Starting A New Busines

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
User avatar
Topic Author
ronhh
Posts: 18
Joined: Wed Sep 13, 2017 8:44 pm

Starting A New Busines

Post by ronhh » Thu Sep 05, 2019 4:32 pm

I will be retiring in the near future from a company for whom I've worked for over 35 years. The work I do (training and development) lends itself well to contract work after official retirement, and so I'm planning to form my own business and work as much (or as little) as I would like. I would project gross business income to be less than $100k. I have a few questions, and I'm amazed at the wisdom and knowledge represented in all the Bogleheads forums. So if you have thoughts and suggestions, I'd very humbly appreciate them. So here it is:

Planning to structure business as an LLC. Already confirmed my preferred business name is available with Sec. of State. Should I make my wife a "member" in the LLC from the onset even if she would have limited or no activity in the business?

Would you recommend having a separate checking account for the business (pretty sure this answer is yes), and further, I would think that a separate credit card would be warranted? Any recommendations on best small business, no-fee credit cards? I will not need a very high credit limit, and while I like the rewards, it's not a deal-breaker.

Is Excel good enough for a records keeping program, or should I move up to QuickBooks (or other) program?

Finally is there any great resource (book, website, blog, other) that I should invest time/dollars in prior to this adventure?
Stay The Course

HomeStretch
Posts: 1485
Joined: Thu Dec 27, 2018 3:06 pm

Re: Starting A New Busines

Post by HomeStretch » Thu Sep 05, 2019 11:34 pm

Yes, it’s a good idea to have a separate LLC checking account and credit card. You want to keep your business and personal finances completely separate.

When I opened a Chase Business Ink card last year, I received a $500 bonus for spending $3k in 3 months. It also gives 5% cash back on phone/cable/internet/office supply stores, 1% on everything else. Check doctorofcredit.com for suggestions on the best business credit cards.

If your business receipts and expenses are simple, excel is probably fine. If more complicated QuickBooks online (for a monthly fee) might work and there’s probably others.

Make sure you understand your state and federal income tax reporting. Plus your state might require you to file additional reports with fees like an annual report or a business entity tax. Check your state’s tax department website business section.

If you want to make retirement contributions, look into self-employed retirement plans like a Solo 401k offered by many providers like Fidelity, Vanguard, etc. The prototype plans offered may vary by provider (i.e., some allow Roth contributions, some don’t, etc.).

Check your will to be sure it includes provisions for your business interests. As I recall, my attorney added a few sentences pertaining to it to my will.

Spirit Rider
Posts: 11205
Joined: Fri Mar 02, 2007 2:39 pm

Re: Starting A New Busines

Post by Spirit Rider » Fri Sep 06, 2019 12:00 am

If your business will primarily be providing services to clients. An LLC is unnecessary, provides little to no benefit and quite possibly counter-productive.

This is because personal services provided by an LLC owner receive little to no liability protection. You can always operate using a DBA or fictitious name.

User avatar
yangtui
Posts: 232
Joined: Sun Mar 30, 2014 1:32 pm
Contact:

Re: Starting A New Busines

Post by yangtui » Fri Sep 06, 2019 5:51 am

depending on the nature of your business, an llc might be pointless and an unnecessary expense. generally speaking, it will not shield you from legal liability resulting from your actions. business (e&o) insurance is most likely far more important from a personal liability management perspective. you can always go the dba/ein route if you want to have a unique business name. why do you want to make your wife a member? did a lawyer tell you to do this? be aware, having a multimember llc will complicate (read more time and money) your tax filing requirements. do you need to register your business or get any special business licenses in the jurisdictions you plan on operating in? do you need to collect/remit sales tax? you might need to worry about making estimated fed/state/local tax payments if you have a net profit. what does your state/local direct/indirect tax nexus look like? having a separate bank account and credit card for the business is important so you can easily segregate business related activity from personal activity. i would look at 1040 schedule c to check if your current bookkeeping system will easily generate the necessary numbers to quickly and accurately populate the form. if a simple single entry excel system is sufficient then no need to complicate things.

two good free resources to checkout are sba.gov and score.org. good luck!
Last edited by yangtui on Fri Sep 06, 2019 6:14 am, edited 7 times in total.

mrmass
Posts: 243
Joined: Thu Jul 26, 2018 6:35 pm

Re: Starting A New Busines

Post by mrmass » Fri Sep 06, 2019 5:56 am

IMO all good replies, Consider making sure your business actually makes a buck or two before you get bogged down with corporate structures and such. Separation is good but make sure the business is viable.

