Statistical Consulting with R Programming

From private industry to private consulting – using the skills you already have to build your own business.

Whether it’s for a side hustle or a way to be fully in control of your schedule, the ability to start your own consulting company is something anyone can get behind. If you’ve been working with R programming and data, you can start your own statistical consulting company.

What It Is and How I Started My LLC

The world of business is changing, with countless employees moving to a remote setting, employers are evaluating the most intelligent way to move forward. Enter in consultants, these are people with highly specialized skills that may or may not be needed in a daily role within a company. So what exactly does a statistical consultant provide for businesses? All statistical analytics boil down to the ability to take a whole lot of data, be it numbers or words, and find the story that it is telling.

Now, many companies have full time data scientists or statistical analysts employed full time. However, depending on the size of the company and their data needs, a full-time position might not be sensible for them at this time. This is where consultants find their niche. I’m here to give you some insight into how to become a statistical consultant.

At this point, consulting is something I do in addition to my full-time job working as a secondary mathematics teacher, staff mentor, and go to person for all things data. I enjoy the inherent flexibility in consulting, taking the jobs I find interesting and meaningful, and honestly if I could commit more time to it then its something I could transition to full-time. First piece of advice, anybody who provides “guidance” when it comes to numbers and money is in a situation of liability. This means that should an occasion arise where decisions are made based on your “advice” and it doesn’t go as planned then you are liable to be sued. By creating an LLC or other business entity you help to separate the personal “you” and all the assets “you” have from the business you’ll be creating. The process varies a bit state by state, I live in Illinois and from start to finish it took me a few hours to get everything submitted. I recommend for anyone looking to get into consulting to do this since the investment in an LLC or similar business entity creation isn’t terrible and it helps protect your personal life.

Marketable R Skills

Okay so off the top of my head here’s a noncomprehensive list of the various fields within the broader scope of data science and statistical consulting that I currently work with:

  • Data Cleaning
  • Data Augmentation
  • Data Analysis
  • Visualization
  • NLP
  • Cloud Architecture
  • Predictive Analytics
  • Machine Learning
  • Psychometrics

Now, depending on your experience with R programming, many of these above topics and statistical techniques should be familiar to you. The key here is when you’re getting started you need to be very honest with yourself with what statistical analysis skills you feel comfortable with. We’ve all been in a standard interview where we perhaps glorify our current skills just a bit, knowing that if we get hired there will be training, and you can learn as you go. If you have some experience with statistical software and the ability to work in a team, you’d be good to go.

Consulting is very different in this sense, there is no training or time to learn on site. If you’re being hired as a statistical consultant your client is expecting you to seamlessly execute the project as they requested, and you agreed to. Hiccups may occur along the way, but you should not take on a contract for work you have never done before.

You don’t need a degree in statistics, but having practical experience with different statistical methods and statistical programming will help you be prepared for those freelance consulting gigs and job alerts.

Client Acquisition on Upwork and Others

Okay so you’ve got the skills you need and a licensed business to protect your assets, now comes the challenging part – getting clients! Now, if you’ve been working in a data driven field for some time, chances are you can use word of mouth and your current connections to your advantage. However, have no fear, even if you’re someone like me who works in a field with essentially no “private industry” connections, there’s ways to get your business out there. There are many sites that offer you the ability to both create a portfolio as well as connect with potential clients. The two I’m going to focus on are the ones where I’ve had the most success, LinkedIn and Upwork.

LinkedIn is your base of operations for ensuring your credentials are clearly listed out, and a place to start show casing projects you’ve completed. It also works as a learning opportunity for you to connect with others in the fields of statistics and data science. It also adds in credibility when a potential client can find some background on you, since designing a website for your business is likely low on your priority list when first getting started. While LinkedIn is great for making connections, posting projects, and researching what others in the field are doing it isn’t necessarily designed for freelancing and consulting work. This is where, in my experience, Upwork (there are other sites as well like Fiverr and Freelancer) gave me a chance to start getting paid work. If you haven’t check it out yet Upwork and others like it are sites that allow for freelancers or consultants to create a profile and bid on projects that companies or individuals post. There is a ton of work on there in almost any field you can think of, and a vast amount in the fields of statistics and data science.

The Elevator Pitch & Portfolio

When bidding on projects, upon submission the potential client will see your cover letter and any additional documents you attach. Sometimes clients include additional questions specific to the project, but this is optional on their end. This is the most challenging aspect of beginning your work as consultant, you need to have your pitch convey a message that you are the ideal candidate, without asking them to read your life story. I tend to think of every attempt at new client acquisition like the classic case of an “elevator pitch.” The great part about Upwork is there is a ton of work posted there, the challenging part is that there is also a ton of people bidding on jobs. Thus, when preparing your proposals you’ll want to focus on specificity with efficiency. In a perfect world, you’d have the chance to spend hours preparing and putting together each pitch. However, if you’re like me and still working in another career, you need to establish an efficient system – a template if you will. I have a general outline I use, three paragraphs, as my cover letter when submitting a proposal or responding to an invitation to interview.

The general format is as follows:

Paragraph One: Introduce yourself, list out some specifics of the project description so its clear that you’ve read the posting in detail and can speak to it.

