CONSULTING TALK Note: This presentation is based on my experiences and knowledge. Some people might disagree with some of my assertions, but thatžs healthy, since we each have our own beliefs and ways of doing things. The techniques I am suggesting are guidelines, certainly not rules. I have disobeyed many of the guidelines that I am presenting here and I have lived to tell about it. Therefore, ždo as I say, not as I do,ž and take my words with a grain of salt. It is important to note that each individual approaches the various aspects of consulting differently. 1. Overview a. What is consulting/what is a consultant b. Who can do it c. Setting rates d. Sample rate calculation (optional) e. How do I get started f. Current job market g. How I work Note: This may be all we will have time for. We can skip around or discuss what ever you want. h. Using an agency i. Responsibilities of the consultant j. Tools of the trade k. Resources for the consultant l. Advantages m. Disadvantages n. Joys o. Pitfalls p. Benefits, taxes, office, and other issues q. Finding new and keeping old clients r. Handling dead time s. IRC Section 1706C t. Questions 2. Dilbert: žEngineers prefer to work as žconsultantsž on project teams. That way therežs no real work, blame is spread across the group, and you can crush any idea from marketing.ž - Dilbert has a lot to say about consultants 3. What is consulting/what is a consultant a. Some expertise the buyer (client) doesnžt have b. Expert advice, special assistance c. Temporary assistance d. Getting up to speed e. Comfort factor for client f. Avoids a lot of overhead for the client 4. Some expertise the buyer (client) doesnžt have a. Individual or small company offering assistance - this is my focus today b. Individual within a larger company - internal consultant c. Individuals offered by a large company or specialty shop to assist other companies 5. Expert advice, special assistance a. May be one time - a few hours to several months b. May be on-going - a few hours per month to full-time over many months (or years) 6. Temporary assistance a. Unusual situations, additional manpower b. Hit the ground running until permanent personnel are hired or personnel trained c. Short-term projects (like proposals) d. Frequently must žmop-upž clientsž messes 7. Getting up to speed a. Help in staffing and starting b. Help in building infrastructure c. Hit the ground running (pix) 8. Comfort factor for client a. Easier, feel confident in expertise of consultant b. Canžt find qualified full-time personnel 9. Avoids a lot of overhead for the client a. Recruiting b. Benefits c. Political problems d. Training e. Easy to switch if things turn sour 10. Who can do it a. Virtually anyone b. Knowledge c. Adventuresome d. Financial stability to weather storms e. Desire and commitment to do it f. Not for everyone g. Availability 11. Virtually anyone a. In theory b. Practically, not necessarily true 12. Knowledge a. Specialized and general b. Related knowledge c. Access to support and knowledge bases (libraries, web, etc.) 13. Adventuresome a. A lot of risk and unknowns b. Will I find enough work c. Can I do the work/will the work be up to my level d. Can I budget my time adequately e. Can I find adequate benefits at reasonable cost f. Can I deal with tax and legal requirements and situations g. Can I/my family deal with the stresses h. Will it provide equal or greater opportunities 14. Financial stability to weather storms a. Second income b. Significant savings c. Can I save/invest d. Benefits in place or known 15. Desire and commitment to do it a. Applies to any business b. Determination to succeed c. Resolve to work any and all hours and resolve to work hard 16. Not for everyone a. Not for faint of heart b. Not for anyone who canžt or wonžt put in hard work c. Not for young family person of childbearing age or with young children d. Not so good for an older person whožs health is poor e. For the big kid who has never žgrown upž (and probably never will), like fire men and women 17. Job availability a. Location - Consulting jobs must be available in your selected area b. Job type - Jobs must be available and plentiful in your selected market/area c. Very tight niche support usually doesnžt work outside of large metropolitan areas 18. Setting rates a. What do you want to earn (a ton of money wonžt cut it) b. What will be your overhead c. What will the traffic bear d. Determining a rate e. Contract type 19. Determining a rate a. Hourly equivalent of what your are worth in a full-time permanent position b. Adjust for vacation, sick leave, holidays, other days off, training/learning ~7 wks , 16% c. Add for benefits - various