Become an employer?

[Cheshire Cat]

How many, if any, people on this forum have thought about growing from a one-man company to employing one or more additional people? I think the vast majority of people on here are IT contractors of one type or another, and I wonder how straight-forward it is to run a geniune "consultancy" (for want of a better word) where you are director and you employ someone full time, and you find work for that other person, invoice the client, pay a salary etc.
Does this line of work lend itself well to this model of business, or have the "big" consultancies got that sewn up? has anyone tried it, or are you pretty much settled with the idea of always being a one-man-show?
Not sure how feasible/rewarding it would be, but there seems to be very few people who do this on a small scale.

[Spacecadet]

i've thought about it... need to have at least 12 months work lined up with enough for myself plus one "junior"

[DimPrawn]

It is possible and I worked with a bloke named Simon who setup a small consultancy (after being a 1 person consultancy/contractor for a number of years) employing about 10 permie developers in a niche technology area.

It's a lot of hard work, but it has made him a lot of money.

[PAH]

Doesn't appeal due to all the hassle with employement law, tax etc. Plus the day you have to tell them they're out of a job because you couldn't make it a success.

Why employ, why not sub-contract?

[TheFaQQer]

i've thought about it... need to have at least 12 months work lined up with enough for myself plus one "junior"

WHS - two friends and I considered setting up together. Had all sorts of questions about how it would all hang together, how to take on direct work rather than using EBs etc. etc. and in the end gave up on the idea. It's still there are a Plan B (sort of) vague idea though...

It is possible and I worked with a bloke named Simon who setup a small consultancy (after being a 1 person consultancy/contractor for a number of years) employing about 10 permie developers in a niche technology area.

It's a lot of hard work, but it has made him a lot of money.

WHS - two guys I know who were made redundant from Oracle setup together in a niche market. Small consultancy, now has a good reputation, employs a number of people (plus contractors), and I think they even do a small umbrella service as well if their contractors need it. Hard work, but shedloads of cash for it if it works.

[PAH]

It is possible and I worked with a bloke named Simon who setup a small consultancy (after being a 1 person consultancy/contractor for a number of years) employing about 10 permie developers in a niche technology area.

It's a lot of hard work, but it has made him a lot of money.

I think having a niche is the key. If you've got experience and can sell it enough to generate more demand than you can handle then it could work.

[Sockpuppet]

The problem with small companies is that they are so heavily relaint on the people they have working for them. They need better than average people - which is offset by that person not being a number and actually likes working for them.

With IT there are no real barriers to entry. A lot of the small haulage firms that I work with the drivers don't have the £125k+ needed for a lorry or the operators licence, working capital for 90 days running costs etc so they have to work for a haulier.

With IT 99% of consultants could do the job direct so why would they work through someone else if they can just go direct?

[DimPrawn]

I think having a niche is the key. If you've got experience and can sell it enough to generate more demand than you can handle then it could work.

He had a niche and a software product too. Sales of the product, plus support and customisation make up the bulk of his profits, but they do bespoke work too.

Secret is to pay your permies a pittance and brain-wash them into thinking they are worthless.

[Bear]

I've seriously thought about it. Done costing models etc

2 difficulties i came across:

1. Getting the work in. Most of the work I get is based on me doing it - that's why i'm contacted. I would need to persuade client that other person is good. Possible but would probably mean doubling up for a while on each project therefore halving income.

2. How long would employee stick around knowing what money they could earn as a contractor. Probably OK to hire grads but expect a high staff turnover.

[DimPrawn]

I've seriously thought about it. Done costing models etc

2 difficulties i came across:

1. Getting the work in. Most of the work I get is based on me doing it - that's why i'm contacted. I would need to persuade client that other person is good. Possible but would probably mean doubling up for a while on each project therefore halving income.

2. How long would employee stick around knowing what money they could earn as a contractor. Probably OK to hire grads but expect a high staff turnover.

Employ steady-eddie types with a young family who live locally and they are not interested in IT contracting.