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How to Get Started in Consulting - Part 1

Once you decided that a career in consulting is right for you, there are a few things you can take care of from the get go to ensure a smooth transition into the world of professional consultancy. Like we mentioned earlier, organization plays a key role in all phases of a consultant's career. From the early stages of planning the business structure and types consulting you wish to engage in, to the execution of daily workflow, to the discipline required to keep legally sound income and tax records, being a consultant can mean being efficient and thorough in the areas of organization and planning. Whenever possible, it is recommended to plan as far ahead as possible for matters that can be planned ahead for.

Establish your businesses' legal/fiscal foundation. It is in your best interest to formalize and solidify your business structure right from the onset. This is in the interest of having a well thought out plan both legally and for tax purposes. In a nutshell, the three basic ways you can set up your business from a legal standpoint are:

1. Sole proprietorship: This is the easiest to accomplish from a legal point and requires the least investment of time and funds to do. However, it should be noted, that sole proprietors accept all business related liabilities at a personal level. To put this in another way, in the eyes of the law, the individual and the business are for all intents and purposes the same entity. So, for example, if in the course of your business dealings you come under legal scrutiny for any reason (being sued by a client, for instance), resulting litigation may be able to hold your personal finances and assets as damages to the plaintiff in the case. To put it bluntly, you are putting your butt on the line when you engage in a sole proprietorship.

2. Partnership: This approach is similar to sole proprietorship, but involves two individuals who share legal and fiscal responsibility for the business together. This partnership can be instituted in a variety of ways and typically involves the interested parties negotiating a contract that elaborates legally on the particulars of the partnership "deal". For example, there are "silent" partnerships, which involve certain parties within the contract holding all legal obligations but not participating in the actual running of the business.

3. Corporation: A corporation is the most legally and fiscally complicated method of starting a business, but has its benefits as well. When a business is incorporated it becomes a legal entity of its own. Incorporation allows for businesses to take greater strategic risks than sole proprietorships and partnerships because they provide for a legal and fiscal layer between the corporate entity and the individuals involved in the business. Under normal circumstances, someone starting out in the consulting world will not have the need or the resources to incorporate, but it is common for consulting firms (such as Booz-Allen-Hamilton, for example) to establish their business in this manner.

Build a thorough business plan. It is crucial to have a sound business plan from the very beginning of your consulting endeavor. A good rule of thumb is: If you can plan for it ahead of time, by all means do so. This includes, but is not limited to:

1. Pre-establishing your strategic approach for running the day-to-day aspects of the business. This includes considering items such as: Securing a business credit card, establishing standard hours of operation, deciding whether or not to invest in purchasing certain tools as opposed to renting services or tools (like choosing between buying a laser printer or using a service like Kinkos).

2. Marketing your business. Deciding how to market your business in the most cost effective way possible. Will you need business cards? Would it be in your best interest to hire someone to design and develop a website for you? How about radio or television advertisements? Newspaper ads?

3. Establishing principal funding. Will you be starting this business from scratch out of your own pocket? Are you interested in acquiring funding from an "angel investor"? Do you have friends or relatives who may be interested in getting in on the ground floor with an initial investment based on your reputation and experience, which could later pay off for them in the form of a return on their money? Perhaps you may want to offset the initial investment by applying for a small business loan at a financial institution. You will also certainly want to investigate grants, tax credits, and loans made available by the federal, state, and municipal government which are often made available to individuals starting a new small business (particularly if you live in the United States, which has many programs available for just this reason). These are the types of things you may want to take a closer look at when deciding on how to find your venture.