insurance, retirement, Social Security 7.5% employer SS, 6-15% retirement, $2000-6000 insurance d. Add for overhead time - between jobs, marketing, free time to clients 10-50% e. Add costs for attorney, incorporation, accounting, other professional services $300-3000 f. Add costs of supplies and equipment, increased utilities, etc. g. Add any additional costs - equipment, licensing, memberships h. Subtract tax benefits for home office, home & property insurance, equipment, books, car, etc. i. Add or subtract any other costs or benefits j. Adjust for what traffic will bear or gut feeling - Can vary with the economy 20. Contract type a. Hourly rate - most advantageous to consultant b. Daily, weekly, monthly c. Fixed cost - usually most advantageous to the client d. Retainer - spread clientžs cost out e. Handling of travel and other expenses f. Handling of special costs (H/W, S/W, etc.) g. Minimum time/fees h. Negotiate 21. (XVI.) Sample Rate Calculation (optional) 22. (XIII.) How do I get started a. Have a plan b. Have contracts c. Have financial resources d. Have contacts for help e. Supplies f. Donžt start from a layoff position g. My experiences h. Always keep good records 23. Have a plan a. Make sure you fit all the criteria discussed above b. Make a business plan while still fully employed c. Know exactly what you want to do, where, and how d. Assemble all the equipment and resources needed prior e. Fully understand your potential clients f. Have legal and financial assistance lined up g. Probably should incorporate right away h. A formal business plan may be useful 24. Have contracts a. Bring (purloin) clients from your full-time employer - Be careful of legal and ethical issues here b. Provide services to your former employeržs clients c. Provide services to your former employer or complement them d. Known clients - needers of your services 25. Have financial resources a. Business bank accounts b. Savings or other financial backing until business is good 26. Have contacts for help a. Other consultants who have faced the same problems b. People to help provide services c. Fellow consultants are frequently your best source of help - there is a desire to help each other out even as we compete 27. Supplies a. Supplies - paper, special materials, notebooks, etc. b. Forms - invoices, travel expense forms, etc. c. Books, software, hardware d. Anything else you would use in a F-T position or that others would use to support you 28. Donžt start from a layoff position a. This is what all the žexpertsž and books say b. More difficult, but not impossible - many have done it successfully 29. My experience a. Frequent layoffs b. Did some consulting work for a former employer c. Friends tried to convince me of the advantages of consulting 30. Always keep good records a. Set up a good accounting/recordkeeping system and stick to it b. IRS position is that a consultant or home business is a tax dodge 31. Current job market . . a. Many jobs available, particularly hi-tech - employers having a difficult time filling positions with qualified people . . b. Parallels the market for full-time positions . . c. Frequently employers are hiring consultants for positions they would like to have full-time . . d. Employers must make quick hiring decisions . . e. Trend is to more consultants and more jobs . . f. My experiences - three examples 32. My Work . . a. This is to give you an example of one consultant - there are many, many modes of operation . . b. I donžt mean to brag or give you marketing garbage, just give some ideas . . c. Types of work . . i. Systems analysis, technical writing, software design and development, and training . . ii. Currently I am doing two software developments and developing a training course . . d Marketing . . e. Where I work . . f. Problems . . g. Schedule 33. Using an Agency . . a. Usually requires W-2 as opposed to 1099 . . b. Lower pay . . c. High volume of work . . d. May present travel opportunities . . e. May have benefits . . f. May have training programs . . g. May have parties/social functions . . h. Some are good, some not so good . . i. Can be used full time or as fill-in 34. Responsibilities of the consultant . . a. Ethical behavior . . b. Quality products and services . . c. Provide timely products and services . . d. Treat the client as if they are your one and only client . . e. Full understand what the client wants . . f. Be prompt and follow up on billing . . g. Provide suggestions for improvement 35. Ethical behavior . . - Talk about this later 36. Quality products and services . . a. Seems obvious . . b. Client is dependent on the consultant and expects a total working solution . . c. Issue is