Paragraph Two: Here you provide a condensed version of your work experience and qualifications, remember it’s not your life story. The skills and experience you highlight here should tie directly into the work related to the project.

Paragraph Three: If you’re attaching any work samples or a resume, mention that here. Inform the potential client that you’d be happy to further elaborate on your qualifications through a phone interview.

Now, assuming the client liked what you had to say in your cover letter pitch, the next thing they’ll be looking at are your attachments. The first thing you’ll want to include is your up to date resume. Make sure this resume high lights the skills, credentials, and certifications you have related to the field you are consulting in. In addition to your resume, you’ll want to include some form of work samples or portfolio.

When I first started, I had pulled together about 100 pages in a PDF file showing all of the projects I completed in a variety of topics. After a few weeks went by and I found myself struggling to get clients, I tried thinking about it from their perspective. Some of the jobs I sent proposals in for had upwards of 50 other proposals, chances are they seen a 100-page document and avoided the download all together. This is when I realized quality and specificity would serve me much better than quantity. I broke this massive file down into smaller skill sets, such as visualization, data manipulation, and machine learning. This allowed me to customize my proposals with much more specificity with respect to the job the client posted. This way when referencing these work sample in my pitch, I didn’t have to reference page 87 paragraph 6, but rather could say see the attached file of “outlier detection.”

Setting Proposal Rates

Job postings on Upwork fall into one of two broad categories, fixed price projects and hourly rates. Let’s start with fixed price projects. My first word of caution is that when submitting a proposal for a fixed price project you want to be sure you ask for as much clarification as you need in order to fully understand the goals of the work. I remember one of my first projects was contracted like this, and what I predicted to take 5 hours ended up taking around 20, needless to say my “hourly” rate for that project was much lower than I had planned on it being. On the other hand, I’ve done fixed price contracts that went smoothly or even faster than I expected which sort of balanced things out. Also, even with a fixed price project you still have the option to over or under bid. This is a great way of getting work quickly before you’ve completed many projects on Upwork, being willing to bid $100 under the advertised rate helps your proposal stand out. With hourly rates, clients may advertise what they are willing to pay or leave it totally open ended. Getting “good” at estimating hourly rates boils down to research. There’s no one size fits all hat but once you’ve read through enough job postings and viewed the profiles of people offering similar services, you’ll have a rough idea. Sadly, when your first start your journey into consulting you’ll likely have an hourly rate that’s much lower than you deserve but its part of the consulting field. In order to justify a higher hourly rate, you need to build up your work samples and have strong client feedback. The more work you have to showcase, the better your odds are at landing higher hourly rates.

Upping Your Base Rate

Within a month of starting my business, my first two consulting contracts that I signed were for $30 an hour. One was working with medical billing visualizations and the other was for reading over an education thesis. Soon thereafter I worked on some fixed price projects, one averaged out to about $50 an hour while a few were around $20 an hour. However, each time I completed a project my profile looked a bit more impressive. Within a year of starting my company I now offer a base rate between $50-$60 an hour. Now, when thinking about hourly rates there are a few variables to consider. The first is how intellectually taxing is the work that you’re completing for this person, if you’re doing some basic visualizations on already clean data, chances are that you might not have an hourly rate as high as you’d like. However, if the work involves creating a customized script to clean the data before you can even analyze it, chances are this increases that hourly since now it pulls in another unique skill set.

The second is who the client is, as I mentioned before I do still teach, and thus postings related to the field of education or graduate work are very interesting to me. I bid on these projects knowing that these clients are likely to have a much smaller budget than a company. That’s not to say that advising on a dissertation is necessarily easy, but it can be rewarding work that also helps build on your profile with a strong client review.

The third relates to your short- and long-term goals of consulting. I recommend beginning this journey with an eye towards “additional income” as opposed to all of your income. When you are bidding on jobs I suggest setting regular intervals throughout your day when you look for ones you would be well suited for. Also, try and avoid bidding on jobs with more than 10 proposals listed, at that point there’s a chance yours might never even get looked at. If you get your proposal in within a few hours of a job being posted there’s a better chance, you’ll be contacted back.

Direct LLC Contracts and Repeat Clients

First, let me be clear, I 100% do not recommend taking an Upwork client off site and contracting them directly. This might be tempting, since Upwork does take a percentage fee on all transactions, but its also strictly prohibited in their platform agreements. My rule of thumb is to keep my Upwork clients on Upwork, bite the bullet on the transaction fee, and enjoy the perks of their payment protection and ensuring I get paid for the work agreed upon. The site is great for this, as I’ve never had a client skip out on payment for services delivered.

Now, it is true that working with direct contracts to LLC has its benefits. For example, you can offer a slightly lower rate since there’s no transactional fee when contracting directly. Also, there’s a good chance if a client is willing to contract you directly through your LLC that the position isn’t a one-time project. When it comes to direct contracts be sure you read through everything thoroughly. There have been several occasions when I had to turn down a high hourly contract because of clauses related to “non-competition.” This is something to be aware of when contracting directly since so much of statistical consulting can overlap from one business to another. Also, if you ever plan on using work from a client as a work sample on Upwork, be sure you redact anything needed and get your clients approval.

This article was contributed by John Ciolkosz, of C Solutions LLC

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