The Business Side Amy Janczy Oct. 11, 2006 of  Tech Comm Contracting
4   Main Points <ul><li>1. think : Need for a clear focus/plan </li></ul><ul><li>2. start : Determining form of business; ...
1. think :  focus  and  plan <ul><li>Decide what you will and will  not  do </li></ul><ul><li>Choose your target customers...
FastTrac in Milwaukee   ( www.fasttrac.org ) <ul><li>New Ventures  (bus. plan dev.)  Bryant & Stratton College Contact Nam...
2.  start :   business formation <ul><li>LLC, sole proprietor, corp.? </li></ul><ul><ul><li>LLC formation is easy, no real...
3. contract :  sign what? <ul><li>Not “Plain English”; get a lawyer!   </li></ul><ul><ul><li>example: imdemnify and hold h...
W2 vs. 1099 <ul><li>FICA/SS taxes: 15.3% - split this if W2 so $46.20 as W2 equivalent to $50 as 1099. </li></ul><ul><li>B...
4. bill :  get paid   <ul><li>Hourly vs. fixed cost </li></ul><ul><ul><li>“ Mission creep” can make you lose out on a fixe...
<ul><li>Setting rates.  </li></ul><ul><ul><li>Need to decide how much you want to make, and know what market will bear. Re...
Final Thoughts <ul><li>Don’t go it alone. </li></ul><ul><ul><li>Chapter’s Contracting SIG – Kathie Gorski </li></ul></ul><...
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The Business Side Of Contracting

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Business Side of Contracting presentation for STC Wisconsin Chapter

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The Business Side Of Contracting

  1. 1. The Business Side Amy Janczy Oct. 11, 2006 of Tech Comm Contracting
  2. 2. 4 Main Points <ul><li>1. think : Need for a clear focus/plan </li></ul><ul><li>2. start : Determining form of business; startup needs </li></ul><ul><li>3. contract : sign a good one </li></ul><ul><li>4. bill : How do you set rates? Hourly vs. fixed cost, perils of payment terms </li></ul>
  3. 3. 1. think : focus and plan <ul><li>Decide what you will and will not do </li></ul><ul><li>Choose your target customers </li></ul><ul><li>Determine your working hours, conditions, limitations </li></ul><ul><li>Consider writing a business plan </li></ul><ul><ul><li>SBA’s FastTrac entrepreneurial program available at UW campuses – </li></ul></ul><ul><ul><li>One of the key points is your “ USP ” unique selling proposition </li></ul></ul>
  4. 4. FastTrac in Milwaukee ( www.fasttrac.org ) <ul><li>New Ventures (bus. plan dev.) Bryant & Stratton College Contact Name: Michael Kuharske Contact Email: [email_address] - </li></ul><ul><li>Tech Venture (tech based biz) UW Milwaukee http://www3.uwm.edu/sce/course.cfm?id=8802 . </li></ul>
  5. 5. 2. start : business formation <ul><li>LLC, sole proprietor, corp.? </li></ul><ul><ul><li>LLC formation is easy, no real reporting, costs $130 ($25 each yr. reporting fee), can be single-member, considered separate entity, good for marketing. See http:// www.wisconsin.gov/state/byb/LLcompany.html </li></ul></ul><ul><ul><li>Taxation for LLC can be same as for single proprietor: Form 1040 Schedule C. </li></ul></ul><ul><ul><li>Either way, need to pay quarterlies if work substantially (depends on how you file taxes) </li></ul></ul><ul><ul><li>Consider S-corp. if have employees. Workers’ comp. </li></ul></ul><ul><li>business liability insurance </li></ul><ul><li>startup needs / costs determination </li></ul>
  6. 6. 3. contract : sign what? <ul><li>Not “Plain English”; get a lawyer! </li></ul><ul><ul><li>example: imdemnify and hold harmless the Company from any and all claims and expenses” resulting from your not being characterized as an “independent contractor.” </li></ul></ul><ul><li>Create your own contract. Include limits on your liability. </li></ul><ul><ul><li>The client is responsible (and TechCom Plus is not responsible) for the accuracy of the content of a completed project. TechCom Plus shall not be liable, under any circumstances, for consequential, special, or incidental damages, even if it has been advised that such damages may occur. TechCom Plus' liability arising out of this Agreement, whether in contract, tort, or otherwise, shall not exceed the total of the amounts which the client has paid.” </li></ul></ul><ul><li>Don’t sign non-competes </li></ul><ul><li>Are you better off as a W2 employee? </li></ul>
  7. 7. W2 vs. 1099 <ul><li>FICA/SS taxes: 15.3% - split this if W2 so $46.20 as W2 equivalent to $50 as 1099. </li></ul><ul><li>Beware payment terms – trend is for companies to make you wait 90 days for payment! Also will have to spend time tracking and invoicing – many say add $10 if go as 1099. </li></ul><ul><li>IRS 20-point test for independent contractor determination. See http ://www.massachusetts.edu/treasurer/employeevsindcontractor.html </li></ul><ul><li>See Advantages and Disadvantages of W2 and 1099 Status: Protecting Yourself as a Freelancer (i.e. fixed cost contracts) - by Herman Holtz http://www.techwr-l.com/techwhirl/employmentarticles/w2or1099.html </li></ul>
  8. 8. 4. bill : get paid <ul><li>Hourly vs. fixed cost </li></ul><ul><ul><li>“ Mission creep” can make you lose out on a fixed cost contract, if you can’t easily show that the scope has changed. Estimate generously. </li></ul></ul><ul><ul><li>Most contractors discuss an hourly rate but prepare estimates of work that include a “do not exceed” amount and procedure for communicating when this is coming up. This allows client to approve the project cost. </li></ul></ul><ul><ul><li>Make sure client understands what is and is NOT included in the estimate and that work that falls outside scope of estimate will need to be paid for separately. </li></ul></ul><ul><ul><li>Put terms into your contract. </li></ul></ul>
  9. 9. <ul><li>Setting rates. </li></ul><ul><ul><li>Need to decide how much you want to make, and know what market will bear. Remember, only 1/3 or so billable time . </li></ul></ul><ul><ul><li>See “The Meter is Running: Setting Consulting Rates for Independents” - http://www.stc.org/confproceed/2002/PDFs/STC49-00051.pdf#search=%22STC%20setting%20rates%22 </li></ul></ul><ul><li>Payment terms. </li></ul><ul><ul><li>Deposits – 1/3 down, 1/3 at midpoint, 1/3 at end </li></ul></ul><ul><ul><li>Invoice, net 30 days </li></ul></ul><ul><ul><li>Discounts for fast payment are an option </li></ul></ul><ul><ul><li>Paypal for short, fast turnaround jobs </li></ul></ul>
  10. 10. Final Thoughts <ul><li>Don’t go it alone. </li></ul><ul><ul><li>Chapter’s Contracting SIG – Kathie Gorski </li></ul></ul><ul><ul><li>Listservs – TECHWR-L, others </li></ul></ul><ul><ul><li>Other organizations (WORDS, AMWA, IABC) </li></ul></ul><ul><li>Test-drive the lifestyle </li></ul><ul><ul><li>Do a few “side jobs” while you hold onto your FT job. You could also work for an agency to see if you like the level of change. </li></ul></ul><ul><li>No matter what happens, you’ll never have a better boss! </li></ul>© 2006 Usable Writing, LLC

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