Every scenario is going to be different, I took the plunge as a software consultant and can provide some datapoints.
I was laid off from my job as a software engineer about 5 years ago. I had previously worked in software consulting and knew the operating model and had a handful of potential clients. I had some savings and my wife works full time so I decided to give it a go for 6 months to see how it would go. I partnered with a colleague who was also laid off and had same appetite for risk as I did.
* The first year was a grind, especially doing the non-technical tasks like networking/business development/invoicing/etc.
* We ended up being profitable on year 1, I made less than my previous gig as a lead engineer. We grew from 2 of us to having 1 FTE and 3-4 dev contractors in year 1.
* Keep in touch with engineers you liked working with, hiring is WAY harder than I expected. If you decide to grow, you will need a team for larger contracts.
* Business development is largely a numbers game, you have to get out of your comfort zone and talk to a lot of people/companies and get on their radar.
* One of our first non-technical hires was business development. We did this when we hit $1mm/yr rev.
* Being in a niche can be helpful if you are able to explain your value prop AND to differentiate yourself.
* Don't view other consulting firms as competition. We've formed some great relationships with other companies that align with our engineering process and refer work when we have too much and get work when they have too much.
Over the last 5 years we grew from 2 "founders" (along with some former colleagues as contractors) to about ~40 employees (80% FTE's/20% contractors) all remote, US based. In hindsight, I think my favorite size was when we were ~8 people. It was big enough to take on 1-2 large-ish contracts, but less stress in keeping pipeline full. The risk tolerance for having a 6 figure payroll every 2 weeks is not for everyone!
I was laid off from my job as a software engineer about 5 years ago. I had previously worked in software consulting and knew the operating model and had a handful of potential clients. I had some savings and my wife works full time so I decided to give it a go for 6 months to see how it would go. I partnered with a colleague who was also laid off and had same appetite for risk as I did.
Over the last 5 years we grew from 2 "founders" (along with some former colleagues as contractors) to about ~40 employees (80% FTE's/20% contractors) all remote, US based. In hindsight, I think my favorite size was when we were ~8 people. It was big enough to take on 1-2 large-ish contracts, but less stress in keeping pipeline full. The risk tolerance for having a 6 figure payroll every 2 weeks is not for everyone!(edit formatting)