Building a PSC from Scratch Building a PSC from Scratch
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  1. #1

    Fingers like lightning


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    Default Building a PSC from Scratch

    Hi all, long time no post. I've actually had some project work to be getting on with; whew.

    Obviously we are all aware of the pending reforms to IR35 and I don't know about everyone else, but my end client (FTSE-100) are simply following the banks. They've set a really crap precedent for everyone else to follow. For those with war chests large enough to ride it out for a year or two until clients start to get sensible about it, good for you. For anyone who doesn't - read on.

    I've come to realise that almost every migration project I have worked on since I became a FTE infra consultant back in 2012 almost always follows the same pattern. It doesn't matter if it's on prem to cloud, cloud to cloud, datacentre to datacentre, etc. The patterns and workflows are all much of a muchness. The key people you need are almost always the same, aside from some skilled engineers in the particular tech you're moving from and to.

    With that in mind, I am considering building a PSC specialising in migration and automation which will encompass everything; Project management, technical migration, comms and managing change at the client. Essentially, the PSC will provide everything clients want and pay (genuinely outside IR35) individuals to do today, but all encompassed under one fee (fixed or otherwise - fine details TBD) invoiced at pre-determined billing stages during the project.

    I realise this represents a much greater risk than some (not all) contractors are willing to take on. But it also presents an opportunity to genuinely remain outside of IR35 and work on projects 100% of the time. My company (the PSC) would engage with a number of contractors to deliver services at an agreed day rate and provide specifications and scopes of work to each contractor, who in turn would need to produce invoices on an agreed basis to the PSC via their own LTD's for the work delivered. Whole job or day rates would be considered.

    My question to the forum is:

    A) Am I crazy?
    B) Will Hector still try and insert the Black Mamba into the rear door of everyone involved anyway?
    C) Is anyone else doing this aside from bigger outfits?
    D) Has anyone done this already?
    E) Is anyone interested in collaborating?
    Last edited by mattfx; 11th November 2019 at 09:59.

  2. #2

    Contractor Among Contractors


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    You missed the most important question:

    A) How are you going to find clients and convince them you are better value for money than established SI/MSPs and JBOC (Just a Bunch Of Contractors)

  3. #3

    Fingers like lightning


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    Quote Originally Posted by sal View Post
    You missed the most important question:

    A) How are you going to find clients and convince them you are better value for money than established SI/MSPs and JBOC (Just a Bunch Of Contractors)
    Good question. I am well aware it's all about value proposition and what value would my PSC bring above any others? Well, in a nutshell... rather than target any and every project like most MSP's do our offering would solely be migration and automation for existing back end infrastructures. The source and target technologies would be flexible to a point, but the service would be sold as a drop in package, where tailored communications, change management, data analysis / reporting and extraction, alongside project management wrapped the technical elements of the service.

    In my experience, existing MSPs do not offer much assistance with comms, data analysis / source cleanup and other such activities; which are key components to a smooth transition.

  4. #4

    Should post faster

    MasterBait's Avatar
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    Default

    With that in mind, I am considering building a PSC specialising in migration and automation which will encompass everything; Project management, technical migration, comms and managing change at the client. Essentially, the PSC will provide everything clients want and pay (genuinely outside IR35) individuals to do today, but all encompassed under one fee (fixed or otherwise - fine details TBD) invoiced at pre-determined billing stages during the project.
    You mean like Deloitte, Cap Gemini, ATOS, Accenture, PWC and tons of smaller consultancies?
    I'm working through one of them and just emailed me that my contract is at risk to be inside IR35 after April 1st
    Слава Україні! Героям слава!

  5. #5

    Should post faster


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    Obviously lots of the big consultancies do this day in day out, so you'll have to be undercutting them fairly significantly I guess. If cost is a wash then your typical programme manager would far rather have a Big Four team to blame when everything goes wrong! Getting traction might be very difficult but I guess it's a good time to try it, as resources are generally available to you in the market given how things are at the moment.

    How are you going to pay the contractors you effectively sub the work out to? Day rates? Even if IR35 doesn't apply to the relationship between your clients and YourCo, it might apply to the relationship between YourCo and the contractors. Although you should be small enough so that you aren't responsible for their status determinations. However bending over backwards to make sure you tick as many boxes (contractual and working-practices) as possible in terms of making your contractors outside IR35 would make you an attractive proposition for contractors.

    Oh, and YourCo won't be a PSC any longer! Not that it matters, but probably best to stop thinking of it as that.

  6. #6

    Fingers like lightning


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    My understanding is if you are using contractors, your end-clients will still need to make the determination for each individual contractor, could be painful for them. If you had permanent resources this would not be an issue

  7. #7

    My post count is Majestic

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    Ahh the plan every contractor comes up with sometime in their career and never pulls it off.

    Oh, and YourCo won't be a PSC any longer! Not that it matters, but probably best to stop thinking of it as that
    This and the fact he is means it won't go any further. OP needs a business head on now and if he hasn't got that it won't even get past the fantasy stage. The work is pretty irrelevant at this stage. It's building a viable proposition, selling it and getting a contract. All that while burning money with no income.
    If that hasn't figured in to his plans by now it never will.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  8. #8

    More time posting than coding


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    If you want to set up a consultancy to do migrations and automations, then do it.

    But don't do it because IR35 is impacting your PSC.

  9. #9

    More time posting than coding

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    Quote Originally Posted by JoJoGabor View Post
    My understanding is if you are using contractors, your end-clients will still need to make the determination for each individual contractor, could be painful for them. If you had permanent resources this would not be an issue
    This to a degree. Obviously if you have a truly B2B relationship that is accepted by HMRC, then you would determine the relationship and you would take the risk of determination and backtaxes if HMRC challenged and won.

  10. #10

    Should post faster


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    Quote Originally Posted by Manic View Post
    This to a degree. Obviously if you have a truly B2B relationship that is accepted by HMRC, then you would determine the relationship and you would take the risk of determination and backtaxes if HMRC challenged and won.
    Except that (for now at least) the small company clause would move this burden onto the subcontractors.

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