Good luck.

User avatar
Topic Author
ronhh
Posts: 18
Joined: Wed Sep 13, 2017 8:44 pm

Re: Starting A New Busines

Post by ronhh » Fri Sep 06, 2019 4:11 pm

Spirit Rider wrote:
Fri Sep 06, 2019 12:00 am
If your business will primarily be providing services to clients. An LLC is unnecessary, provides little to no benefit and quite possibly counter-productive.

This is because personal services provided by an LLC owner receive little to no liability protection. You can always operate using a DBA or fictitious name.
Great point. The work I would be doing really has no "personal" liability danger. Aside from being negligent behind the wheel of the vehicle, and in that event even an entity such as an LLC would likely provide no shield. Thanks for this perspective!
Stay The Course

NYGiantsFan
Posts: 150
Joined: Fri Aug 17, 2012 7:59 am

Re: Starting A New Busines

Post by NYGiantsFan » Fri Sep 06, 2019 5:14 pm

yangtui wrote:
Fri Sep 06, 2019 5:51 am
depending on the nature of your business, an llc might be pointless and an unnecessary expense. generally speaking, it will not shield you from legal liability resulting from your actions. business (e&o) insurance is most likely far more important from a personal liability management perspective. you can always go the dba/ein route if you want to have a unique business name. why do you want to make your wife a member? did a lawyer tell you to do this? be aware, having a multimember llc will complicate (read more time and money) your tax filing requirements. do you need to register your business or get any special business licenses in the jurisdictions you plan on operating in? do you need to collect/remit sales tax? you might need to worry about making estimated fed/state/local tax payments if you have a net profit. what does your state/local direct/indirect tax nexus look like? having a separate bank account and credit card for the business is important so you can easily segregate business related activity from personal activity. i would look at 1040 schedule c to check if your current bookkeeping system will easily generate the necessary numbers to quickly and accurately populate the form. if a simple single entry excel system is sufficient then no need to complicate things.

two good free resources to checkout are sba.gov and score.org. good luck!
One important benefit of LLC is that it will allow you contribute to retirement plan from profits and reduce your taxes.

niceguy7376
Posts: 2386
Joined: Wed Jul 10, 2013 2:59 pm
Location: Metro ATL

Re: Starting A New Busines

Post by niceguy7376 » Fri Sep 06, 2019 5:34 pm

NYGiantsFan wrote:
Fri Sep 06, 2019 5:14 pm
One important benefit of LLC is that it will allow you contribute to retirement plan from profits and reduce your taxes.
I dont think that is true. An LLC + S-Corp or Sole Prop should make no difference in retirement plan contributions.

On the other hand, having a company in CA has its own set of registration fees and such.

WildBill
Posts: 490
Joined: Wed Jun 29, 2016 10:47 pm
Location: San Antonio, Texas

Re: Starting A New Busines

Post by WildBill » Fri Sep 06, 2019 5:38 pm

Howdy

All of the suggestions are good.

One very important thing you can do is to insist that you are paid in advance as much as possible for services. I have a similar business that I operate on a retainer model. As a one man business I have no interest in spending any time chasing payments.

Happy absence of ARs

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid

Spirit Rider
Posts: 11205
Joined: Fri Mar 02, 2007 2:39 pm

Re: Starting A New Busines

Post by Spirit Rider » Fri Sep 06, 2019 6:03 pm

ronhh wrote:
Fri Sep 06, 2019 4:11 pm
Spirit Rider wrote:
Fri Sep 06, 2019 12:00 am
If your business will primarily be providing services to clients. An LLC is unnecessary, provides little to no benefit and quite possibly counter-productive.

This is because personal services provided by an LLC owner receive little to no liability protection. You can always operate using a DBA or fictitious name.
Great point. The work I would be doing really has no "personal" liability danger. Aside from being negligent behind the wheel of the vehicle, and in that event even an entity such as an LLC would likely provide no shield. Thanks for this perspective!
My point was that even if you have significant personal liability for your services, an LLC would provide little to no protection for that liability. With an LLC or a sole proprietorship you have equal business liability insurance needs based on any potential liability. You should carefully review any contracts to insure there is no liability other than to the cost of the services.

