  During job interviews I have to explain, excessively and fervently, why I want to work at all, why I want to drive 50 miles to that job, why I'm switching from consulting to employment, etc.  Hiring managers have actually asked "Why do you want to work?" (not "Why do you want to work here?")     or "You do know this job is 40 hours a week?"  Given that I have no time gaps in my resume and 20+ publications, I suspect that those hiring managers had some underlying, erroneous beliefs about the work ethic/habits of consultants. 

    If your department offers a statistical consulting lab, I encourage you to volunteer or take it for course credit; you'll get to advise faculty and staff researchers from various departments on campus.  You'll gain experience and professional visibility.  I secured three campus contracts (for pay) as a result of participating in my department's consulting laboratory for two quarters of credit.

    Good luck to you!

    MJ-

    The best way to reach me is via email: MostlyMath@aol.com
     
    Monica Johnston, M.S.
    Statistician & Instructor

    I am currently pursuing  graduate degree in statistics at Georgia Tech. After I graduate, I want to work as an independent statistical consultant.

    For those of you running your own consulting practice, what is the most difficult part of running the business and/or working with clients?


    ------Original Message------

    I am currently pursuing  graduate degree in statistics at Georgia Tech. After I graduate, I want to work as an independent statistical consultant.

    For those of you running your own consulting practice, what is the most difficult part of running the business and/or working with clients?






  • 27.  RE: The Business of Statistical Consulting

    Posted 10-31-2016 00:58
    All,

    RE: From Monica:     (To those who struggle with invoicing:  consider using PayPal.  The fees seem a bit high, but I find the mid-year and year-end reports very useful for tax planning and tax reporting, respectively.)
    RESP: This is an interesting idea.  I know of one other person using PayPal.  I am happy to share another approach. 
    I too find tax accounting to be less than glamorous.  I use two bank accounts; one for 'in' and one for 'out.'  I purchase with a business card attached to the 'out' account and only keep receipts for the most significant of these transactions or those on their way to a client.  At the end of the year, I output the transactions into a spreadsheet, sort, and sum.  When sorting, remember that you can deduct more for some transactions when they occur far from home, like food.  Also, remember that your client remunerated you for some of these. 

    There are always expenses that did not make it onto your card (or a client's card).  For these, the tax-deductible receipts end up in a metal can via a retentive storage process beginning (at point of sale) with either a computer-case pocket or a billfold pocket.  Receipts can take up space and you will get no points for creativity, so I just go through robotic habits.  Receipts going to a client are stored in a small plastic case and usually get taped onto scratch paper and scanned into the computer (a common theme).  At tax time, I use these against my transactions spreadsheet mentioned above.  Receipts are money. 
     
    The 'in' account is for getting paid electronically.  I give this account number to clients overseas so I keep the balance to a minimum.  My understanding is that businesses are not afforded the same regulatory protections as individuals.  I change this account number periodically or when I finish doing business with an overseas client.  If I have to pay someone overseas, I wire it (probably from the 'in' account) in their currency (not US dollars).  This costs $10. 

    Eventually, my bank will hassle me about something, then I change banks.  I have built models and strategies for some of the biggest banks; I avoid being the customer of the biggest banks.  I favor credit unions whenever practicable. 

    See how fun and simple this is! 

    Randy Bartlett
    LinkedIn Group: About Data Analysis
    Website: http://www.BlueSigmaAnalytics.com
    Analytics Magazine:     http://goo.gl/Wod3gk , http://goo.gl/rZ7ys
    Datafloq Blog: https://goo.gl/8u31Ok
    Please visit the book and 'agree' to the reviews if they are helpful at:     http://amzn.to/YGhXzv 


    ------Original Message------

    Hello Renita:

    The most difficult aspect of running my consulting service is finding clients and communicating my value to the extent that I win the contract. (To those who struggle with invoicing:  consider using PayPal.  The fees seem a bit high, but I find the mid-year and year-end reports very useful for tax planning and tax reporting, respectively.)