the same whether the consultant is an individual on a $1,000 project or IBM on a $10B project, . . and whether the client is the Government, the corner grocery store, or IBM . . d. Consultant must no only do the work, but also provide quality assurance of his or her work and possibly . . of the clientžs work also 37. Provide timely services and products . . a. Try to be accurate in estimates . . b. Deliver on time, even if you have to work extra or ignore another client 38. Treat the client as if they are your one and only client . . a. Use answering machine and check often, voice, pager, answering service . . b. Work hard at making yourself available at any time . . c. Anticipate client needs 39. Fully understand what client wants, not just what they say they want - Client frequently canžt verbalize what they want until the project is done and it either meets or doesnžt meet their unstated expectations 40. Be prompt and follow up on billing 41. Provide suggestions for improvement . . a. Look for ways to improve your clientsž processes, products, and image . . b. Be careful. they may take this as an unwanted negative criticism 42. tools of the trade . . a. All versions of FoxPro and tools or whatever packages you use (may mean several word processors or graphics packages) . . b. Lots of computer power . . c. Access to resources/information/help . . d. Good laptop . . e. Briefcase frequently is your office . . f. Internet access . . g. A good office 43. All versions of FoxPro and tools - or whatever you work with . . a. I currently support FP 2.6 DOS, 2.6 Win, VFP 3.0, and VFP 5.0 . . b. Know third party tools and add-ons . . c. Know procedures, like Codebook - some clients have one set of preferences, some another, and some no . . preferences . . d. Helpful to know related packages - SQL Server, VA, C++, Visual Java, etc. . . e. Visual Studio . . f. Latest updates to packages 44. Lots of computer power . . a. You will probably be doing at least some development (as well as learning) in your own office . . b. Need computer power as great or greater than all of the clients you support . . c. Processor, hard drive, CD-ROM, communications, memory, support applications, databases,etc. 45. Access to resources/information/help . . a. Need to constantly read and keep up with technology, resources, and procedures . . b. Need to look for other consultants, Internet sites, libraries, maintain good library of books,magazines, and vendor literature 46. Good laptop . . a. Demonstrate applications for marketing, training, and reviews . . b. Backup at client site when things go wrong . . c. Quick transfer of data and programs between client computer and development system . . d. Use to debug client problems in a similar environment . . e. Advanced processor, lots of memory, large hard drive, communications, etc. 47. Briefcase frequently is your office . . a. Briefcase and laptop frequently are your office (and sometimes a second briefcase) . . b. Traveling office (pix) . . c. Notes, documentation, related materials, diskettes, cell phone, calculator, supplies 48. Internet access . . a. Access . . b. E-mail . . c. Web page 49. A good office . . a. Adequate desk/work space . . b. Filing space . . c. Access to equipment . . d. Quiet . . e. Access to books and reference materials . . f. Well lighted . . g. Office should be comfortable to work in for long periods 50. (IX.) Resources for the consultant . . a. Marketing . . b. Benefits . . c. Technical resources . . d. Associations . . e. Specialty stores . . f. Office space 51. Marketing . . a. Agencies . . b. Other consultants . . c. Advertising 52. Benefits . . a. Professional organizations, like IEEE . . b. Specialty groups, like NASE . . c. Insurance and investment companies are taking more interest . . d. Banks and mutual funds for retirements 53. Technical resources . . a. Internet . . b. Bookstores . . c. Public libraries, university libraries . . d. Other consultants . . e. Electronic bulletin boards . . f. Vendors . . g. Clientžs libraries . . h. Technical journals . . i. Trade shows, such as FOSE and Comdex . . j. Vendor presentations . . k. Special presentations, such as those put on by Washington Technology . . l. CBT programs . . m. Professional training programs 54. Associations . . a. PAFOX . . b. CPCUG . . c. AHBB . . d. Chambers of Commerce . . e. IEEE Consultantžs Network . . f. Washington Apple Pi for Apple/Mac users . . g. Washington Independent Computer Consultants Association (WICCA) . . h. Others? 