The Consulting Economist in 2005 Particular Issues affecting the Freelancer and Small Firm

Introduction Many issues affect consultants and consultancies regardless of size Effects on freelancers (individuals) and small firms likely to be more marked than for large firms

Freelancers: some of the challenges (1) Relationship with the client (government, IFI) – often as sub-contractor, not direct Finding and securing work – personal contacts are vital, database is not enough Limited role (unpaid?) in working up proposals

Freelancers: some of the challenges (2) Limited say in team makeup - risk as team leader if team members unsuitable Seasonal factors or political disruptions to work flow (elections, wars, EC in July …) Exclusivity and availability – risk of double-booking or missing opportunities

Freelancers: some of the challenges (3) Limited “clout” of individual with client (e.g. if client refuses to accept report) Balance between medium/long term assignments and short term (income flow versus getting “out of the loop” …)

Freelancers: some of the rewards (1) Framework contracts – opportunities for varied short term assignments provided available at short notice and known to Framework contractors Independence - ability to say “no”, no office politics, freedom to take on second job …

Freelancers: some of the rewards (2) Fees and revenue – daily rates exceed salaries (even taking account of NI, pension, etc.)

Small Firms: challenges Access to smaller contracts – many now under Framework contracts Cost of preparing prequalifications and bids Minimum capital required to be eligible to bid

Some common issues Downward pressure and competition on fee rates Cash flow – especially for sub-contractors

Conclusions Freelancers have a continuing role, but constant marketing and professional effort to stay in the field Small firms – evolving role as specialist sub-contractors or niche experts