    Trying to return to the workforce as an employee if consulting isn't working has been the most challenging experience I've ever had in my career. I've spoken to a dozen recruiters and HR professionals in California, I'm told that the word, Consultant, is code word for unemployed.  I've had to develop a new resume with "job titles" and accounts for gaps between titles (HR knows that skills-based resumes are used to hide periods of unemployment).  During job interviews I have to explain, excessively and fervently, why I want to work at all, why I want to drive 50 miles to that job, why I'm switching from consulting to employment, etc.  Hiring managers have actually asked "Why do you want to work?" (not "Why do you want to work here?")     or "You do know this job is 40 hours a week?"  Given that I have no time gaps in my resume and 20+ publications, I suspect that those hiring managers had some underlying, erroneous beliefs about the work ethic/habits of consultants. 

    If your department offers a statistical consulting lab, I encourage you to volunteer or take it for course credit; you'll get to advise faculty and staff researchers from various departments on campus.  You'll gain experience and professional visibility.  I secured three campus contracts (for pay) as a result of participating in my department's consulting laboratory for two quarters of credit.

    Good luck to you!

    MJ-

    The best way to reach me is via email: MostlyMath@aol.com
     
    Monica Johnston, M.S.
    Statistician & Instructor

    I am currently pursuing  graduate degree in statistics at Georgia Tech. After I graduate, I want to work as an independent statistical consultant.

    For those of you running your own consulting practice, what is the most difficult part of running the business and/or working with clients?




  • 28.  RE: The Business of Statistical Consulting

    Posted 10-31-2016 09:41

    FWIW... I use Wave for invoicing (free) and Concur for expenses. If you travel a good bit, Concur is the best $8/month you can spend IMO (I also tend to have a substantial amount of billable cash expenses that cannot always go on a credit card).

    ------------------------------
    Michiko Wolcott
    Principal Consultant
    Msight Analytics

    Original Message


  • 29.  RE: The Business of Statistical Consulting

    Posted 10-31-2016 09:49

    Try TimeSlips. I have been using it for decades.

     

    Dr. Nelson R. Lipshutz

    President

    Regulatory Research Corp.

    24 Radcliff Road

    Waban, MA 02468-2222

    Voice: 617-964-6940

    Cell: 617-834-2895

    Fax: 617-964-0426

    nlipshutz@regulatoryresearch.com

    www.regulatoryresearch.com

     



    ------Original Message------

    FWIW... I use Wave for invoicing (free) and Concur for expenses. If you travel a good bit, Concur is the best $8/month you can spend IMO (I also tend to have a substantial amount of billable cash expenses that cannot always go on a credit card).

    ------------------------------
    Michiko Wolcott
    Principal Consultant
    Msight Analytics
    ------------------------------


  • 30.  RE: The Business of Statistical Consulting

    Posted 11-02-2016 15:06

    Agreed. Been using Timeslips for decades as well! Yikes, decades....  It works well and now allow me to e-mail PDF invoices to clients/sponsors.   Has been pretty reliable.  Has many features, many of which I haven't used but I'm sure are useful.  Just yesterday I finally decided to try to figure out how to import staff timeslips sent to me via Excel directly into Timeslips which saved me entering 120 individual entries.   For our business, Timeslips is mission critical.

     

    *******************************************

    Greg Maislin

    Principal Biostatistician,

    Biomedical Statistical Consulting

    Voice: 610.645.5708, Fax: 484.534.8570

    E-mail:  gregmaislin@biomedstat.com

    Web:  www.biomedstat.com

     

    Adjunct Professor of Statistics in Medicine

    Perelman School of Medicine

    University of Pennsylvania

    fgm@mail.med.upenn.edu

    Google Scholar:

    http://scholar.google.com/citations?user=Ou8jTVMAAAAJ&hl=en

    ********************************************

     



    ------Original Message------

    Try TimeSlips. I have been using it for decades.

     

    Dr. Nelson R. Lipshutz

    President

    Regulatory Research Corp.

    24 Radcliff Road

    Waban, MA 02468-2222

    Voice: 617-964-6940

    Cell: 617-834-2895

    Fax: 617-964-0426

    nlipshutz@regulatoryresearch.com

    www.regulatoryresearch.com