55. Specialty Stores . . a. Some stores and business focus on serving the small business . . b. Staples, Office Depot, and others specializing in serving small businesses . . c. Mailing/copying/etc. stores . . d. Copying, printing, etc. shops - Kinkožs . . e. Support of small businesses and home offices is becoming more common - a growth industry 56. Office space . . a. Home office . . b. Shared offices . . c. Offices geared to the very small business (like David Asheržs) . . d. Support by another company or local government . . e. Office condominiums 57. (III.) Advantages . . a. Independence . . b. Big $ . . c. Stability . . d. Long hours, hard work at something you like . . e. Many people look up to consultants . . f. See good and bad companies in action . . g. Control of benefits . . h. One job/many jobs at a time . . i. Learn/do new things . . j. See the world . . k. Availability to deal with family and home problems and activities . . l. Meet new people 58. Independence . . a. Can take or leave jobs . . b. Be žyour own bossž . . c. May be easy to take leave whenever you want it, and can take as much leave as you can afford 59. Big $ . . a. Big $$ (pix) . . b. Potential for making lots of money . . c. In programming (FoxPro) clients are usually willing to pay a lot . . d. Work long hours to increase income . . e. Generally work by the hour or day - donžt have to work long hours at 8 hours pay . . f. May save on commuting time and expenses 60. Stability . . a. Control your own destiny . . b. Know when a job will end (usually) and can plan for it . . c. Work several jobs at once so that loss of one job doesnžt have a major financial effect . . d. Layoffs of full-time personnel are frequent in computer industry and can be tough 61. Long hours, hard work at something you like . . a. At least most of the time 62. Many people look up to consultants . . a. Super consultant (pix) . . b. Ego trip . . c. Can lead to special treatment by client employees . . d. Many people will come to you for advice and assistance, frequently outside of your primary area ofexpertise 63. See good and bad companies in action . . a. Learn tricks and procedures to help improve your own business . . b. Learn tricks and procedures to help your clients improve their business 64. Control of benefits . . a. You can easily tailor your benefits . . b. Capability to obtain better benefits . . c. Know exactly what the benefits cost and budget for them 65. One job/Many jobs at a time . . a. One big job can be very lucrative . . b. Several jobs cushions loss of a contract and increases interest 66. Learn/do new things . . a. Learn from clients or on client jobs . . b. Take time out or between jobs to learn new things - packages, applications, procedures . . c. Some clients have internal training programs where the consultant may be allowed to participate 67. See the world, or at least the slums of Philadelphia (I have) . . a. If Ižm offending any Philadelphians, tough! . . b. Can involve travel if you want it 68. Availability to deal with family and home problems and activities . . a. May be able to work primarily while children are in school, napping, or when spouse is home . . b. Able to allocate work and family/home business to most convenient time 69. Meet new people . . a. Make friends . . b. Establish professional relationships - network . . c. Learn from others 70. Pride of ownership 71. Disadvantages . . a. Many bosses . . b. Little $ . . c. Lack of stability . . d. Long hours, hard work . . e. Many people look down on consultants . . f. See good and bad companies in action . . g. Lack of benefits . . h. One job/many jobs at a time . . i. Can easily get keyholed . . j. May not get out of your neighborhood . . k. Family pressures . . l. Psychological pressures . . m. Difficult to find someone to help with a question or jam . . n. Have to constantly maintain an image . . o. No where to go 72. Many bosses . . a. Frequently report to 1 or more people on each project your working on, plus their supervisors,accounting, human resources, and a VP (and also prospective clients) . . b. Clients may make demands that interfere with your family activities, other clients, or ability totake leave . . c. Leave can interfere with your ability to market and get jobs 73. Little $ . . a. Little $ (pix) . . b. May be forced to take jobs you donžt really want . . c. Some clients arenžt willing to pay, especially for certain specialties . . d. Many deadbeats . . e. Jobs may be few and far between, especially if the economy goes South . . f. Lots of commuting between jobs can cut into time available to work 74. Lack of stability . . a. Can be long periods between jobs or with small amount of work (downtime) . . b. Frequent small and/or short jobs can be difficult to deal with and require extensive marketing . . c. May feel that you donžt know