 how many of you are using MySQL? Anybody? Anybody? Anybody running down the Windows box? Windows box? Linux boxes with MySQL? Anybody? Alright, thank you. Oh, my name is Dennis and we're gonna talk about basically turning some of your skills into a consulting business if some of you are interested in that. So we're gonna cover quite a bit of ground so let's jump right into it if you don't mind. Sure. First off, I want to start with a disclaimer. I am neither a lawyer nor an accountant and I'm not here to give you any sort of specific advice regarding those parts of starting a business. Feel free to ask me questions afterwards. I can speak from experience but again, anything containing these slides, I am not a lawyer nor an accountant. As far as what I've been doing for the past two years, I've been running my own consulting business, basically doing web application, database development and also a bit of writing. So basically what I have here and put together here is based on my experiences as far as the steps I took, some of the pitfalls I had and also some of the rules of thumb that I've seen develop. So first, I'm going to talk about is, you know, why we want to do consulting in the first place. Next, as far as keeping it all legal, what we need to do with taxes and business organization and things along those lines. Then we're going to talk about when you start out, what are you going to need? What are the steps you need to take? And then your first 100 days as far as what steps are involved, how do you find clients, things along those lines. A step after that is how do you keep those clients happy. As a consultant, as an independent consultant, you're going to live and die by your client list, so it's very important to keep that client list strong. Next, we're going to talk about other things you can do to help your business, help yourself. I'm going to share with you some keys to success that I found in the past two years. I'm going to share some resources with you, and then I'd rather just open it up to the floor for any questions you may have and also questions afterwards if you see me walking around and whatnot. So jumping right in, why should we consider consulting in the first place? I would imagine that most of the people in here are employed now, so why should we even consider this? Part of the reason I think that you should be interested in this is demand, quite frankly. It's no secret that mainstream media is constantly reporting on security breaches and viruses and whatnot, so there really is a strong demand for your skills as a security specialist. I don't think I have a client on my roster that hasn't at one time asked me for some sort of recommendation for a security expert, because companies would really rather hire a consultant and face the media embarrassment and the cost involved with having a break and whatnot. So companies are willing to spend on security, and that's something that it's your opportunity to capitalize on that. Next is be your own boss, and that pretty much speaks for itself. Get the chance to work at home, set your own hours. And just because you want to be your own boss doesn't mean you have to run a .com. There's many, many independent consultants like myself working along with .coms and other companies that are necessarily internet based and being very successful at it. So there's opportunities there. Next benefit I find is your tax rates. Being a self-employed individual is one of the best ways to lower your taxes as far as I know, and all the deductions you get. Any computers you buy, network equipment, those are all tax write-offs in the end. You get yourself a good accountant, and they can help you with that as far as identifying what parts of your home you use and what parts of your own assets you use can really lower your tax rates. Consulting is also a really good way to expand your skill set. Clients will demand different things of you and in different time schedules, which you will have to keep. And I think you'll find that when you're working by yourself, you'll develop a motivation to expand your skill set and hopefully improve yourself as well as help your clients along. And finally, one of the benefits of consulting and really being self-employed is you can follow other pursuits. I'm sure some of you here have other interests that go beyond computers and whatnot, or perhaps specific computer interests. For me, that's other pursuits I've taken up is writing. I've worked with Rocks a little bit, helping in co-authoring books and also speaking at conferences like this. This is something that I enjoy. Naturally, you will find pursuits as you have more free time for yourself that you will want to pursue. So the first thing we should talk about is keeping it all legal as far as what paperwork and documents you're going to need. And actually, you should take note that these steps are in order. You will need, for example, you'll need to set up your tax information before you go ahead and get your business name. So as I go through these, keep in mind that this is actually a step-by-step list. After making a decision to go out on your own, you need to go ahead and establish your company and you need to mentally figure out how you're going to do that. Are you going to have employees or are you going to work by yourself? Is there a co-worker or a friend you're going to go on partners with? That's also important. And also, are you going to incorporate? Are you going to become a corporation or are you going to keep it as a cell phone company? There's different liability issues involved in that. That's something that you need to decide. Next is taxes. Taxes, the main thing you need is what's known as a federal employee ID number, also known as FEIN. Basically, it's a Social Security number of four companies. It's a way that IRS uses to track companies and the taxes owed and whatnot. After that, you need to investigate your city. Find out if your city charges taxes on companies. Some cities' tax companies, others don't. That's something you can find out from your local city hall. Licensing, also something related to your city hall. You need to establish your business name and register your business name with the proper offices. In some cases, again, depending on the city you live in, you'll need to be licensed. You'll need to have special permits. If you're running it out of your home, you may not have to have as many permits. It really depends