New To Consulting Presentation

It’s Your Talent – Own It! Making the Transition to Independent Consulting Gene Zaino President and CEO, MBO Partners

Overview The Entrepreneur Pros & Cons of being in business for yourself Is consulting right for me? Big vs. Small Business Structure 1099, sole proprietor ? S-Corp, C-Corp, LLC, PER ? Self-employed tax benefits Sales & Marketing Finding work Marketing your services Networking and backlog Compliance, Insurance and Accounting Tax administration Business insurance Cash flow: Billing, collections, expenses

Is Consulting Right for Me? Successful independent consultants have tenacity, determination, talent, and an entrepreneurial mindset.

Some Key Success Factors Core competencies of Independent Consultants Defined, verifiable expertise High integrity Comfortable with marketing and self promotion Able to establish and develop high quality, enduring relationships with clients and other professionals Can easily identify opportunities and then sell themselves and their ideas

More Key Success Factors Core competencies of Independent Consultants Apply knowledge and experience to add value to clients Create strong references (happy clients) Pursue a pipeline of potential new assignments without compromising existing client work Assemble a strong support team to minimize their time on financial, legal and business administration activities

The Oxford Dictionary Oxford defines Independent as follows: “ Not dependent on or controlled by another person or thing.”

The Independent Lifestyle Benefits of the consulting lifestyle Flexibility and Control You are your own boss Deliver your work, your way Manage your work / life balance Autonomy Build the skills you want to develop Pick the projects you want Avoid “office politics” Financial Rewards Profit from owning your talent Leverage your experience Own valuable relationships Launch pad to big business

Why the Time Is Right for an Independent Career Build career resilience during uncertain economic times Diversify your career portfolio Create a “go-to” network of relationships Maintain an infrastructure that generates constant flow of choices and opportunities “ All eggs are NOT in one basket”

“ The federal government is facing some extraordinary workforce challenges and will need to draw on the best talent from both government and government contractors.” John Palguta Vice President for Policy Partnership for Public Service Client Opportunities at the Federal Government

The Demographics Are In Your Favor Nearly 60% of Federal employees are over age 45. 550,000, 1/3 of the federal workforce will retire in the next five years. - Office of Personnel Management, 2007 “ Dual compensation restriction” bars retirees from drawing a full annuity while employed with the Federal Government even on a time-limited or part time basis. – Partnership for Public Service, 2007

Competition for Talent is Heating Up Throughout the United States 5/29/2008 OURPUBLICSERVICE.ORG

Migrating to an Independent Career Set up shop at home A quiet place with internet access Set up your consulting parameters Where do you want to work? When do you want to work? How many clients do you want? Stay as soloprenuer or big consulting firm? Build a 12 to 36 month plan Start planning while you are generating other income

Migrating to an Independent Career Hone your assignments to improve your marketability Add experience that will be in demand Learn which industries or areas will have largest need Focus on assignments that are your strengths Mold your skills to what will increase your value and set you apart

Migrating to an Independent Career Do you have ideas for your first contract? Anyone you can approach? Maybe lower your rates for right assignment in order to build reference base equity You can always raise or lower rates on future assignments but what you need is to get started

Build Your Brand Identity Build marketing materials List your skills and credentials Create a small list of interesting projects (case studies) You will need both a Resume and Services brochure Position yourself as an expert Offer free advice via online discussion boards, blogs, or articles Use the internet to build online profiles: Linked In www.linkedin.com MBO Partners www.mbopartners.com Email everyone you know and provide them with your profiles and materials Follow-up personally with key business relationships

Stay Connected Network with friends, past employers, professional associations Read professional journals to keep up on trends Attend conferences and workshops Collect business cards and follow up Connect with colleagues Find a mentor or two

Market Yourself “Directly” to Organizations Find the appropriate contacts Use corporate web site to identify opportunities Locate names of HR contacts and recruiters from job postings Develop rapport with internal recruiter Promotion notices in local business publications

When to Use Recruiting Firm (Staffing Company) Only when you can’t find project directly Important tips: Let them know you’re knowledgeable Protect the integrity of your resume Protect your references Protect your freedom to work directly (do not sign broad non-competes) Establish a corp-to-corp contract (or use a PER.. More later)