if job will end at any time 75. Long hours, hard work . . a. May work you to a frazzle . . b. Usually need to do a lot of marketing and other overhead (unpaid) activity 76. Many people look down on consultants . . a. Sometimes consultants have bad PR within a company . . b. Full-time employees may be jealous . . c. Dilbert (pix) (bad scan - read) 77. See good and bad companies in action and sometimes see more of the politics 78. Lack of benefits - effort to handle them . . a. Can be a lot of work to find insurance, retirement, and other benefits and continually keep upwith them . . b. May need an accountant to help with accounting or to provide advice . . c. May need a lawyer to assist in contract and other legal matters . . d. May need home help - house work, yard work, car upkeep, child care, etc. . . e. May need other support - photocopying, secretarial, etc. 79. One job/Many jobs at a time . . a. One job/contract for a long time can become boring . . b. One contract ending frequently means dead time between jobs . . c. Multiple contracts can be difficult to support 80. Can easily get keyholed without the chance to learn new things . . a. One (or even) several large jobs can keyhole you into one specific language, application, orprocedure with little chance to learn new things . . b. Can be working with old technology for a long time . . c. Employers may be reluctant to allow participation in company programs 81. May not get out of your neighborhood . . a. Technology . . b. Business type . . c. Geographical area 82. Family pressure, spousal jealousy . . a. You donžt have to be on site, therefore you are free to run errands, etc. . . b. Children may feel you are available all the time to drive them wherever they want . . c. Spouse may be jealous . . d. I have experienced all of these 83. Frequently donžt hear from clients when things work 84. Psychological pressures . . a. Lack of work . . b. Working alone . . c. Changing locations/people . . d. Donžt have a desk or space to call your own at client sites . . e. May do a lot of traveling which can be stressful 85. Difficult to find someone to help with a question or jam . . - May actually be true or may make you look bad to ask someone in the client office 86. Have to constantly maintain an image 87. No where to go - no promotions . . a. No chance to move up in the organization . . b. Little or no management potential unless the business grows beyond one person 88. Joys . . a. Money b. Successes - seeing systems, applications, and procedures in operation, winning proposals, recognizingthe improvement you work has accomplished . . c. Ego . . d. Meeting lots of people and making friends . . e. Learning . . f. Feeling valuable . . g. Opportunities such as giving talks . . h. A pat on the back by the client . . i. Having a good time - This is what itžs all about 89. Pitfalls . . a. Not enough work . . b. Failures . . c. Not doing a good job of marketing . . d. Letting yourself get into problems and politics . . e. Not doing a good job of testing and quality assurance . . f. Psychological and family problems . . g. Deadbeat clients . . h. Demanding or unpleasant clients . . i. Criticism by client, whether deserved or not . . j. Lack of recognition for successful work . . k. Client problems - disappointment 90. Benefits, taxes, office, and other issues . . a. Maintaining an image . . b. Networking . . c. Benefits . . d. Taxes . . e. Incorporating . . f. Licensing and certification . . g. Maintaining an office . . h. Office equipment . . i. Business accounts . . j. Legal issues . . k. Courier . . l. Ethics 91. Maintaining an image . . a. Image is far more important than reality . . b. Business is great - busy and prosperous consultants must be good by definition . . c. You are very prosperous . . d. You are a professional . . e. Dress to impress . . f. You are an expert 92. Networking . . a. Everyone you meet is a potential client - church, social events, professional events, etc. . . b. Take every opportunity to meet people . . c. Take advantage of opportunities to put yourself in public - like this talk . . d. Learn about your competitors and potential clients . . e. Take advantage of volunteer opportunities . . f. Networking examples (pix) 93. Benefits . . a. Insurance . . b. Retirement investing . . - Keogh and SEPP . . c. Car . . d. Leave . . i. Vacation . . ii. Sick leave . . iii. Holidays . . iv. Other leave (bereavement, maternity, etc.) . . v. Education/training/schooling/conferences/shows . . e. Other 94. Taxes . . a. Estimated tax payments . . b. Schedule C . . c. Keep good records . . d. Probably will need tax advice . . e. Social Security . . f. Employer Identification