on your city. When I start talking about taxes and the IRS and licensing, I know it may sound a little complex. But as far as the IRS forms, you can literally do it over the phone. You fill out the form, you keep it in front of you, you call up an 800 number in Philadelphia. Ten minutes later, you have a federal employee ID, so it's really not an involved process. As far as your business name and license is, it's just a matter of spending a morning at city hall. You go down there on a Monday, you go to the information desk and they can guide you through. And really, within the days worth the work, you can take care of your taxes and your licensing. It's really quite simple, even though you do have to deal with forms and whatnot. Next, your bank accounts. Bank accounts have a variety of options. You can go with just your local bank. As long as you have your federal employee ID number, that's really all you're going to need. Nowadays, there's also brokerage offices offering business accounts that have different interest rates and whatnot. That's something that you can investigate on your own, but really, your local bank will do just fine. As long as you have something that's separate from your own personal accounts, that'll really help you in the end for tax season. And finally, the last thing you need to take care of is insurance. Some states have legislation in the works that would require consultants to be insured. If I remember right, California is one of them. Other states don't really care. So it really all depends on where you live and the laws in your area. As far as starting out, there's a couple of things that perhaps you should consider. What's your current employment like? In many cases, your current employer can make a great first client, depending on how vital you are to their operations and how your relationship is with them. Also, your finances and your current lifestyle. Some of you in here may have car payments. Others are not. If you live with your parents or share living expenses, that could certainly help. You really need to take into account as far as what your monthly expenses are and your savings and whatnot to help you along with that. Insurance, and by insurance, I mean health insurance at this point, when you leave your employer, you also leave your benefits unfortunately. So benefits are something you need to provide for yourself. Health insurance can run you anywhere from 50 bucks a month to $200 a month, but either way it's something that's vital and you should have. And there's other factors as far as your own personal relationships. I had a friend in Connecticut who was about to start his own consulting business and then found out he was going through a divorce. Probably not the best time to start a consulting business. So really all depends on your own personal situation and your finances and how you want to go about it. Next, you need to see if you need a lawyer or an accountant. Personally, I think you can do it without either one of those. Obviously, it can also help you to have a second hand there, have a lawyer look over your forms and whatnot, but you can do it on your own. That's a personal decision, so people just feel more comfortable working with a lawyer or an accountant. And then finally, you can have investors. That really all depends on how involved you want to get with your business. If you're going to have your own storefront, where clients are going to come in or you're going to work out of your home, there's quite a difference there in what funding you're going to need. Question? I have a friend of mine. He started his own business. What he did was work out with a lawyer and an accountant. He said he was definitely a bus to trade services, to do a service for them. He had a check to do a service back when he was building his own stuff. For those that didn't catch that, his comment was regarding getting a lawyer and accountant. It is possible sometimes to trade services, your services for there, and there are some tax benefits involved in that. And I'll get into that just a little bit with networking and your clients and what not, but that's a good point. Leading up from the discussion on investors is your workspace. Again, are you going to have office space? If you're going to have a partner, are you going to have maybe three or four people working for you? Yeah, you should look into it. If you're going to start on your own, just have it a sole proprietorship. You could probably do it out of your home or an extra bedroom or what not. You're also going to need just general supplies as far as notepads and pens and pencils, things like that. And then of course, all your equipment. You're going to need your computers, any extra phones and phone lines you're going to need, and miscellaneous things. Maybe you need to upgrade your internet connection, things along those lines. Again, these are all tax write-offs and maybe a big expense to begin with, but there are benefits towards the end. Your total startup time is going to be affected by your decisions. If you're going in with a partner and you need to wait for your partner to find a good stopping point to leave his current job, that's going to affect it. If you're on your own, you could probably start it by yourself overnight. As far as how I did it, how I went about it, just to give you an example, I came out of college, I worked for a company for three months, completely hated it, and I quit. Next day, I figured I had a couple of bit of savings, extra phone line, upgraded to a cable modem, and got a website going, and we'll talk about establishing a presence, but for myself, this total startup time was about a week's worth of work, of dealing with paperwork and whatnot, about a $1,500 investment in equipment and computers and things along those lines, and literally within a week, I was to a point where I could start looking for clients and whatnot, and again, that can be as short as a couple days, or it could be a couple months for you depending on your savings and how you want to go about it. As far as the first hundred days, that's a good question. This question was if the startup phase can be done as you're finishing up your job in a part-time basis, that's possible, but you will have to take some time off during business hours to, again, go to your city hall and take care of that kind of paperwork, but sure, it's definitely possible to go ahead and do that on the weekends and during your