corp to corp IT consulting business 4

[yehong]

I am thinking about starting an IT consulting business. During my 8 year IT programming history, I have worked both as a conractor and a full time employee. Now I am thinking about starting a consulting business and marketing myself as a contractor through my own company. Basically I want to remove the middle man and work directly for businesses through my company and also be myself as a middle man to hire candidates for businesses.
I have few questions:
1- Is this a good idea?
2- How should I get started?
3- How much money do I need to start this business?
4- Can I start it from home rather than renting an office space etc?

Thanks,
yehong

 

[dgillz]

This is pretty much what I have been doing, as an ERP consultant, for 10 years. I have not totally cut out the middleman as I can still get some good work this way.

I have a website, but I work out of the house, or go on site. If you already have a good internet connection and a laptop, you are probably ready to go and won't need much money.

I would advise that you get a gotomeeting.com account, or equivalent. This will allow you to remotely connect to servers and workstations with just an internet connection. This can be very helpful if you are on the road and cannot connect via VPN, terminal services, etc. This can be very handy debugging individual workstations that may be missing the odd.dll file, or whatever.

Marketing wise, how do you intend to advertise yourself? What kind of programming do you do? I might even be able to throw some work your way.



Software Sales, Training, Implementation and Support for Macola, eSynergy, and Crystal Reports

http://www.gainfocus.biz

"If you have a big enough dictionary, just about everything is a word"
--Dave Barry

 

[yehong]

Thanks. Great response and I am already feeling excited. Yes, I own a laptop and have a high speed connection. And I am confident that I can get contracts through personal channels but need advice about advertising, marketing, wow to open a firm and get a tax id etc.
As far as my experience, I have 8 years extensive experience in developing Crystal Reports, two years experience in developing VB applications, about 8 years average experience in working with Oracle and SQL server (creating tables, views, store procs, triggers, data marts), and about two years experience in working with Java, ASP, JasperReports, Jasper OLAP etc, and about one year experience in creating ETL transformations using open source tools. Let me know how I can be of help to you. Thanks.

 

[dgillz]

Please visit my website, and email me, I am Don, the owner. You definately have the right skill set.

Software Sales, Training, Implementation and Support for Macola, eSynergy, and Crystal Reports

http://www.gainfocus.biz

"If you have a big enough dictionary, just about everything is a word"
--Dave Barry

 

[mmorancbt]

I've been a consultant - no middle man - at times totally solo and other times having up to 7 FTE's and some contractors. It's a great idea if (and only if) you understand that consulting involves sales and marketing too - not just coding and technology.

I have been slotted to write The Technology Consultant's Toolkit - a series of e-books - for Cisco Press. Actually, the imprint might end up being Addison-Wesley or a more generic business book publisher (part of the same publishing conglomerate). The first e-book is on sales and marketing.

I tabled these because I have been working on a variety of other writing and consulting projects. However, it is likely that I will write them in the next several months. If you have specific questions, feel free to contact me as well.

I have posted numerous responses here at Tek-tips over the past 4+ years on consulting, marketing, and professional development - probably most of my e-book's content could be gleaned through these pages and my blog below... darn, there goes another potential sale.

http://www.KreativeKnowledge.com

Also, what is your .NET experience/background?

Finally, my blog has a number of articles specifically on marketing, billing, and client engagement for the consultant. Most of these are categorized under, The Consulting Life tag/archive...

http://blogs.ittoolbox.com/pm/career/archives/categories/The+Consulting+Life

I hope that is helpful.

Matthew Moran (career blog and podcast below)
Career Advice with Attitude for the IT Pro

http://blogs.ittoolbox.com/pm/career

 

[GlenJohnson]

1)Develop a good company name.
2)Buy a website and develop it using the company name.

http://www.register.com

has some for a good price. Don't think you have to be stuck with a dot com. Mine is a dot u.s.
3)Go start a bank account using the company name so you can keep personal and private moneys separate.
4)Don't know what state you're in, so I don't know if you'll need to incorporate. Sub chapter S is about the easiest, but I'm just not sure how much liability is involved in IT work.
Good luck and keep us informed.

Glen A. Johnson
Johnson Computer Consulting

 

[yehong]

Great suggestions. I live Houston, Texas. I went to an attorney today to discuss registering my firm as a dba or a LLC. He was too expensive. He said he would charge $650 for LLC. I am going to google around to find some economical firm to register my llc. I will keep you guys posted.
Any ideas about company names? What things I should consider in deciding about my company name?

 

[yehong]

Also, what is your .NET experience/background?

Unfortunatley didn't have a chance to work extensively on .net stuff. I have done some coding in vb.net and crystal reports for .net and thats it.

