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New To Consulting Presentation

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If your thinking of starting a career as an independant contractor; this is a must watch powerpoint.

If your thinking of starting a career as an independant contractor; this is a must watch powerpoint.

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  • 1. It’s Your Talent – Own It! Making the Transition to Independent Consulting
    • Gene Zaino President and CEO, MBO Partners
  • 2. 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
  • 3. Is Consulting Right for Me?
    • Successful independent consultants have tenacity, determination, talent, and an entrepreneurial mindset.
  • 4. 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
  • 5. 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
  • 6. The Oxford Dictionary
    • Oxford defines Independent as follows:
    • “ Not dependent on or controlled by another person or thing.”
  • 7. 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
  • 8. 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”
  • 9.
    • “ 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
  • 10. 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
  • 11. Competition for Talent is Heating Up Throughout the United States 5/29/2008 OURPUBLICSERVICE.ORG
  • 12. 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
  • 13. 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
  • 14. 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
  • 15. 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
  • 16. 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
  • 17. 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
  • 18. 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)
  • 19. 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
  • 20. 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
  • 21. 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?
  • 22. 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)
  • 23. 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
  • 24.
    • 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?
  • 25. There Are Other Options
    • Consulting companies
    • Staffing agencies
    • Portable Employer of Record firms (PER)
  • 26. 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
  • 27. 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
  • 28. 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
  • 29. 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
  • 30. MBO Partners 13454 Sunrise Valley Drive, Suite 550 Herndon, Virginia 20171 1-800-220-0469 www.mbopartners.com