dec14th
Business Management

Gene Zaino (US) - Running Your Business of One: Consulting Tips and Tools

Independent IT consulting is one of the fastest-growing sectors in the jobs market. Businesses are operating with a leaner workforce and relying on contractors for flexibility, and specialized skills. This new project based economy has created an environment ripe with opportunity for IT professionals who have the skills, tools and fortitude to succeed as an independent professional – or “IC”.

Becoming a solopreneur, or business of one, is attractive for a number of reasons. Working independently offers experienced IT professionals freedom, flexibility and increased personal income. As a consultant, you can also create your own work-life balance by choosing the clients and projects that work best for you. However, it takes more than experience in technology and an impressive database of contacts to succeed as a consultant.

Many IT professionals that take this step and become their own boss encounter risks and challenges. Without the proper resources and tools to manage the details of running an IT consultancy, it’s easy to become distracted and lose valuable billable hours.  Here are four business process areas that ICs should watch closely:

1. Finances. Billing, invoicing, expense tracking, reporting and paying taxes are critical functions that require a defined system. Attempting to manage these tasks will distract you from your core expertise and affect your ability to get paid in a timely manner.

2. Contracts and Compliance. Consultants and hiring companies are at risk of audits and severe penalties if systems are not set up correctly to manage these administrative details and compliant tax remittances – in fact, many firms won’t even work with independent consultants unless the right structure is in place. Business insurance is another critical protection for ICs dealing with large organizations. The right insurance plan will address workers compensation, general liability and professional liability—freeing consultants to focus on their work, not worry about ‘what if’ scenarios.

3.  Billable Rates. One of the biggest challenges facing new consultants is setting their bill rate. There is a science as well as an art to setting a rate that is profitable and competitive. The science requires an understanding that profit margins, expenses and even insurance costs all contribute to your billable rate. The art is consideration of the market value of your skills, the economic climate, and the value of your competition.

4. Benefits. Researching and finding benefits such as health insurance and retirement benefits are a part of making the transition from an employee to consulting. Consultants can spend an inordinate amount of time researching and evaluating plan options which differ greatly than group plans offered by corporations.

Partnering with companies, like MBO Partners, that offer an infrastructure for managing the risks and administrative details outlined will help alleviate stress and allow you to focus on your core IT expertise. Securing assistance with complicated items such as contract administration, business insurances, health and retirement benefits, expense management, tax withholding, and more; only makes it that much easier for independent consultants and businesses to work together.

An IT professional’s best focus is not on business infrastructure, but on securing their first contract and reaping the financial and lifestyle benefits. In a recent study of the independent workforce, of those who struck out on their own only one in five wished to return to traditional employment. And independent professionals reported increased satisfaction – 79% said they were highly satisfied or satisfied with running their business of one. The good news for professionals that want to take advantage of this market is that there are tools and resources to help them step out on their own and compete alongside larger firms.

Gene Zaino
is the President and CEO of MBO Partners, a leader in the $250 billion-and growing independent consulting section in America.

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