 

[Dollie]

Just an FYI that there are some drawbacks when contracting corp to corp, although some see these drawbacks as minor. Depending on the client, and how many layers of sub-vendors they have, you may be forced to carry up to $1M liability on you and/or your company with the client named as the additional covered. Some small consultants simply cannot afford this type of insurance. Some firms are offering ways around it, however, by reducing pay and carrying you on their insurance.

You may have to provide your own background check and drug test. You may have to go to client headquarters in another state at your own expense. It may be difficult to work for larger client$ if you are not prepared for the expenses before the job even starts.

Not here to throw a wrench into things, or to discourage, but I'm all for full disclosure. Be sure to ask about these and other quirky contractual obligations demanded by the client before accepting the job. Most companies will give you a sample contract for your review. If they don't, be wary!

 

[yehong]

Hi Dollie,thanks for these eye-opening facts. I guess I need to do alot of reading to understand this business model and its pros and cons.

Also, I have registered following domain name for my startup.

http://www.compusys.us.

Someone had already taken .com, so I settled with .us and I am beginning to like it.
"The journey will not start but with the first step."

 

[dgillz]

I have never carried liability insurance and don't plan to. I have never had anyone ask for it. My biggest customer is approximately $500 million in sales annually, so it is not just mom-and-pop operations I work for.

Software Sales, Training, Implementation and Support for Macola, eSynergy, and Crystal Reports

http://www.gainfocus.biz

"If you have a big enough dictionary, just about everything is a word"
--Dave Barry

 

[Dollie]

dgillz,

It is usually the blue chip companies (S&P 500 types) that require all sorts of insurance, indemnification, and liability reassumptions. There may be patent disclosures, previous works disclosures, as well as previous employment disclosures (beware the non-compete agreement, there's a fine line in some areas these days). It's a good thing that not all companies have stiff requirements, otherwise the IT world would be much smaller and innovation stifled more than it is now.

 

[dgillz]

I sign non-disclosure agreements on a regular basis. No one has ever asked me to sign a non-compete. My customers are manufacturing companies with $5 - $500 million in sales. It is a very safe bet that I am not going to compete with them.

Software Sales, Training, Implementation and Support for Macola, eSynergy, and Crystal Reports

http://www.gainfocus.biz

"If you have a big enough dictionary, just about everything is a word"
--Dave Barry

 

[Dollie]

You've been lucky! I think I'd choose those clients over some we have to deal with

Sign here, and here, and here, and here, and here, and here, and here, and <ack> here, and here....

 

[dgillz]

My other rule is I do not deal with any government or quasi-government entities of any kind, at any level. Fed, State, City, County, School Board, etc. The additional paperwork and assorted bovine excrement does not turn me on.....and they are the slowest payers of anyone I have ever worked with.

Having said that, I know consultants who specialize in this, and make a good living. To each their own.

Software Sales, Training, Implementation and Support for Macola, eSynergy, and Crystal Reports

http://www.gainfocus.biz

"If you have a big enough dictionary, just about everything is a word"
--Dave Barry

 

[AndrewTait]

My customers are manufacturing companies with $5 - $500 million in sales. It is a very safe bet that I am not going to compete with them.

Non-compete agreements are not just about the specific work you do, but who your clients are.

For example, Ford may employ your services for a particular job, and ask you to sign a non-compete agreement which say you will not work for GM for 3 years.

This is to protect their business, in the form of any data, intelectual property rights, or methods and procedures which give them an advantage in the market.

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You may think if it isn't broke, don't fix it. Engineers think that if it isn't broke, it doesn't have enough features yet!
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[technome]

Two cents....

Been on my own for over 20 years as a consultant, use Chapter S. In NY, LLCs are required to advertise in the newspaper for a period of time, expensive.

What ever entity you choose, keep the entity and your personal finances separate or your protection from liability flowing to you is negated; in a lawsuit lawyers look into this.

I carry no company insurance, but have umbrella coverage for >1 mil on home owners insurance, cheap add-on. Never been sued.


Nevr had an audit or had a tax penalty but the government has tried a few scams on me, mainly by losing payments and forms. The biggest scam, they lost dissolution papers on a Corporation, then tried to bill me for penalties 10 years latter, to the tune of $10,000 (in 1982)...
Do not play games with the tax authorities. Do not cheat on your taxes. The government waits just under 3 years (can be latter), then informs you of the interest and penalties (18% compounded on principle and penalty). Declare all cash, as the government will track it down. Get a good accountant, as a minor mistake on any form can cost hundreds, plus trigger audits. Best to have third party do payroll, who absorb penalties for any mistakes or late forms. Send all forms to the government certified, receipt request, otherwise the forms hit the waste basket. I pay tax liabilities/insurance with money orders, this way your not liable for "lost" payments, as long as you have the stub receipt; in court if you have the stub it is considered proof of payment, a check does not provide this protection. Keep all receipts, even if you have credit card statements. Keep all tax information much greater then 3 years, I still have tax info from 1982.

........................................
Chernobyl disaster..a must see pictorial

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