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Consulting Getting Started



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Consulting Getting Started

  1. 1. Consulting<br />Building Your Own Consulting Business<br />
  2. 2. Business Organization<br />
  3. 3. Sole Proprietorship/Partnership<br />Advantages<br />Easy and Cheap to Start<br />All profits go directly to owner or 50/50 partners<br />Complete control<br />Disadvantages<br />Unlimited liability<br />All NET income taxed as personal income<br />Potential loss of tax deductions<br />Self employment tax<br />
  4. 4. Limited Liability Company (LLC)<br />Advantages<br />Easy to setup<br />Owner(s) have limited liability protection<br />Disadvantages<br />Taxed like Sole Proprietorship/Partnership<br />Annual paperwork<br />Potential for extra state taxes<br />
  5. 5. S Corporation<br />Advantages<br />Owner(s) have limited liability<br />No Self Employment Tax<br />Salary distribution can be coupled with profit distribution to avoid higher tax rate. “Reasonable Salary”<br />Additional Tax advantages<br />Disadvantages<br />Significantly more paperwork (legal and accounting)<br />More expensive setup <br />More complex operation<br />
  6. 6. Insurance<br />
  7. 7. Errors & Omissions<br />Protection from legal action related to poor decisions or bad advice<br />Helps cover any award made against you<br />Helps cover cost to defend a legal action<br />Only good while policy is in effect, legal action in future without a policy means you are not necessarily covered<br />Industry standard is $1,000,000 coverage<br />Deductible affects the Premium<br />AKA Professional Liability Insurance<br />
  8. 8. Disability Insurance<br />Protects your earning capacity in the event of an accident or fatal illness<br />Difficult to obtain for Freelancers/Consultants due to fluctuation in income and lack of supervision<br />Workers compensation can be a viable alternative<br />Check on how the insurance company defines disability<br />Standard coverage would be 60% of NET income<br />Waiting period affects the Premium (like Deductible on other policies). Waiting periods usually break down in 30 day increments. 30, 60, 90, 120 or 365 day<br />Length of Coverage Period is how long they will pay you while disabled. Standard terms are 1, 2 and 5 years, but longer terms are available. This also affects the premium<br />Insurance for You<br />
  9. 9. Life Insurance<br />Only necessary if you have dependents<br />Policy Types<br />Term Policies vary widely, but some policies will return all premiums at the end of the Term. This affects the premium, but a great payday if you make it to the end<br />Whole Life and Universal Life are not recommended as they are less coverage for a higher premium<br />Standard recommendation is 70% of your earning power to provide a minimum of 5-10 years income for your dependents.<br />Don’t forget to have a will too<br />Insurance for Others<br />
  10. 10. Other Insurance<br />Auto Policy<br />Talk to an agent about coverage differences for a car used for your business in comparison to your personal auto policy.<br />Home Office Coverage<br />Talk to an agent about this coverage since business liability coverage is not part of a homeowner’s policy.<br />
  11. 11. The Company<br />
  12. 12. Company Presence<br />Name<br />Keep it memorable<br />Convey a message<br />Be careful when using unique spelling<br />Check domain name before final decision<br />Logo<br />Think about use in print materials<br />Business cards<br />Invoices<br />Simple concepts are best<br />Focus on positive vibrant colors<br />Blue is most commonly associated with productivity<br />
  13. 13. Communication<br />Office Phone<br />Cell<br />Google Voice<br />Vanity Phone Number<br />Voicemail<br />FREE<br />Email<br />NEVER use Hotmail, Gmail, Yahoo, ISP account, etc…<br />Google Apps (custom domain)<br />E-mail<br />Calendar<br />Documents<br />FREE option<br />
  14. 14. Marketing Tools<br />Business Cards<br />Overnight Prints (<br />Vista Print (<br />Social Media<br />Twitter<br />LinkedIn<br />Facebook<br />Website<br />Various hosting options<br />Content Management Systems can save time<br />
  15. 15. Marketing Opportunities<br />User Group meetings<br />Speaking opportunities<br />Chamber of Commerce or Technical Council events<br />Networking events<br />Blog<br />
  16. 16. Home Office Tips<br />Separate space from living area<br />Know your square footage<br />Keep recreational items out of area<br />Invest in a desk and comfortable chair<br />
  17. 17. Getting to Work<br />
  18. 18. Resume<br />Highlight<br />Technologies<br />Types of Applications<br />Industries<br />Metrics of contribution<br />Be sure to never violate Non-Disclosure (stay generic)<br />Remove<br />High School and non technology related jobs<br />Irrelevant comments “I code like a girl”<br />NO Third person bullets “Caleb developed a …”<br />
  19. 19. Subcontracting<br />W2<br />Employee like benefits<br />Taxes, Medical, etc…<br />Preferred by recruiting companies<br />Corp to Corp<br />Must have Liability Insurance<br />Improves Rate negotiations<br />Base rate<br />Overtime rate<br />Professional relationship<br />
  20. 20. What’s my rate<br />52 weeks (in a year) * 5 week days = 260 days<br />260 days – 10 major holidays = 250 days (2000 hours)<br />250 days – 15 days vacation = 235 days<br />235 days – 5 days (off contract) = 230 days<br />230 days * 8 billable hours per day = 1840 billable hours<br />1840 * $50 per hour = $92k<br />1680 * $50 per hour = $84k ( 25 days off contract versus 5)<br />“Never confuse the size of your paycheck with the size of your talent." Marlon Brando <br />The 2000 hour myth<br />
