Be Brave Not Safe

In a prior post on the topic of Launching a Consulting Business we began covering the necessary (but boring) stuff that must be in place (i.e., legal, accounting, insurance, etc.) to properly manage the business and mitigate the inherent risks.

As mentioned, an overall theme here is recognizing that there must be separation between your personal and business affairs.

We will now cover the next topic…

Accounting and Finance

I went into business for myself to deliver services, NOT to keep my own books or to prepare tax-related documentation. And, if you’ve decided to form a corporation there is a required set of financial reports that will need to be created on a monthly and annual basis.

Shortly after forming my business I found a very good CPA (certified public accountant) firm that I’d highly recommend: Appletree Business Services. If you contact them, tell them I sent you.

One of the first things they said, which really struck me, was: “Our job is to keep you out of jail.” Well, I thought, I’m glad somebody will be doing that 🙂

How many of us have heard about, what seems to be, lucrative tax-saving strategies? And, being cost-conscious, we give serious consideration to these “schemes.” Whenever I hear of a business (or personal) tax strategy that seems lucrative I call my CPA at Appletree Business Services. After a quick conversation they’ll clearly let me know when:

• It is a viable and legal strategy (let’s do it!)
• They’ve heard of others doing it, but reinforce that if audited it could create some sticky situations (i.e., if you do it, you may not sleep well at night – worrying)
• This is not a viable or legal strategy (don’t do it!)

My approach is to “push the envelope” and leverage every strategy available to me: only when it is 100% legal and viable. That is, my overarching guideline is: I want to be able to sleep well at night.

I won’t go into other details related to what my CPA firm does. Because, once engaged, you are on “auto-pilot” and all these affairs are, well, simply put – covered! I love that!

That said, there is one other accounting and finance-related matter to mention.

You must have a separate / business bank account so that you don’t inter-mingle personal vs. business finances. And, it is suggested that you select a bank that makes it easy to do EVERYTHING online (be green / avoid paper).

For example, once your business grows beyond you, as the single resource delivering services, you’ll want to be able to pay any subcontractors and/or employees via ACH transfer (NO PAPER CHECKS). This offers many advantages:

• Saves time vs. writing checks and placing in the snailmail box
• Your team-members receive their money directly in their accounts within 3 business days (less if absolutely required, for a fee)
• It is green…Did I mention: NO PAPER!

In a future post we’ll continue covering the “boring stuff” that must be in place (i.e., insurance, etc.) to properly manage the business and mitigate the inherent risks.

Click here to review the next article in the series.

DISCLOSURE: I am not qualified to provide legal, accounting or insurance-related advice. What I am suggesting here is: you must get some!

In a prior post on the topic of Launching a Consulting Business I mentioned we’d cover the necessary (but boring) stuff that must be in place (i.e., legal, accounting, insurance, etc.) to properly manage the business and mitigate the inherent risks.

An overall theme here is recognizing that there must be separation between your personal and business affairs.

Legal Counsel

This starts with determining the type of business entity you will form. Key considerations:

• Protection: separating your business from personal affairs (as mentioned above)
• Taxation: as each type of entity has different tax implications (costs / benefits)
• Client preference: I’ve found that “most” companies prefer to engage with a corporate entity vs. an individual.

Realizing the above, I formed a corporation right from the beginning…

It is suggested that you discuss this topic with your Legal Counsel and CPA to determine the type of corporation and/or entity that is right for you / your business.

Building on the topic of legal, you will also want to have in place the appropriate legal support and contracts you may need. This can include, but is not necessarily limited to, agreements between your company and:

• Your clients
• Any subcontract / freelance consultant you may engage

Lessons learned in this regard:

• Your clients will likely have a set of standard agreements (non-disclosure and/or master service agreements) you’ll need to execute in order to engage with them. That said, prior to executing, you may want your Legal Counsel to review these and provide any guidance – for your consideration…
• You’ll want to have a Statement of Work (SOW) template that generically outlines the nature of services you provide and the parameters you use to frame-up / scope / price the project as well as documenting a standard set of expectations and assumptions that your client must be aware of when engaging you to deliver the services you render. Then, once you begin discussing a specific project with a client you can update this with the relevant details.
• Bottom-line: When engaging Legal Counsel make sure you feel 1000% comfortable with them and clearly define their scope (i.e., the number of hours they are allowed to burn on each topic you request their input on). Also note, your Legal Counsel does NOT run your business. Their guidance is for your consideration only. You must consider their input and weigh the potential risks (or not) that could result by not following that guidance. To be clear, I’m not suggesting that you play in gray areas where you may be “legal” or not. Always remain compliant with law! What I am indicating is that your Legal Counsel may suggest adding “extra weight” to the language to protect you and/or try to remove your client’s contractual language for the same reason – when it simply may not matter. The decision to take their guidance, or not, rests on you!

The firm I have worked with since my business launched is: Innovative Business Law Group, which I would highly recommend. If you contact them, tell them I sent you.

