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Consulting 101 2
- Thread starter Wavesg
- Start date
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1
- #2
CiscoGuy33
Instructor
Wavesg,
My brother does it accross the nation but with hospitals and main-frames, mid-range computers and PCs mostly data base stuff between the different systems.
First it helps to have worked in the area for several years, he did it for about 5 years with a hospital IT and then 3 years as a consultant for an IT firm that deals with hospitals. He then broke off on his own. HE DID NOT HAVE A NON-COMPETE and had a client, contract was up and company was looking for a "new" consulting company with him as the consultant - "instant business".
he has been doing it on his own for about 9 years, he is very lucky and has locked in several LONG-TERM contracts of several years. Many of the other consultants he meets on the flights around the country say to ALWAYS be looking for the next client, expect to be "down" 10% to 20% of the time so you need a reserve between clients.
He talked to his lawyer, insurance agent and accountant about setting up a business, some will include a banker if money will be needed also:
Name: - company name, name search, state registration and domain name for web etc.
Type of company: - LLC, Sole etc.
Insurance: - health, life, disabilty, business veh., liability, completed operations, errors and omissions, if you screw up or break something or delete something or reveal something etc.
Lic: - city lic, county lic. business lic. state lic. etc.
Taxes: - sales tax, city tax, state tax, income tax etc.
You need a lawyer you can trust who will read your contracts so you don't get screwed.
These are just a few of the things that he encountered, he knew most of what to expect from about 8 years in the business.
He has a seperate office at home with business phone, fax, Internet, computer, laptop and HP printer etc.
Hope this helps!
Gene
My brother does it accross the nation but with hospitals and main-frames, mid-range computers and PCs mostly data base stuff between the different systems.
First it helps to have worked in the area for several years, he did it for about 5 years with a hospital IT and then 3 years as a consultant for an IT firm that deals with hospitals. He then broke off on his own. HE DID NOT HAVE A NON-COMPETE and had a client, contract was up and company was looking for a "new" consulting company with him as the consultant - "instant business".
he has been doing it on his own for about 9 years, he is very lucky and has locked in several LONG-TERM contracts of several years. Many of the other consultants he meets on the flights around the country say to ALWAYS be looking for the next client, expect to be "down" 10% to 20% of the time so you need a reserve between clients.
He talked to his lawyer, insurance agent and accountant about setting up a business, some will include a banker if money will be needed also:
Name: - company name, name search, state registration and domain name for web etc.
Type of company: - LLC, Sole etc.
Insurance: - health, life, disabilty, business veh., liability, completed operations, errors and omissions, if you screw up or break something or delete something or reveal something etc.
Lic: - city lic, county lic. business lic. state lic. etc.
Taxes: - sales tax, city tax, state tax, income tax etc.
You need a lawyer you can trust who will read your contracts so you don't get screwed.
These are just a few of the things that he encountered, he knew most of what to expect from about 8 years in the business.
He has a seperate office at home with business phone, fax, Internet, computer, laptop and HP printer etc.
Hope this helps!
Gene
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1
- #3
ousoonerjoe
Programmer
Don't forget about the good CPA you can trust too! Once the lawyer makes you legal, the CPA keeps you from getting raped by all the tax laws.
--------------------------------------------------
Bluto: What? Over? Did you say "over"? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? No!
Otter: Germans?
Boon: Forget it, he's rolling.
--------------------------------------------------
--------------------------------------------------
Bluto: What? Over? Did you say "over"? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? No!
Otter: Germans?
Boon: Forget it, he's rolling.
--------------------------------------------------
CiscoGuy33
Instructor
ousoonerjoe,
VERY good point and to that you might as well add a good BUSINESS insurance agent who understands the risks of an IT Pro.
Think about it, you are a Cisco Network engineer, you design a Router/firewall/IPS for the biz and a hacker still gets in and steals 50,000 VISA/AMEX etc. accounts ........
As I said my brother has a completly seperate office at home so the teenage kids are not answering the business phone or bringing a virus in from MySpace on the "home" office network.