CFM300
Posts: 1575
Joined: Sat Oct 27, 2007 5:13 am

Re: Starting A New Busines

Post by CFM300 » Fri Sep 06, 2019 6:07 pm

There are lots of things you might want or need to do. A quick list off the top of my head:

- Register a domain for your website and email
- Set up a website
- Set up a business email account
- Get necessary city/county business permits
- Choose a business name
- Register with your state to DBA
- Have a draft Consulting (or Independent Contractor) Agreement
- Set up a business banking account
- Set up a business credit card
- Set up a solo 401(k)
- Get business insurance (E&O maybe?)
- Set up an invoicing system
- Understand how SE taxes work (fed and state)
- Understand how and when to make "quarterly" tax payments (again, fed and state)
- Set up a system for logging your hours
(even if not needed for clients, it's important to know how much time you're spending on your business)

I highly recommend this book:
https://store.nolo.com/products/the-sma ... -smbu.html

if you're in California:
https://store.nolo.com/products/the-sma ... -open.html

User avatar
NCPE
Posts: 48
Joined: Tue Mar 15, 2016 5:10 am
Location: North Carolina

Re: Starting A New Busines

Post by NCPE » Fri Sep 06, 2019 6:11 pm

I would recommend a separate credit card to keep the business and personal expenses separate, and to look at Microsoft Money Plus as a accounting software package. (It doesn't have all the bells and whistles of QuickBooks but it is free :happy )

Good luck with your future endeavors !!!

NCPE

User avatar
Topic Author
ronhh
Posts: 18
Joined: Wed Sep 13, 2017 8:44 pm

Re: Starting A New Busines

Post by ronhh » Sat Sep 07, 2019 7:40 am

WildBill wrote:
Fri Sep 06, 2019 5:38 pm
Howdy

All of the suggestions are good.

One very important thing you can do is to insist that you are paid in advance as much as possible for services. I have a similar business that I operate on a retainer model. As a one man business I have no interest in spending any time chasing payments.

Happy absence of ARs

W B
And you are spot-on WildBill. I will employ "cash" vs. "accrual" collection practices. Luckily my clients will for the most part be organizations I'm already doing quite a bit of work for. But your point is well-taken. Thank you.
Stay The Course

User avatar
Topic Author
ronhh
Posts: 18
Joined: Wed Sep 13, 2017 8:44 pm

Re: Starting A New Busines

Post by ronhh » Sat Sep 07, 2019 7:42 am

NCPE wrote:
Fri Sep 06, 2019 6:11 pm
I would recommend a separate credit card to keep the business and personal expenses separate, and to look at Microsoft Money Plus as a accounting software package. (It doesn't have all the bells and whistles of QuickBooks but it is free :happy )

Good luck with your future endeavors !!!

NCPE
Given the size and scope of what I'm planning, a "FREE" software package is most appealing. I will check Money Plus out. Another that I've recently heard about is SlickPie? Don't know if you've heard/seen this one? Thanks for your suggestion.
Stay The Course

User avatar
Topic Author
ronhh
Posts: 18
Joined: Wed Sep 13, 2017 8:44 pm

Re: Starting A New Busines

Post by ronhh » Sat Sep 07, 2019 7:46 am

CFM300 wrote:
Fri Sep 06, 2019 6:07 pm
There are lots of things you might want or need to do. A quick list off the top of my head:

- Register a domain for your website and email
- Set up a website
- Set up a business email account
- Get necessary city/county business permits
- Choose a business name
- Register with your state to DBA
- Have a draft Consulting (or Independent Contractor) Agreement
- Set up a business banking account
- Set up a business credit card
- Set up a solo 401(k)
- Get business insurance (E&O maybe?)
- Set up an invoicing system
- Understand how SE taxes work (fed and state)
- Understand how and when to make "quarterly" tax payments (again, fed and state)
- Set up a system for logging your hours
(even if not needed for clients, it's important to know how much time you're spending on your business)

I highly recommend this book:
https://store.nolo.com/products/the-sma ... -smbu.html

if you're in California:
https://store.nolo.com/products/the-sma ... -open.html
CFM300, thank you for taking the time to share all of this. Already researching SE and quarterly tax payment guidelines. However, had not thought much about a service agreement/contract for clients, nor the manner of invoicing. Very good suggestions. And I will immediately check-out the recommended book. Again, thanks for taking time to share your expertise.
Stay The Course

User avatar
Topic Author
ronhh
Posts: 18
Joined: Wed Sep 13, 2017 8:44 pm

Re: Starting A New Busines

Post by ronhh » Sat Sep 07, 2019 8:28 am

HomeStretch wrote:
Thu Sep 05, 2019 11:34 pm
Yes, it’s a good idea to have a separate LLC checking account and credit card. You want to keep your business and personal finances completely separate.