  21. 21. Contracts on your own<br />Master Service Agreement (MSA)<br />Agreement between your business and client to outline responsibilities and obligations each company has to one another. Your rates for service would be included here.<br />Statement of Work (SOW)<br />References the MSA for authority on those areas.<br />Outlines the deliverables, timelines, etc… for a specific activity<br />Find a good lawyer<br />
  22. 22. Getting Paid<br />Payment terms can be a great or terrible thing.<br />Net Due - Difficult to get any company to pay Net Due, so don’t plan on getting paid that quickly.<br />Net 10 – Get paid 10 days from receipt of invoice by customer. This is optimal, but not always possible. Plan on a 30 day deliver, just in case.<br />Net 30 – Get paid 30 days from receipt of invoice by customer. Standard for most companies. Don’t go higher than Net 30<br />When the client doesn’t pay you have minimal avenues<br />Send additional invoice as Net Due<br />STOP WORKING FOR THE CUSTOMER<br />Send certified or registered letter with copy of invoice stating payment not received and legal action will take place<br />
  23. 23. Tools<br />
  24. 24. Project Management<br />ProjectTurf (<br />Full featured, no FREE option<br />activeCollab (<br />No Free option<br />Basecamp (<br />Free option<br />Lighthouse ( <br />Free option<br />“Trying to manage a project without project management is like trying to play a football game without a game plan.” K. Tate<br />
  25. 25. Accounting<br />FreshBooks (<br />QuickBooks (<br />PeachTree (<br />GET AN ACCOUNTANT FOR TAX SEASON<br />“There's no business like show business, but there are several businesses like accounting.” David Letterman<br />
  26. 26. Time Tracking<br />Toggl (<br />Windows, Mac, Linux, iPhone, Android, Web<br />Works with BaseCamp, activeCollab, FreshBooks, QuickBooks<br />Klok (<br />Desktop, Android (BETA)<br />Works with BaseCamp and Harvest<br />Tick (<br />Web and iPhone<br />Works with BaseCamp<br />Harvest (<br />Desktop, Web<br />
  27. 27. Task Management<br />SCRUM<br />VersionOne (<br /><br />Rally (<br />Lean<br />LeanKit (<br />AgileZen (<br />
  28. 28. Source Control<br />GitHub ( <br />Public and Private git repositories<br />Free option<br />Bitbucket ( <br />Private mercurial respositories<br />Free option<br />Subversion<br />TFS<br />
  29. 29. Prime Time<br />
  30. 30. What is a Consultant<br />Architect<br />Developer<br />Project Manager<br />Business Analyst<br />Salesperson<br />Marketing person<br />Everything in between<br />“Consultants have credibility because they are not dumb enough to work at your company.” Scott Adams<br />
  31. 31. Consulting is not for everyone<br />Clients will not always treat you with respect<br />It isn’t personal<br />Clients may cut you loose for stupid reasons<br />Have an emergency fund of 3 months expenses (minimum)<br />Clients will sometimes use you as the scapegoat for their mistakes<br />Be prepared, document everything to be ready<br />You may have to take it, but you can protect yourself from legal action<br />Clients can ignore your recommendations<br />Again, it isn’t personal<br />“It's just a job. Grass grows, birds fly, waves pound the sand. I beat people up.” Muhammad Ali<br />
  32. 32. Accountability<br />Seriously evaluate any major task to ensure you can accomplish it<br />DO NOT accept any task if you cannot get it done CORRECTLY<br />Own up to mistakes and accept the consequences<br />It is worse to be known as seedy and deceitful<br />Avoid giving dates without a firm understanding of requirements<br />Always send a follow-up e-mail confirming what was communicated and your understanding<br />“No snowflake in an avalanche ever feels responsible.” George Burns<br />
  33. 33. Politics<br />DO NOT participate in office politics<br />DO NOT speak negatively of any consultant(s) directly<br />DO NOT be afraid to speak, if you know you are right<br />Know who the REAL client is and serve them as such<br />Remember as a consultant you can ALWAYS leave<br />“Hard work is rewarding. Taking credit for other people's hard work is also rewarding... and faster.” Unknown<br />
  34. 34. Client Interaction<br />Conduct yourself in a professional manner with everyone and in all situations<br />Work on your ability to translate complex information into simple terms or analogies<br />Try to have alternative options available, in case the client decides against a recommendation<br />Remember metrics are crucial for communicating benefit, measure and share<br />Don’t be afraid to say “I don’t know”, but don’t let that be the last thing you say. As a consultant you learn for a living<br />“… a professional is someone who can do his best work when he doesn’t feel like it.” Alistar Cooke, journalist<br />
  35. 35. Client Interaction (cont.)<br />Develop your ability to speak intelligently on a number of topics, but don’t misrepresent your abilities<br />Be a contributor, not just an order taker<br />Break up work into phases<br />Allows the client to see progress <br />Protects you from unexpected requirements impact<br />Be clear about your style/approach and how deviation from best practices can impact timelines.<br />
  36. 36. Questions<br />