Makes it easier for taxes also, very clear that phone, computer, ISP etc is for business only not 25% "home" and 75% business. With some business it is not if you see the IRS, it is WHEN are you going to see the IRS - like he said - a GOOD CPA!!!!!!
Gene
VERY good point and to that you might as well add a good BUSINESS insurance agent who understands the risks of an IT Pro.
Think about it, you are a Cisco Network engineer, you design a Router/firewall/IPS for the biz and a hacker still gets in and steals 50,000 VISA/AMEX etc. accounts ........
As I said my brother has a completly seperate office at home so the teenage kids are not answering the business phone or bringing a virus in from MySpace on the "home" office network.
Makes it easier for taxes also, very clear that phone, computer, ISP etc is for business only not 25% "home" and 75% business. With some business it is not if you see the IRS, it is WHEN are you going to see the IRS - like he said - a GOOD CPA!!!!!!
Gene
ousoonerjoe
Programmer
You should peruse through the forum1248 forum. There's many threads on this topic there.
--------------------------------------------------
Bluto: What? Over? Did you say "over"? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? No!
Otter: Germans?
Boon: Forget it, he's rolling.
--------------------------------------------------
--------------------------------------------------
Bluto: What? Over? Did you say "over"? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? No!
Otter: Germans?
Boon: Forget it, he's rolling.
--------------------------------------------------
- Thread starter
- #6
Alternatively, you could get a job with a consulting firm rather than freelancing. Usually the money isn't as good, but you also don't have to worry about the sales/marketing/accounting side of things either. Just be sure to find a true consulting firm, not a staffing or placement agency (many of them call themselves consulting companies).
________________________________________
CompTIA A+, Network+, Server+, Security+
MCTS:Windows Server Virtualization
MCSE:Security 2003
MCITP:Enterprise Administrator
________________________________________
CompTIA A+, Network+, Server+, Security+
MCTS:Windows Server Virtualization
MCSE:Security 2003
MCITP:Enterprise Administrator
CiscoGuy33
Instructor
kmcferrin,
You are sooooo right, I would not even think of doing it "freelance" unless I had been working that market for someone else so I knew the pitfalls etc.
But you do need to understand your non-compete if you do break loose on your own!!
E.A. Broda
CCNA, CCDA, CCAI, Network +
I've toyed with the idea of freelancing several times, but unless I have some regular customers lined up there's no way I could make the jump. Until you have the network on contacts and the reputation, getting significant business is going to be difficult.
________________________________________
CompTIA A+, Network+, Server+, Security+
MCTS:Windows Server Virtualization
MCSE:Security 2003
MCITP:Enterprise Administrator
________________________________________
CompTIA A+, Network+, Server+, Security+
MCTS:Windows Server Virtualization
MCSE:Security 2003
MCITP:Enterprise Administrator
ousoonerjoe
Programmer
I tried it for a little while. It is very tough to get established and stable (as stable as a consultant can be). When looking at starting a business on your own, the rule of thumb is you need to be able to make THREE times your current pay before actually quitting your day job. After taxes, benefits, insurances, equipment, basic overhead costs, etc., you'll be able to take home close to what you currently make. Be careful not to under bid yourself and do not spread yourself too thin (though, this is a hard line to find at first since you need the work to get established and pay for everything).
Whatever you do.... avoid employees as long as possible. You'll have an added expense of Work Comp, Unemployment Insurance, Insurances, increased overhead, and lot more other goodies an attorney and/or HR Consultant can inform you about (for a small fee of course).
--------------------------------------------------
Bluto: What? Over? Did you say "over"? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? No!
Otter: Germans?
Boon: Forget it, he's rolling.
--------------------------------------------------
Whatever you do.... avoid employees as long as possible. You'll have an added expense of Work Comp, Unemployment Insurance, Insurances, increased overhead, and lot more other goodies an attorney and/or HR Consultant can inform you about (for a small fee of course).
--------------------------------------------------
Bluto: What? Over? Did you say "over"? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? No!
Otter: Germans?
Boon: Forget it, he's rolling.