When I opened a Chase Business Ink card last year, I received a $500 bonus for spending $3k in 3 months. It also gives 5% cash back on phone/cable/internet/office supply stores, 1% on everything else. Check doctorofcredit.com for suggestions on the best business credit cards.

If your business receipts and expenses are simple, excel is probably fine. If more complicated QuickBooks online (for a monthly fee) might work and there’s probably others.

Make sure you understand your state and federal income tax reporting. Plus your state might require you to file additional reports with fees like an annual report or a business entity tax. Check your state’s tax department website business section.

If you want to make retirement contributions, look into self-employed retirement plans like a Solo 401k offered by many providers like Fidelity, Vanguard, etc. The prototype plans offered may vary by provider (i.e., some allow Roth contributions, some don’t, etc.).

Check your will to be sure it includes provisions for your business interests. As I recall, my attorney added a few sentences pertaining to it to my will.
Homestretch, good perspectives and suggestions (all). Will check out the Chase Business Ink card, and doctorofcredit.com. Was not aware of that site. Thanks for taking the time to respond.
Stay The Course

User avatar
Sandtrap
Posts: 8300
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Starting A New Busines

Post by Sandtrap » Sat Sep 07, 2019 8:45 am

ronhh wrote:
Thu Sep 05, 2019 4:32 pm
I will be retiring in the near future from a company for whom I've worked for over 35 years. The work I do (training and development) lends itself well to contract work after official retirement, and so I'm planning to form my own business and work as much (or as little) as I would like. I would project gross business income to be less than $100k. I have a few questions, and I'm amazed at the wisdom and knowledge represented in all the Bogleheads forums. So if you have thoughts and suggestions, I'd very humbly appreciate them. So here it is:
1
Planning to structure business as an LLC. Already confirmed my preferred business name is available with Sec. of State. Should I make my wife a "member" in the LLC from the onset even if she would have limited or no activity in the business?
2
Would you recommend having a separate checking account for the business (pretty sure this answer is yes), and further, I would think that a separate credit card would be warranted? Any recommendations on best small business, no-fee credit cards? I will not need a very high credit limit, and while I like the rewards, it's not a deal-breaker.
3
Is Excel good enough for a records keeping program, or should I move up to QuickBooks (or other) program?
4
Finally is there any great resource (book, website, blog, other) that I should invest time/dollars in prior to this adventure?
1. Yes
2. Yes. Open a business or DBA, checking and savings. Do not commingle funds at any time with your personal.
(Be sure to have ample "working capital" in the accounts).
3. Yes. Any will work as long as you keep up with it.
4. There are a number of books on the "nuts and bolts" of starting a small business. Most can be perused for actual useful content in less than 30 minutes. Avoid get "how to get rich without really working" books, or "how I made gazillions doing something secret", or "sign up for my action plan and a lifetime of free financial advice", etc.
5. The SBA (Small Business Admin.) has a mentor program or used to. . . .and also free consults on things business from seasoned businessman.
6. Avoid online forums that sound like #4.
7. Talk to relatives, friends, or folks in your network, that have started small businesses and done well over time. (proven)
8. Take a course at the local university, "how to start a small business". (they have no agenda).
9. Be sure your business plan is rock solid with contingencie planning.
10. Have an exit plan. Do not invest so much into the business that you can't pull the plug and walk away without regret at any time.
11. Realize that "you" have full control over the size of your business and it's demands on your time. Never forget that. If it's a good one, it will grow and grow and grow like a tropical vine. Shut it down when it is no longer fun.
12. Meet others that have similar genre businesses. Learn about a website presence, if needed, marketing, promotion, etc. Marketing and promotion and building a "presence" is the soul of a thriving business.
13. Become a professional "business person" regardless of the business undertaking. IE: a great carpenter does not make for a successful general contractor. But, a great business person can do well and hire carpenters.
14. etc.

