Be Brave Not Safe

To-date, we have covered a number of items related to launching a consulting business.

Am I an expert on this topic? Not necessarily.

That said, the approaches shared seem to have worked for me / my business. Especially, considering the fact that my business was recently acknowledged by Inc. Magazine as one of the 5,000 fastest-growing, privately-held companies in America. Click here to review a related article.

The purpose of this post is to reinforce the fact that each item covered is an element of a business launch plan: a punch-list of activities to be considered and/or addressed. That said, don’t let the list overwhelm you, creating an (imaginary) obstacle that would prevent you from going down this path. The items on the punch-list can be “picked off” over time…How aggressive you are at picking these off depends on your timeline…

That is, you get to decide what timeline you’d like to adhere to. Do you want to launch a business within the next 3-5 years, or within a nearer-term window? The litmus test we covered in an earlier post will help to give you a sense of how ready you may be to go down this path.

If you recall, what prompted me to start this series was a conversation I had with a good friend and neighbor who is considering launching his own consulting business. One of the key guidelines I shared was: This is NOT rocket science. It is, quite simply, just a matter of DOING IT!

If you truly have a dream of being in business for yourself (and you pass the litmus test) you “can” make it (launching a consulting business) happen. Notice I didn’t say “you will make it happen.” To that, I’d refer to the wisdom of Yoda…

You must simply decide – to execute the plan, or not.

I hope you find this helpful.

Click here to review the next article in the series.

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

We’ll now address the final topic (that I plan on covering, related to “the boring stuff”).

Insurance

There are a number of insurance coverages that you’ll want to consider, including:

• Health, Dental, Life and Disability
• Professional Liability / Errors and Omissions
• Other policies and/or riders which may be specific to your industry or the services you deliver
• Workers’ Compensation

Health, Dental, Life and Disability

You’ll obviously want to continue covering yourself and your family in areas that may have been provided and/or subsidized by your employer. And, you’ll want to set this up BEFORE you make the final decision to announce your departure from corporate employment, as there are many cost implications to consider.

A key lesson learned for me: I had initially acquired my health and dental insurance through a small business association as, at the time, this “seemed” to be the most cost-effective manner for doing so. And, I was complacent for a number of years thinking it was my only option. As these insurance-related costs continued to dramatically increase they reached a point (a.k.a. level of pain) when I decided to investigate other options. I was pleasantly surprised to learn that I could get much better coverage at a much lower cost.

Bottom-line: Do your research and the math.

Professional Liability / Errors and Omissions

As the name would suggest, this coverage protects your business from “mistakes” that may be made in the delivery of your services.

You may find that some of your clients will require a certain level of coverage in this area in order to engage you.

And, depending on the nature of services you deliver and/or the industry you deliver them within, there may be other policies and/or riders you will want to have in place.

Workers’ Compensation

This policy applies once you have engaged other resources to be on your team (subcontract and/or employees) and can vary from state-to-state. You are encouraged to discuss the need for this policy with your Legal Counsel and CPA.

In closing, these “boring” topics are absolutely crucial to mitigate the inherent risks that exist in business. In these last few posts I’ve merely shared a punch-list of things for you to address as you prepare to launch your business along with some of my own experience and observations.

In a future post we’ll get back to more of the fun (business-building) stuff that I REALLY enjoy talking about 🙂 We just had to get this “boring” stuff out of the way before you get too far down the path…

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 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!