Legal Structures Choosing a Legal Framework for Your Business Sole Proprietorship 1099 Status Personal assets at risk Income taxed on 1040 Sch C Large Clients prefer to avoid Highest risk of audit C-Corporation Personal asset protection Taxed at Corp separately Double taxation Unlimited shareholders Very investor friendly Moderate risk of audit S-Corporation Personal asset protection Income taxed on 1040 Sch C Avoids double taxation Limited shareholders Investor friendly High risk of audit Limited Liability Company Personal asset protection Income taxed on 1040 Sch C Avoids double taxation Limited shareholders Easier, but investor un-friendly High risk of audit

Business Insurance What you need to protect your business Workers Compensation Compensation if injured at work General Liability Protects business assets in the event of personal injury or property damage Professional Liability (Errors and Omissions) Protects business assets in the event of errors or omissions

Vendor Qualifications How to get on the list The Vendor List Getting on is no small feat GSA for government work Supplier qualification assessment for large companies, consulting firms and integrators Some Qualifiers Years in business Financial strength Legal structure Business insurance Security Clearance Who will hold your clearance?

Accounting Getting systems in place Invoicing Hourly, by the project, by the piece Monthly or project-based billing Collections Expenses Some may be billable to clients Out-of-pocket, tax deductible Tax Management You may need to file quarterly estimated taxes Self-employment taxes for 1099s Management Options Software, e.g. Quickbooks Hired accountant Portable Employer of Record – manages back office (more later)

Tax Deductions Maximizing your tax benefits Home office Percentage of mortgage, utility bills Office supplies, computer equipment Travel and Entertainment Mileage to business meetings, on-site assignments Out-of-town travel to conferences, etc. Meals and entertainment for business Out-of-Pocket Medical Expenses for you and your family not covered by insurance Must meet threshold, or use PER Education Conference and seminar fees Continuing education related to industry Dependent Care Child care or elder care expenses from eligible, certified providers

Employee Benefits Medical, dental, life, disability Group versus Individual program Group means guaranteed coverage Retirement 401(k) program or SEP Tax deferred Roth option What About You and Your Potential Staff?

There Are Other Options Consulting companies Staffing agencies Portable Employer of Record firms (PER)

Understanding a PER: It’s Your Business, Make the Most of It Take everything you love about consulting… Operate as your own boss Pick your own engagements Set your own rate and terms Work multiple projects Build project teams Maximize your tax benefits … and add: Complete back-office support Improved cash flow Affordable group benefits Free GL, E&O, and crime bond Personal account service An “in” to huge clients Online system to track it all

Comparing the Alternatives What % of billing rate is kept? 100% 40% - 70% 92-96% Level of reclassification risk? High None (if W-2) None Find projects yourself? Yes No Yes Deduct business expenses? Yes No Yes Deduct medical expenses?* No No Yes Who handles financial admin? Self Staff/Cons Company PER Who carries business liability? Self/Corp Staff/Cons Company PER When do I get paid? Upon client payment Bi-weekly Upon client payment** Overall benefits quality? Varies Low to medium High Benefits cost? Very high Low to medium Medium Who absorbs employer payroll tax? Self/Corp Staff/Cons Company Self/PER Personal audit risk? High Low Low Credit profile? Weak Weak to Good Excellent Staffing/Cons. 1099/Self-Incorp. PER Who handles client billings and collections? Self Staff/Cons Company PER *Assumes under 7.5% of annual AGI in medical expenses ** May qualify for advanced financing

Is Consulting Right for Me? What it takes to be the best of the best Entrepreneurial Mindset It’s all up to you Your success is measured by the success of your clients Drive, dedication, and talent will ensure your success Specialized Skills and Knowledge You must have specialized skills and knowledge Experience, insights, and connections that will help businesses Business Sense Running a business is more than just being good at what you do Organization, back office management Marketing yourself

The MBO Difference: Run Your Business within Our Business Safe, client-friendly W-2 tax status Tax benefits better than 1099 or Corp No more quarterly estimates Lose the “shoe box” of receipts Audit risk dramatically reduced Improve credit score Maintain full autonomy Run your own division within MBO Your clients, your rates, your P&L MBO umbrella carries all privileges of large-company employment Extend benefits and payroll to staff

MBO Partners 13454 Sunrise Valley Drive, Suite 550 Herndon, Virginia 20171 1-800-220-0469 www.mbopartners.com

New To Consulting Presentation

More Related Content

What's hot

Similar to New To Consulting Presentation

Recently uploaded

New To Consulting Presentation