other free time. Definitely not impossible. Please. This question was regarding security companies, specifically, is that right? Where, starting it in your home or as opposed to the store front. I really couldn't imagine a situation where there'd be a big difference. Perhaps in the store front it might be easier to get the extra phone lines and connections you're going to need as opposed to a residential area because of wiring your city, but otherwise I couldn't think of a reason why they make a difference. No, I don't think that would make a difference. Most of the time you'll be requested to travel to the client side as opposed to the reverse, so it's not like you'll have to entertain clients in your home very often. But for security purposes, I think they understand that there's a inherent need to be off-site. And I really don't think it would make a difference, at least to the clients I've come across that would base their decision on that. Please. Right. Well, actually that will depend on a client by client basis. Some clients will hand you a 20-page NDA, other clients will hand you a one-page NDA, and others don't really care. So it really depends. And I handle that person on a client-by-client basis during the startup phase when you're pitching your client, they'll make sure to tell you what their requirements are. But really, it varies quite a bit. Please. Yes. I'm sorry, did you catch the last part? Right. I definitely don't disagree with your points. I did go about it with an accountant, but others can choose not to. It really depends. As far as the other points of liability and whatnot, again, I really think that depends on a client-by-client basis. It certainly doesn't hurt to talk about that, and it depends on the documentation they give you. Sure. Sure. I would have a hard time presenting an NDA to a client. It usually doesn't work that way, because they obviously have more consultants than probably you do clients, and they have a very standardized process of how they go out with their NDAs. So I'm sorry? I'm sorry, didn't catch the first part. But I think they'll say no a lot more than they'll say yes. Okay, I'm sorry, I'll try to repeat his comments. Okay, to repeat, his comments are regarding a non-disclosure agreement, an NDA, and advocating perhaps coming up with your own non-disclosure agreement and presenting it to your client, as opposed to them presenting you with their non- disclosure agreement. His points are valid, and it is worth trying, but I would disagree with that personally. Certainly it depends also on what type of clients you will target. I agree with you that larger clients are probably going to turn you down a lot more than the smaller clients. At the same time with the smaller clients, perhaps they've never had an NDA agreement before, that's very common, or in some cases they'll shy away from that. It really depends on how small of a client. Some people still like to do business with a handshake, maybe not the best way, but it does happen. Please, just to recap, the question in the back was regarding NDAs as far as who's protecting whom, are they requesting more protection from non-competes and whatnot, or are you requesting protection that they won't disclose your methods and whatnot? As far as presenting your client with an NDA that protects your operations and your methods or in what not, I'm sorry but I would have to disagree. I think that if you present your clients with an NDA with those involved, you will probably lose more clients than you will get in the end. Also, most NDAs, as far as what the client will present to you, the most important part, again, addressing the question in the back, is probably on the non-competes. Non-competes are common in NDA where they will ask you to not compete with their competitors or subsidiaries of their competitors and whatnot, or even, in some cases, their clients. Commonly, it's usually a year's worth of time where you can't directly work with them. That's probably the most important part for you as a consultant, but again, I would have to disagree that presenting your client with an NDA is probably a deal-killer more than it is a deal-maker. Please. Unfortunately, the man doesn't imply an exclusive market. Any contractor you have, when the client is going to put an RFP out there, there's certainly going to be more than your bid. In that negotiating process, that's something that they will look at and again, I think it would probably cost you more clients than it would gain you. Yes, we have. Okay. Let me get the question in the back as a gentleman is a very patient, please. Perhaps you can discuss this afterwards. I'll definitely be around and I'm sure other attendance will be around. I'd just like to run through the rest of it. I think we're running really, really short on time. Sorry to interrupt you like that, but let's go ahead. Your presence, pretty much self explanatory. Phone, you want to have a dedicated business line. Your website. Again, your website can really serve your sore front nowadays and doesn't have to be that fancy who you are, what your experience has been like and what you're looking for. Initially, you won't have a client list, but once you do, you will want to put it up there. Your client list will sell you more times than anything else you will ever do. And then, of course, search engine registration. Register yourself with the engines out there and also there's a lot of consulting directories out there that you want to register yourself with. Business cards, probably one of your best form of advertising. The only advertising I did when I first started out was I just handed on my business cards like crazy. You call up old friends in college, you let people know, hey, you know what? I'm on my own now. This is what I can offer for your company. Call me if you need something. And really, in some cases, that can be the only type of promotion you're going to have to do. Other forms of promotion, a lot of options. You can start off with a big bang and buy a full page ad and a local tech journal or something along those lines. Or again, you can just do it by word of mouth, handing your business cards out, coming to conferences like this. It's really up to you. Either way, again, I think you'll see enough demand out there where you'll at least generate some interest just by letting people know that you're on your own and this is what you can offer. As far as keeping clients happy, definitely