j :D
Wiki Bogleheads Wiki: Everything You Need to Know

Spirit Rider
Posts: 11205
Joined: Fri Mar 02, 2007 2:39 pm

Re: Starting A New Busines

Post by Spirit Rider » Sat Sep 07, 2019 9:33 pm

ronhh wrote:
Sat Sep 07, 2019 8:28 am
Homestretch, good perspectives and suggestions (all). Will check out the Chase Business Ink card, and doctorofcredit.com. Was not aware of that site. Thanks for taking the time to respond.
If you do end up using an LLC. Keep in mind that any commingling of personal and LLC assets, can pierce the veil of the LLC. You should have separate financial and credit accounts in the name of the LLC.

With a sole proprietorship. While it still is a best practice to have separate financial and credit accounts. They greatly assist in tracking business income and expenses. They are not strictly necessary to be in the name of the business. However, as suggested by @Homestretch, the Chase Business Ink card is such a good card. Most small business owners should get one in the name of the business.
ronhh wrote:
Sat Sep 07, 2019 7:46 am
CFM300, thank you for taking the time to share all of this. Already researching SE and quarterly tax payment guidelines. However, had not thought much about a service agreement/contract for clients, nor the manner of invoicing. Very good suggestions. And I will immediately check-out the recommended book. Again, thanks for taking time to share your expertise.
Keep in mind that most larger and even many smaller companies will never allow the use of your contract. The client will generally want to start with their service agreements/Contracts and it will often be like pulling teeth to get them to agree to changes. I have actually walked away from some engagements because the documents were so one-sided.

It is still a good idea to have a good boilerplate contract available. Remarkably, there are some clients that will allow or even want to use your contract, but they might want changes, This is one case where it is better to play defense (of your contract) than offense (against their contract).

Finally, be aware of sneaky invoice charging invoice/payment charges. It is becoming more common. This is where they charge you to receive your invoice and pay you. I know, total BS. The last two Fortune 100 clients I had with large full time contracts reduced your invoiced amount by 1% to cover their BS invoice/payment costs.
  1. When first of the two clients did this, I simply refused to sign the contract util they increased my rate by 1.5%. They said they couldn't do that, but I said fine and got up out of my chair to walk out. Bluffing is not only useful in poker, they could.
  2. With the second one, I was prepared. I checked to see if they had that ridiculous policy. When I found out I increased my rate. They wondered why my rate was $###.60.

tibbitts
Posts: 9144
Joined: Tue Feb 27, 2007 6:50 pm

Re: Starting A New Busines

Post by tibbitts » Sat Sep 07, 2019 10:06 pm

WildBill wrote:
Fri Sep 06, 2019 5:38 pm
Howdy

All of the suggestions are good.

One very important thing you can do is to insist that you are paid in advance as much as possible for services. I have a similar business that I operate on a retainer model. As a one man business I have no interest in spending any time chasing payments.

Happy absence of ARs

W B
For about thirty years I was in the training business. If I'd limited my clients to those who would have paid in advance, I'd have had zero clients ever.

User avatar
Elric
Posts: 196
Joined: Sat Dec 08, 2018 12:23 am
Location: Virginia
Contact:

Re: Starting A New Busines

Post by Elric » Sat Sep 07, 2019 10:14 pm

Lots of good advice from folks who know more than I do, so I'll just throw another suggestion at you: for accounting, Wave Accounting (a free, in the cloud software as a service) works for me. It has limitations, but it works for my simple single-owner LLC and also for our Homeowner's Association. It's set up assuming you'll do accrual accounting, but for simple businesses it works fine for cash-based accounting.

Definitely better than Excel, in that for many banks it can automatically read in statements to help with book-keeping and generate reports easily.