--------------------------------------------------
1. Measure your risk tolerance. Would you be able to sleep at night with two weeks left on a contract and nothing lined up to take its place?
2. Even with accountants and lawyers, you need to have a very good understanding of the tax laws and how your actions during the year can affect your tax return, both negatively and positively. Your not going to call your accountant every time you're thinking of making a purchase.
3. How good are you at schmoozing, networking, and otherwise getting the word out that you're available for work?
4. How good are you at handling rejection? Suppose you talk to or market yourself to 10 potential clients and have each them reject you?
5. Do you have enough startup cash available? The biggest reason people fail on their own is they underestimate how long it will take to find meaningful work that pays well enough to pay the bills. I would say that a six-month cushion is necessary. Maybe even longer in this economy.
6. Are you ready and willing to pay for your own education and training? Be aware that you are not making any money when you are away at training. Clients will expect you to be current on training and certifications.
7. Every contact with a client is really a job interview. make sure you can come talk about yourself easily and with confidence.
8. You do not receive regular paychecks. Clients will treat you like a business and not an employee. Many businesses hold back payment longer than you might like.
9. Do you like to be part of a group. As an independant, you are treated as an outsider. You may not be invited to luncheons, birthday celebrations, after work parties.
I don't want to paint to bleak a picture but this is the reality. I was independent for 30 years before one of my clients offered me a job. I figured it was about time to get a regular paycheck and not have to worry about the extra business stuff. I enjoyed being independent and may do it again when I retire to supplement my income.
2. Even with accountants and lawyers, you need to have a very good understanding of the tax laws and how your actions during the year can affect your tax return, both negatively and positively. Your not going to call your accountant every time you're thinking of making a purchase.
3. How good are you at schmoozing, networking, and otherwise getting the word out that you're available for work?
4. How good are you at handling rejection? Suppose you talk to or market yourself to 10 potential clients and have each them reject you?
5. Do you have enough startup cash available? The biggest reason people fail on their own is they underestimate how long it will take to find meaningful work that pays well enough to pay the bills. I would say that a six-month cushion is necessary. Maybe even longer in this economy.
6. Are you ready and willing to pay for your own education and training? Be aware that you are not making any money when you are away at training. Clients will expect you to be current on training and certifications.
7. Every contact with a client is really a job interview. make sure you can come talk about yourself easily and with confidence.
8. You do not receive regular paychecks. Clients will treat you like a business and not an employee. Many businesses hold back payment longer than you might like.
9. Do you like to be part of a group. As an independant, you are treated as an outsider. You may not be invited to luncheons, birthday celebrations, after work parties.
I don't want to paint to bleak a picture but this is the reality. I was independent for 30 years before one of my clients offered me a job. I figured it was about time to get a regular paycheck and not have to worry about the extra business stuff. I enjoyed being independent and may do it again when I retire to supplement my income.
CiscoGuy33
Instructor
tcsbiz,
VERY GOOD POINTS !!!!!!
6. Are you ready and willing to pay for your own education and training? Be aware that you are not making any money when you are away at training. Clients will expect you to be current on training and certifications.
My brother had to take 2 weeks off (no billing) fly to Ca., stay at a hotel and pay $10,000 for a database training class on some VERY specific stuff
He did it because he knew his market and the clients kept asking if he was ...... it has now paid off over the long run!!!
In some very specific areas - training is hard to come by and $$$$$$$$$
Just some thoughts!
E.A. Broda
CCNA, CCDA, CCAI, Network +
VERY GOOD POINTS !!!!!!
6. Are you ready and willing to pay for your own education and training? Be aware that you are not making any money when you are away at training. Clients will expect you to be current on training and certifications.
My brother had to take 2 weeks off (no billing) fly to Ca., stay at a hotel and pay $10,000 for a database training class on some VERY specific stuff
He did it because he knew his market and the clients kept asking if he was ...... it has now paid off over the long run!!! In some very specific areas - training is hard to come by and $$$$$$$$$
Just some thoughts!
E.A. Broda
CCNA, CCDA, CCAI, Network +
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