How do I start a consulting business?

[puffkin]

I am looking at starting up a small consulting business. It would be a part time type of business. I know how to get clients, I am just not sure what I need to do to start an actual business?

I have a name for the business. Can I just apply for a Tax Identification Number or would I need to do more than that? It would just be me doing the consulting, and there would be limited assets involved, mainly just my home computer.

Any suggestions on things I should consider before starting this business. Thanks in advance.

 

[jfulcer]

Find an Accountant in your area. He can tell you how to start your company (most likely a LLC) and can deal with your tax issues at the year end too. The good thing is that because you now are a company, your costs for your accountant are deductable. I wouldn't count on any depreciation your computer, nor a credit for using space in your house for business - it's just not worth it. Of course, all business expenses are now deductible too - your internet connection, upgrades that you do to your computer that are work related, supplies, etc. Even taking clients to lunch.

Be prepared to keep good records, but start by getting yourself a good ole CPA.

 

[puffkin]

actually, I should have mentioned that I am a CPA

Just don't have any experience in small businesses. I was hoping to avoid the whole LLC thing, at least at first. I don't know how well my "concept" will take off, so I wanted to get started with a very limited cash outlay.

Anyone else?

 

[lovemygoofy]

Whatever state you are in should have some sort of program called Starting a Small Business or something to that effect. They can give you all the information you need to start up the business. For example, at the university here in TN where I work we have a dept called TN Small Business Development Center. She is a one women dept but that's okay.

 

[grlpwrd]

To get you on track to actually set up a business...

Here's the site for the PA Small Business Development Center:
www.pasbdc.org

Here's the site to open a business in PA:
http://www.paopen4business.state.pa.us/paofb/site/default.asp Here's a direct link to the FAQs: http://www.paopen4business.state.pa.us/paofb/cwp/view.asp?a=3&q=441199 and from there is a link to obtain a FEIN (aka EIN).

Of course, if you work out of your home that would also mean you'd have to go thru your municipality, too. Check your zoning laws and ordinances and often you need to file with your city and pay a fee. Of course, YMMV, but certainly check to be sure if that's the case.

HTH

 

[AboutTheMouse]

You sound just like me about a year ago.

I currently own my own consulting business. It is small, it is something that I do part time, and I am very profitable. I work from home and my work is done completely around my kids schedule.

To start, you need to figure out what business form to be. Options are a sole proprietor, corporation, S-corp, LLC, partnership, etc. Each has its advantages and disadvantages regarding taxes, liability and cost. If your work has any risk to it (meaning what if a client sues you), you need to consider what the ramifications are. The type of business that you form can affect whether a client can take all of your personal assets (house, car, etc.) if they are successful in a court action.

As for me, I formed an S-corp. The advantages are that the income and expenses are counted on my personal tax return and my personal assets are protected should I be sued. The disadvantages are the paperwork - annual tax returns, estimated tax payments, payroll calculations, etc.

There are a lot of resources on the web. Check out www.sba.gov or your state's home page. Look for resources for small businesses. Check out business formation books from the library. Also www.irs.gov has resources for starting a business.

S-corp formation for Illinois was relatively simple. Had to first file Articles of Incorporation with the state and have them recorded at the county. Applied for federal tax ID number (FEIN). Applied for state employer number. Applied for S-corp status with IRS. I think I spent less than $500 to do it myself. I think an attorney handling the paperwork would have cost around $1,000 plus the filing fees.

Good luck with your new endeavor! Do a little research and you, too, can do it!

 

[longboard55]

You don't need a tax id but seems more professional and easy to obtain. I would just do solo proprietor, much easier. You probably would need a fictitious business name filing that you get through a newspaper to get a bank account. I would put together a little web site, they are super easy online. Do you really want to use your home address? You might want to get a mail box address even if you work at home, get a dedicated phone number.
The key to self employment is tracking expenses, keep track of everything, we do not want profit that will be taxed.

 

[Lord Manhammer]

I am looking at starting up a small consulting business. It would be a part time type of business. I know how to get clients, I am just not sure what I need to do to start an actual business?

I have a name for the business. Can I just apply for a Tax Identification Number or would I need to do more than that? It would just be me doing the consulting, and there would be limited assets involved, mainly just my home computer.

Any suggestions on things I should consider before starting this business. Thanks in advance.

FWIW I co-own an IT business which we have listed as a C-Corporation. We got our TIN from the state (not very expensive) and then our business bank accounts (which you'll need to keep funds separate). We hired someone to design our website. This is essentially how we started up. If you need contracts or other paperwork drawn up, I'd also suggest having a corporate attorney on speed dial.

 

[Bianca and Bernard]

Y'all...

It's been almost 10 years for OP. Either they figured it out, or they didn't.

 

[_19disnA]

^^ For sure. 18 yr old thread revived by someone trying to advertise their consulting business................LOL.

 

[Cannot_Wait_4Disney]

 

[_19disnA]

Good video...........common list of the buzz words most frequently used by 'management' consultants............LOL.

 

[Cannot_Wait_4Disney]

^^ For sure. 18 yr old thread revived by someone trying to advertise their consulting business................LOL.

I've heard of cold leads before but this one's absolutely frigid.

 

[Robbie Cottam]

you can use sites like legal zoom, but I personally spend the 500 dollars and go talk to an attorney in you home state....

 

[MillauFr]

Y'all...

It's been almost 10 years for OP. Either they figured it out, or they didn't.

Yep 18 years old. Usually these threads get resurrected by the newbies not veterans like Longboard.

 

[soccerdad72]

Yep 18 years old. Usually these threads get resurrected by the newbies not veterans like Longboard.

The post that resurrected the thread (an obvious spam post) was deleted.

 

[goofyernmost]

If you need consultation from others to start a Consulting business, perhaps you aren't ready to make that big step quite yet..