What Legal Business Structure Do Consultants Need?

/
What Legal Business Structure Do Consultants Need?

This is one of the questions I get asked most frequently by independent management consultants. Unfortunately, it’s also one of the hardest to answer because every person’s situation is different and there are multiple factors to consider. While this article will help you think through the various factors, here is the short answer: 90% of the self-employed consultants I know are set up as either a sole proprietorship or a single-member LLC.

Why is this decision so important? Although it can be a boring subject, your business structure will have significant implications, including:

Taxes. Not only how much or how little you pay but also the ease or complexity of preparing your taxes.

Lawsuits. We live in an extremely litigious society and need to consider asset protection; this is why business insurance is also an important consideration.

Image. Potential clients will perceive you differently if you have “LLC” or “Inc.” as part of your business name. More about this below.

Read More

One Easy Step to a Polished Professional Image

/
One Easy Step to a Polished Professional Image

When you're a self-employed management consultant, conveying a professional image is critical to maximizing pay and profit.

Consultants who present a professional image as a stand-alone business can charge more for their services. It’s all about perception. If you look like you are doing consulting on the side or between jobs, clients won’t take you as seriously as someone who is a dedicated professional.

You will pay less in taxes—possibly a lot less—if you take advantage of business-owner tax deductions and contribute to your own retirement plan. To do this you should be paid on a 1099 tax basis instead of on a W-2 basis like a temp worker. To understand why, watch the 70-second video, “Why Friends Don’t Let Friends W-2.”

To be paid on a 1099 or business-to-business basis, you will likely need to demonstrate that you are an established business. There are dozens of ways to do this, but let’s keep this simple and pinpoint just one: your email address.

Read More

Independent Consultants: Excellence Begins Here

/
Independent Consultants: Excellence Begins Here

Have you ever dreamed about starting something and the idea just won’t go away?  You give yourself all sorts of reasons not to pursue it.

“I don’t have time.”

“Someone else has probably already done it.”

 “It’s too big. I’ll never be able to accomplish it.”

“I can’t commit to another thing!”

Or in my case, “I hate to write.”

But the idea still won’t go away.

Now, you start thinking about all the reasons you should do it. As you talk yourself into it, the idea spawns scores of related ideas, and you can’t not do it.

So here I am, launching this blog, which will help you become a better management consultant and solopreneur.

Read More