don't over promise. Try to stay within your boundaries of your skill set. I think you'll appreciate that more than you just saying, you know what, I can't offer that service for you. That will probably keep them a lot more happy. And definitely don't underperform. It's always beneficial to set up specs as far as what your client expects from you and you make sure that you meet those to the T. Usually when I give my clients specs of what I'm going to return to them, I do it in bullet point format. That way you can really lay it out and say, hey, look, this is what I'm promising you and this is what the finished product does. So our business is complete. Be available. I can't tell you how many times I've won contracts just because a client is fed up of not being able to get their consultant on the phone. Get a cell phone and return your calls. That's something that's very simple will really go a long way. Deadlines. Deadlines are very important. Your client will make other deadlines based on the deadlines you give them. If you can't meet it, tell them, hey, look, you know what, we're a week out. I'm not going to make next week's deadline. The communication there's a lot more important than, you know, showing up and not having a finished product. Finally, network for your client. I think you'll find that big clients will come to you and outsource projects intentionally just based on the fact that by outsourcing to you, you can get them in contact with other clients and whatnot. I've had clients come to me and ask me to work on a project for them just because they want an introduction to another client I have. That's just the way business is done. So you'll find that just by being willing to network for your client, you will get other contracts in the end. Billing. Ask your client they want a project or an hourly rate. Very important and also very important to your bottom line. Invoicing, be diligent, have your policies. I personally invoice on the first and the 15th of the month. You may want to do it monthly. You may want to do it weekly. Either way, let your client know. Unfortunately, one of the parts of consulting is you won't always get paid. You have to write off. You have to sue clients. That's unfortunately a way to do business. But it never hurts to be nice. Hey, listen, you know that invoice essentially last week, you know, could you find it? It was a net 10 terms and it's due tomorrow. It never hurts to just give it a call and find out what's going on. Meet your client's needs as far as try to anticipate their needs and what they have now. If they're looking at starting certain services or certain websites, do a little bit of research on their part. Find out what's coming down the road and as far as technology wise and what they can use. And then finally, client maintenance. If you don't know how to golf, start taking lessons now. Clients will expect for you to take them out to dinner, you know, gifts at Christmas time and whatnot. Never hurts and it's part of doing business. An invitation for a round of golf on Friday. Common ways of doing business. As far as other things you can do as an consultant, network. Places like this are a perfect part for it. List serves, news groups. Get out there and just let people constantly know what you're doing. Things like this can happen to new contracts, potential partners, new employees or even new subcontractors. There's other people just like you doing consulting that can do other things you can't. Form alliances. Use their skills, bid on contracts together. This is how you build up your business and start bidding on bigger contracts. You also need to maintain and expand your skill set. Times change and the skills you have now aren't necessarily going to be in demand five years from now, so you need to make sure that you keep yourself relevant. And follow your other pursuits. If you have other interests, follow them. That's one of the benefits of being self-employed. Really quickly, some keys to success. Keep your discipline. Being self-employed doesn't mean you don't have to work. Nobody pays you for sitting around and you'll very quickly find there's a difference between working hours and billable hours, so it does require quite a bit of discipline. Again, keep your clients happy. Communicate with them. Let them know you're available for them. Maybe you don't always return calls the same day, but let them know, hey, I return my calls in 24 hours, and most clients at least want to know when they can expect to call back. Always look for an opportunity for yourself and for your clients. New technologies, new companies out there, new potential partners, always keep an eye out. Rules of thumb, when I first started out, one of the best pieces of, well, when I first started out, I spoke with other consultants, and they said, well, I'm not going to pay your rate and never, ever change it. Companies will tell you they won't pay your rate are lying to you, and you will have Fortune 100 companies tell you, oh, your rate's too high. Keep your rate, set it, work with your client on payment options, but make sure you never let anybody tell you your rate is too high. In voice payments, again, you won't always get paid. Research your client ahead of time. It helps. Finally, it always seems harder than what it is. Don't let the information overwhelm you. Again, when you start talking about taxes and IRS, it starts to get a little up there, but it's really not that bad. Some resources for you, realrates.com, that's a very important site. Basically, it's a consultant site where consultants go in and they report their latest contracts and what they're getting paid. It helps you set your market rate and it helps you go to your client and say, there's five other consulting companies charging this rate. This is my rate. A very important site. IRS, I think it's a very helpful site. A lot of their documents are downloadable in PDFs. It saves you trips to the library and whatnot. And finally, Small Business Administration, the SBA. A lot of good resources out there for business plans, financing, and just general advice. Excellent website. Definitely recommended if you were thinking of starting on your own. I'll skip over because I know we're running short. And again, just as last point, it's really easier than you think. Don't let it overwhelm you. You can do this. It's not rocket science. It just takes a little time. So I appreciate you coming. Thank you.