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Contractor vs. Consultant

Contractor vs. Consultant

Consultant, Contractor... is there a difference?  Sometimes there isn't, sometimes the same person can be both, even on the same engagement.  However, I  define the difference this way:

  • Consultant: An expert in a topic.  Some sought after for his/her knowledge.  A trusted adviser.  Someone you can trust to get things done on time and under budget.  Ideally associated with high hourly rate (only needed for his/her knowledge) or a lower risk retainer.
  • Contractor: A technical resource.  Someone you hire to perform a certain task, but you define most of what the outcome will be.  Normally paid by the hour (or day/week/month), and thought to be easily replaceable and interchangeable with a similar one from a different provider.  Some companies replace some of the tasks they could have done with permanent employees with a temporary one that could easily be fired, even if more expensive in the short term.

No problem or shame on being either one.

Contractor Consultant
Pro:
  • Lower level of responsibility.  Flexibility to finish an engagement as soon as they stop paying more hours.
  • The job market markets your services.  They set your rates and the level of need (demand) for your services.  You just need to put a sign of "Joe The Plumber" or "Joe The Programmer" and people will call you.
Pro:
  • People request you by your name.  Once you reach that level, competition is less relevant.
  • You may help define the state of the art of your industry.
  • Normally you can handle more than one engagement at a time.  (More networking if done right)
  • You may be able to charge higher fees.
Cons:
  • You will be paid at market rates, and people will comparison shop.
  • Normally you handle only one engagements at a time.
  • You may be seen as a replaceable/interchangeable resource.
Cons:
  • You retain some of the project "ownership" (read: responsibility for it to be successful).
  • It is difficult to understand why pay for your services. (Justify rates with the Rate of Return).
  • You need to market your services.

 





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John Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website

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Jose Anes
(Visit Jose's Website) Independent Computer consultant who has gained financial independence through good saving and investing practices.

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