Two Reflection Exercises to Help You Work Smarter

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Two Reflection Exercises to Help You Work Smarter

Everyone wants to work smarter, but when you’re self-employed finding time to work on your business, not just in it, is hard. You’re already so busy doing client work, where’s the time to make improvement? It’s even harder to step back and evaluate what you’re doing, not just how you’re doing it. Working smarter is about doing the right things, not just doing tasks more efficiently. 

But how do you know if you’re doing the right things? And what does “working smarter” really mean? Most businesses measure growth rate, client retention, revenue, and profit margin. However, as an independent consultant one thing is even more important—your own satisfaction and fulfillment, or literally your “internal rate of return.” You went out on your own for a reason—how is it working out?  

Below are two simple exercises to help you assess your internal rate of return and point you to working smarter. It’s best to do one or both either while you’re on vacation or just back from one, after you’ve cleared your brain a bit and caught your breath. Another option is to use your morning run or commute to think about these questions—no music, just listen to your thoughts. 

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Setting Up a Foundation for Consulting Success

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Setting Up a Foundation for Consulting Success

This article covers two sides of the same coin for independent consultants: how to set up your business for success and what expenses to track to pay less tax. They're interrelated. Let’s tackle the tax question first.

What do I need to keep track of so I pay less tax?

Here’s a short list of the most important things and some tips to make it easier.

  1. Have a dedicated credit card that you use only for business expenses. Use this card for anything you can think of related to your business, such as parking, tolls, cell phone, internet, office supplies, etc. Even if you work from home, what would you normally buy if you were in an actual office? These business expenses will be deducted from your gross earnings to lower your taxable income. If you can, pay your health insurance with this same card since it too will be tax deductible.

Tip: Download the credit card's year-end summary so you have a spending breakdown by category. Or you can download the transactions into a tool like Quicken each month and categorize the expenses there. (You’ll have to break them out by category on your tax return.)

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What Legal Business Structure Do Consultants Need?

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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.

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One Easy Step to a Polished Professional Image

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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.

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Independent Consultants: Excellence Begins Here

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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.

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