Getting Started
We will assume that you have already:
- Assessed your skills
- Assessed how you can benefit potential clients
- Formulated a viable business plan
- Selected target markets
The next step: develop your business image.
What’s in a Name?
Oftentimes the first exposure a prospective client has to your firm is encountering your business name. Lead with a professional yet descriptive, attention-getting name. This tact alone can get you noticed and will aid you in standing out from your competition.
As you consider various names, seek the counsel of mentors, business associates or colleagues as you make your decision. If it is financially feasible, have an accountant or tax specialist conduct a name search to ensure that the choice that you have made will only be utilized by your firm exclusively.
What Legal Form will Your Business Take?
One of the most important decisions is to determine your business operating structure. There are several choices such as:
- Sole Proprietorship
- Partnership
- Corporation
Each has its own advantages or disadvantages.
Sole Proprietorship
One-owner business; easier and cheaper to operate than other legal forms of running your consultancy.
Advantages
Owner reports profit or loss on personal tax return.
Disadvantages
Not a separate legal entity; debts are the owner’s individual responsibility.
Partnership
Two or more people enter into a business and are responsible for the decisions, debts, and taxes of the entity.
Advantages
Owners report profit or loss on personal tax return.
Disadvantages
Owners are personally liable for business debts; no beneficial employment tax treatment.
Corporation
One or multiple-owner firm; allows the parties to organize, conduct and share in the profits and losses of the business.
Advantages
Clients have less risk from government audits; owners have limited personal liability for business debts.
Disadvantages
More expensive to create and operate than sole proprietorship; double taxation threat because the corporation is a separate taxable entity.
Worst Case
You’re forced to legally “fold” the company and re-charter it. Why modify your operating structure?
- The needs of your firm change.
- There are unexpected and unforeseen tax implications associated with your current operating structure.
Business Communication
Business Cards
Complimentary business cards, stationary and other marketing collateral can suggest that a firm is professional, well-planned and organized. The company name and your name should be displayed prominently. Include the mailing address, phone, fax, and e-mail address. If you use a business slogan and/or descriptive for your services, ensure that your business card is not cluttered. Avoid folded cards: they are cumbersome and less practical than traditional business cards.
Stationary
Logo (letterhead) stationary is certainly attractive but beyond the reach of most beginning consulting firms. An alternative is to use a discount printing outfit similar to VistaPrint. These companies have several template styles available for business cards, letterhead, envelopes, brochures and invoices.
Envelopes or Mailing Labels?
Business start-ups often are not able to initially afford extras such as fancy logo designs and envelopes, yet these firms wish to convey a positive image. If envelopes are not affordable, mailing labels can suffice.
Brochures
In lieu of putting together traditional marketing materials, many businesses use brochures to inform and project a credible image of services and capabilities. Brochures can be a practical and cost-efficient means of exposing prospective clients and professional colleagues to your firm.
As with business cards, focus on those techniques that work well. Although it will not be feasible to incorporate every element of your services, strive for a professional yet creative presentation. List no more than 3–5 services so that the reader is not lost in the content of your brochure.
Your brochure should address the following items:
- Clearly explain your services.
- Explain why you are the best and should be hired.
- Include a brief biographical outline of your consultancy.
- List your clients.
Newsletters
Newsletters are an excellent advertising resource for writers. Prospective clients may perceive more value from free newsletters. Remember to:
- Research and collect information from industry sources, ensuring that that each is credited appropriately.
- Provide your editorial comments as a subject matter expert on a subject relevant to your consultancy.
- Help your audience—provide suggestions that help them perform their jobs better.
- Showcase a client profile indicating how your services aided them.
Inside or Out?
Which office environment is best for you? It is very important to determine your on-going need for office space and the related expenses. Strike a balance between what is practical and what will aid in conserving cash.
Home Office
Many consultants prefer the convenience of operating an office within their residence to increase productivity and save money and time. Self-employed writers, editors, and others in similar vocations often find a home office environment meets their work requirements. Successful home-based writing and desktop publishing owner Lucy Parker indicates that there are five key criteria business owners should think about before deciding on running a home-based consulting firm. These are:
- The space you have available
- Existing equipment and start-up funds
- Your business specialty requirements
- Personal work habits
- Family lifestyle
Although home office deductions are appealing, they can have unexpected downsides. Potential audits may be possible in addition to paying capital gains taxes on depreciated property. In order to minimize the possibility of an audit, exercise several safeguards, such as establishing a post office box and use an answering machine to retrieve calls when you are away or on another call. Check with your tax specialist to ensure that you understand your options before you commit yourself.
Office Space
Many factors influence the decision to rent or purchase office space. Among them are the following:
- Delineation between work and private life
- Perception of credibility by potential clients or customers
- Possible efficiency improvements for those who cannot work in an independent environment
- Less likely to be audited by IRS
Renting commercial property can be more complex for a variety of reasons, including the fact that there are no standard leases. A number of items have to be negotiated, such as the amount of rent, what it will cover, the term, permitted uses, improvements, and maintenance. Two types of leases are:
- Net Lease
- The lessee agrees to pay all expenses normally associated with ownership.
- Gross Lease
- This is the most common type of property lease—landlord (lessor) pays all expenses associated with ownership.
Sharing Office Space
Some consultants discover that either there are too many distractions at home or it is difficult operating in an environment void of human interaction and socialization. It may be possible to partner with other like-minded professionals to share the costs of renting or leasing office space. Splitting the costs of meeting space, office equipment (fax, copier, printer, and phone) as well as the services of office personnel to take phone messages can be a win-win opportunity for all parties.