A final piece of advice regarding your legal counsel. Don’t let them take you out to lunch 🙂

Some time ago I went to lunch with my legal counsel from IBLG and he asked me some very good questions which identified potential risks / blind spots that I had not considered. The result: indigestion 🙂 Thankfully, we promptly closed those gaps and my indigestion has subsided…

In a future post we’ll continue covering the “boring stuff” that must be in place (i.e., accounting, insurance, etc.) to properly manage the business and mitigate the inherent risks.

Click here to review the next article in the series.

DISCLOSURE: I am not qualified to provide legal, accounting or insurance-related advice. What I am suggesting here is: you must get some!

In the prior post on the topic of Launching a Consulting Business we began discussing the topic of “How to avoid Feast vs. Famine.”

The first / major step here (to ensure a continuous revenue stream) is to never cease your marketing activities. And, because this is so important, it will be covered in future posts as well.

Assuming that you never cease your marketing activities (I cannot say this enough) you should be generating inquiries for your services on an ongoing basis.

At this point, some might ask: “What happens if I’m already busy when someone requests my services?”

To this (a small-thinker’s question) I’d respond with “Are you bragging or complaining?”

This is a GREAT problem to have! If you’ve been listening (reading this blog) you have positioned yourself to start growing your business (beyond a one-person shop). At this point, you have a couple of choices: NONE of which would include telling your prospect that you cannot help them at this time. That would be suicide!

In fact, I have only turned away 1 prospect since launching my business. The reason: they were in Mexico City and wanted me to live there for (at least) 6 months. At the time my (4) kids were very young and I didn’t want to be away that long (for fear that my wife would kill me 🙂 ). In another year (2015) all my kids will be 18 or older, in college, the military or living on their own. If/when a similar opportunity presents itself my wife and I will likely be on the first plane to Mexico City to enjoy some time there (before, during and after the engagement)! Ah, the flexibility of living outside of corporate employment.

I digress…

So, what do you do when you receive an inquiry at a time when you are already busy?

In the prior post I mentioned that I “try” not to engage with any single client for more than a few days a week. This leaves me time for marketing activities, mountain biking, skiing and, oh yeah (back-to-business), engaging with other clients. As such, if the scope, timing and scheduling flexibility are such, you might try taking this additional project on in parallel with your other / current engagement. To be sure, you are going to have to be VERY GOOD at managing your time/schedule and both clients’ expectations so that you knock both projects out of the park. Said another way, YOUR scheduling challenges are NOT your clients’ problem. You must make it invisible to them!!!

But, you are still doing it all yourself and you won’t have time to take on that “next” engagement that will result from your ongoing marketing activities. As a result, you will be limiting your business growth (and income). I hate that 🙂

At this point you can engage other people to join your team. And, in the beginning, this does NOT mean that you must hire employees…

Like you, there are other freelance consultants out here (or people who wish they were) who will engage on a project-by-project basis. To find them, simply reach into your personal network (LinkedIn is a GREAT tool for this purpose) and seek-out individuals with the skill-set and availability to assist you. Note: You are encouraged to begin this process in advance, so that you have a roster of people (other freelance consultants) you can call upon when the opportunity presents itself. As previously mentioned, it can be useful to have these people as members of your Board of Advisors.

Then, over time, you can decide if/when it makes sense to bring on any full-time employees. This is a topic for an entire book that I don’t plan on writing 🙂

How do you leverage these people? Depending on the nature of the project, skill-set requirements and your own availability, you could:

• Have them work side-by-side with you
• Completely hand-off the project to them
• A progressive combination of the above

I probably don’t need to go further in regards to having someone work side-by-side with you on this additional engagement. That is, you would be “in the lead” and they would take on any overflow work (or work that is more aligned with their skill-set and availability vs. yours) to complete the project.

At some point, however, you will find it necessary (and/or desirable) to completely hand-off projects to others. You can do so in a few ways:

1. If you’ve been working a project for some length of time and have “gotten over the hump” (that is, laid the groundwork that absolutely required your time and expertise, have built a solid relationship with the client, and they are in a “good place”) you can bring on another consultant to drive the project to completion by phasing them in and phasing you out.
2. If you began the project with another consultant working side-by-side with you, over time you can prop them up as the lead and you can phase out.
3. During the early stage of developing the lead (for the new opportunity) you can bring another consultant with you. And you, together, “close the deal” fully setting the client’s expectation that this other consultant (on your team) will be the lead on the project.

In all of the above scenarios, you must realize that in the eyes of the client, you / your company is the “single throat to choke” for the project. As such, you must be sure that any resource (consultant or employee) you engage is capable of high performance under your good name!

In future posts we’ll cover the necessary (but boring) stuff that must be in place (i.e., legal, accounting, insurance, etc.) to properly manage the business and mitigate the inherent risks.

Click here to review the next article in the series.