Thu, June 9, 2005 - 4:42 PM
I fully agree with the cash for a year. If you're just making the jump into consulting, you should apply for an SBA microloan, or a line of credit that would equal a year's living expenses.
What I'd add to that rather large pile of information :
- Get an accountant. My accountant saves me several 10s of thousands of dollars every year.
- Avoid all of the elance/subcontract/guru.com places. They've degenerated into a place to find $3/hour offshore programmers for simple jobs
- Google Adwords is effective
- A Layer. Get one.
- Incorporate. The $800/year "privilege to get screwed by california" business tax is not a big expense when it gives you the credibility of having a corporation to customers
- Get business insurance. $500-$1000 a year for $1M in liability + E&O is a good thing, and it helps to let some harder sell customers that you have that.
- Network. You'll get more business talking to your friends than any advertisement, job posting site, or public bid site.
- Bill high . My rule of thumb was always to bill 2.5x what you made as an employee. If you made $100k, you have to assume you cost your employer another 35%, which means you cost your employer $135k.. Most consultants I know who are independent work about 1000-1250 hours per year.. billing at 150/hour should maintain your lifestyle and give you money for tangible expenses like computers, office space, insurance, business fees, lawyer & accounting fees, marketing materials, beer.