Number (EIN) . . g. Always keep complete records of all business activity 95. Incorporating . . a. Charges and time to set up . . b. Requires annual reports . . c. Appoint officers . . d. Generally can manipulate income to be more beneficial tax-wise . . e. Can assign assets (i.e., car, computers, etc.) to the corporation . . f. May lower liability . . g. Some tax deductions are available to the corporation, but not an individual . . h. Some agencies and companies are more willing to do business with a corporation . . i. Tax Code Section 1706 - IRS . . j. Usually helpful . . k. Evaluate individually 96. Licensing and certification . . a. CDPE, PE, MS, CNE, etc. . . b. Some clients look for certification as evidence of expertise . . c. Could need zoning if you see a lot of clients in your home . . d. I read an article recently that certification is on the out in IS departments 97. Maintaining an office . . a. Need to maintain some area or room, probably in your home . . b. Needed to do work . . c. Needed to do billing and marketing . . d. May need to meet clients or workers . . e. Place to keep records and materials 98. Office equipment . . a. Computer . . b. Fax . . c. Internet access and e-mail . . d. Answering machine . . e. Beeper . . f. Cell phone . . g. Answering service . . h. Voice mail (phone company or computer) . . i. Separate business/data telephone line . . j. Post office box . . k. Laptop . . l. High quality printer . . m. Shredder . . n. Always get the highest quality and performance equipment you can afford - it will pay off in the long . . run . . o. Calendar, Day-timer, etc. . . p. software to support your business focus as well as to support your business . . q. Security system of methods of securing or protecting your equipment 99. Business bank/checking account . . a. Business checking or other accounts . . b. Line of credit - usually not needed 100. Legal issues . . a. Contracts . . b. Liability . . c. Deadbeat clients . . d. Clients may ask for unethical or illegal actions . . e. Business and assets are considered part of divorce settlement 101. Courier 102. Ethics . . a. Always maintain high ethical standards - extremely important . . b. Know and abide by standards of organizations such as IEEE, ACM, and others . . c. Familiarize yourself with clientsž standards (if they have any) . . d. Consider all client information proprietary unless told otherwise . . e. Let clients know your standards . . f. Be aware of potential conflicts of interest to protect you and your clients 103. Finding new and keeping old clients . . a. Marketing . . b. Follow up . . c. Keeping clients 104. Marketing . . a. Points are roughly in order of importance and usefulness . . b. Networking . . c. Previous jobs/clients - repeat jobs, referrals . . d. Respond to bulletin board and web adds . . e. Respond to newspaper employment ads . . f. Using agencies - MAXIM/Aerotek, EDP Temps, ALEX, Mindbank, Computemp, Rhodes International, . . Phoenix Systems, Burton Services, Voltech, The Consortium, Editech Services, Kelly Services, . . DanSources, Judge Technical Services, many others . . g. Using other consultants/agents . . h. Give presentations - put yourself in the public eye . . i. Watch technical journals, newspapers, and other media to see what/whožs hot . . j. Pro bono (volunteer) work . . k. Advertise in targeted and professional publications - PAFOX, CPCUG Monitor, APMP NCA Chapter . . Executive Summary, etc. . . l. Write articles for publications with your company name attached . . m. Web page . . n. Put ads or descriptive material on specific bulletin boards or web media . . o. Cold calls - want a rationale for choosing prospective clients . . p. Mass mailings . . q. Sponsor a program . . r. Distribute flyers at meetings, door to door . . s. Junk fax, junk e-mail advertisements . . t. Telephone yellow pages advertising - probably not good for professionals . . u. Washington Business advertising - marginal or poor I think . . v. Church/synagogue advertising/listings . . w. Trade shows (such as Washington Technology) . . x. Others? . . y. Give careful consideration to every possible method of marketing and analyze to your situation . . z. Test drive methods when possible . . aa. Play that you are the client when considering most likely marketing methods 105. Follow up . . a. It usually takes time and effort to get a client . . b. Once you have a potential job, keep after the client - cultivate them . . c. Many clients work on an interview basis, similar to hiring a F-T employee . . d. Some clients are satisfied with a resume or capabilities statement . . e. Always have samples of code, documentation, screen shots, and