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Interested In Being A Consultant?

 
By Daniel Lamaute

Interested In Being A Consultant?
Here Are 5 Key Steps To Consider.

Copyright 2003, Daniel Lamaute

If you're thinking about hanging up your shingle as a consultant, you probably already have most of what you'll need. Odds are, you know the business, you have the skills and experience, you know or have the certifications you'll need, and you may have a good idea of where your first clients will come from. The following steps can help you start on the right track:

1. Prepare a personal inventory
You want to be sure you have the basic skills any independent contractor needs, no matter what the business. For example, you will need to:
  • organize an office,
  • handle records and finance,
  • manage your own time,
  • promote your services, and
  • negotiate contracts.

Don't be reluctant to hire experts to help with some of these tasks, and when appropriate barter your expertise for theirs.

2. Write a Business Plan
As soon as possible after you've decided on your consulting path, you should put together a business plan: write down where you want to go and how you want to get there.

  • You business plan should spell out:
  • What services do you plan to sell?
  • Who do you think will buy your services, how big your market is, how much income you expect to make, and when?
  • What resources you'll need to do this (money, equipment, extra help)?
  • What personal qualifications do you and anyone working for you has so that you can meet the above challenges?


3. Organize your Business
Once you are ready to get started, you'll need to decide how to structure your business. Will you run things simply as sole proprietorship, a partnership, or a corporation? Consult with a business attorney or your accountant to help guide you in selecting a structure that fits your circumstances.

Generally, if you operate as a sole proprietor and have no employees, you can use your social security number as your Tax ID. Corporations and firms with employees need an Employer Identification Number (EIN) from the IRS. You may get one online from:
http://www.irs.gov/businesses/small/index.html

Don't mess with the IRS. They are the one creditor you don't want to have. As a self employed business you'll be required to pay social security tax (FICA) in addition to regular income tax. In 2003, your first $87,000 of income is subject to FICA. For 2004, that figure jumps to $87,900.

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