descriptions available . . f. Some clients require a presentation . . g. Some clients want some preliminary work - usually unproductive . . h. You may have to analyze the clientžs needs and tell them what they REALLY need 106. Keeping clients . . a. Doing a good job (in the clientžs eyes) brings repeat work and referrals . . b. Maintain an image at all times of a successful and respectable professional . . c. Seek clients with the potential for repeat work . . d. Stay in touch with the client . . e. Look for other things you can do for the client . . f. May want to do some work at lower or no cost initially to lure a client . . g. Work hard and/or long hours - do other things to give impression of dedication to client . . h. Make yourself invaluable - make client think he canžt get along without you 107. Handling dead time . . a. There will be dead time . . b. Increase marketing activities . . c. Learn new skills . . d. Improve existing skills . . e. Create a product, write a book, etc. . . f. Act like your working . . g. Do those household chores that have been put off 108. IRC Section 1706C . . a. This is the infamous list of 20 rules that the IRS uses to judge if a person is really a consultant (1099) or an employee (W-2) . . b. Congress may abolish or modify this in the near future . . c. Rules i. Is the person providing services required to comply with instructions about when, where, and how the work is to be done? - do you set your own work and technical rules/guidelines? ii. Is the person provided training to enable him/her to perform a job in a particular method or manner? - does the company provide technical training to do the job? iii. Are the services provided integrated into the businessž operation? - are the services standard operating procedure of the company or a special function? iv. Must the services be rendered personally? - can others in the company (or in your company) do the job? v. Does the business hire, supervise, or pay assistants to help performing services under this contract? - do you supervise company personnel? vi. Is the relationship between the individual and the person he/she performs services for a continuing relationship? - do you work for this firm fairly regularly and most of the time? vii. Who sets the hours of work? - again, do you exercise control over yourself? viii. Is the worker required to devote his/her full time to the person he/she performs services for? - this is a biggie and alone can sink consultant status ix. Is the work performed at the place of the business of the potential employer? - working at your own office is a big plus, but not a determining factor by itself x. Who directs the order or sequence in which the work must be done? - again, who provides the technical direction? xi. Are regular oral or written reports required? - I donžt think this is very important unless you fail several of the other questions xii. What is the method of payment - hour, week, commission, or by the job? - by the job is preferable to the IRS, but people working on big jobs frequently work on hourly, daily, or weekly pay xiii. Are business and/or traveling expenses reimbursed? - Frequently consultants are reimbursed, so this is more of an extra if you fail other questions xiv. Who furnishes tools and materials used in providing services? - this can include computers, software, paper, pencils, paper clips, etc. xv. Does the person providing services have a significant investment in facilities used to perform services? - žsignificant investmentž varies with the size and type of business - do you have computers or other equipment, office, anything else that helps you do your business and make money? xvi. Can the person providing services realize both a profit and a loss? - can you loose money on proposals, equipment, services to you, malpractice suits, etc. ? xvii. Can the person providing services work for a number of firms at the same time? - this is important, although at the same time could be construed to be separately over a year xviii. Does the person make his/her services available to the general public? - if you arenžt available to anyone, look out! xix. Is the person providing services subject to dismissal for reason other than nonperformance of contract specifications? - I donžt understand this one, because a consultant is subject to dismissal for all the same reasons as a full time employee, but it can be done faster and usually there are more reasons for dismissal xx. Can the person providing services terminate the relationship without incurring a liability for failure to complete a job? - consultants usually have a contractual liability 109. Questions ---------- End of Document