I do use an Excel template for my invoices, which I save as a pdf before sending to clients.
"No man is free who works for a living." | Illya Kuryakin

Spirit Rider
Posts: 11205
Joined: Fri Mar 02, 2007 2:39 pm

Re: Starting A New Busines

Post by Spirit Rider » Sat Sep 07, 2019 10:44 pm

tibbitts wrote:
Sat Sep 07, 2019 10:06 pm
For about thirty years I was in the training business. If I'd limited my clients to those who would have paid in advance, I'd have had zero clients ever.
Often true. I always tried to get 1/4 up front, 1/2 milestone and 1/4 acceptance for project based work. I usually only received 1/5 or less up front, but always insisted that acceptance could not be higher than up front. I also found that the bigger the corporation the less reliable they were on paying promptly. I had several corporations that would slow walk and even stop paying invoices latter in the quarter. The senior management wanted their performance bonuses by keeping the revenue higher. I often would have to stop work in order to get paid.

smitcat
Posts: 3932
Joined: Mon Nov 07, 2016 10:51 am

Re: Starting A New Busines

Post by smitcat » Sun Sep 08, 2019 6:12 am

Spirit Rider wrote:
Sat Sep 07, 2019 10:44 pm
tibbitts wrote:
Sat Sep 07, 2019 10:06 pm
For about thirty years I was in the training business. If I'd limited my clients to those who would have paid in advance, I'd have had zero clients ever.
Often true. I always tried to get 1/4 up front, 1/2 milestone and 1/4 acceptance for project based work. I usually only received 1/5 or less up front, but always insisted that acceptance could not be higher than up front. I also found that the bigger the corporation the less reliable they were on paying promptly. I had several corporations that would slow walk and even stop paying invoices latter in the quarter. The senior management wanted their performance bonuses by keeping the revenue higher. I often would have to stop work in order to get paid.
From what we have seen this is very typical in a service business , it is the way most of the clients behave with payments not processed until services are completed and then stretched out over time.
YMMV

User avatar
Topic Author
ronhh
Posts: 18
Joined: Wed Sep 13, 2017 8:44 pm

Re: Starting A New Busines

Post by ronhh » Wed Sep 11, 2019 8:01 am

Elric wrote:
Sat Sep 07, 2019 10:14 pm
Lots of good advice from folks who know more than I do, so I'll just throw another suggestion at you: for accounting, Wave Accounting (a free, in the cloud software as a service) works for me. It has limitations, but it works for my simple single-owner LLC and also for our Homeowner's Association. It's set up assuming you'll do accrual accounting, but for simple businesses it works fine for cash-based accounting.

Definitely better than Excel, in that for many banks it can automatically read in statements to help with book-keeping and generate reports easily.

I do use an Excel template for my invoices, which I save as a pdf before sending to clients.
Elric, thanks for the suggestion. Adding WAVE to my list to research.
Stay The Course

User avatar
Topic Author
ronhh
Posts: 18
Joined: Wed Sep 13, 2017 8:44 pm

Re: Starting A New Busines

Post by ronhh » Wed Sep 11, 2019 8:06 am

Spirit Rider wrote:
Sat Sep 07, 2019 9:33 pm
ronhh wrote:
Sat Sep 07, 2019 8:28 am
Homestretch, good perspectives and suggestions (all). Will check out the Chase Business Ink card, and doctorofcredit.com. Was not aware of that site. Thanks for taking the time to respond.
If you do end up using an LLC. Keep in mind that any commingling of personal and LLC assets, can pierce the veil of the LLC. You should have separate financial and credit accounts in the name of the LLC.

With a sole proprietorship. While it still is a best practice to have separate financial and credit accounts. They greatly assist in tracking business income and expenses. They are not strictly necessary to be in the name of the business. However, as suggested by @Homestretch, the Chase Business Ink card is such a good card. Most small business owners should get one in the name of the business.
ronhh wrote:
Sat Sep 07, 2019 7:46 am
CFM300, thank you for taking the time to share all of this. Already researching SE and quarterly tax payment guidelines. However, had not thought much about a service agreement/contract for clients, nor the manner of invoicing. Very good suggestions. And I will immediately check-out the recommended book. Again, thanks for taking time to share your expertise.
Keep in mind that most larger and even many smaller companies will never allow the use of your contract. The client will generally want to start with their service agreements/Contracts and it will often be like pulling teeth to get them to agree to changes. I have actually walked away from some engagements because the documents were so one-sided.

It is still a good idea to have a good boilerplate contract available. Remarkably, there are some clients that will allow or even want to use your contract, but they might want changes, This is one case where it is better to play defense (of your contract) than offense (against their contract).

Finally, be aware of sneaky invoice charging invoice/payment charges. It is becoming more common. This is where they charge you to receive your invoice and pay you. I know, total BS. The last two Fortune 100 clients I had with large full time contracts reduced your invoiced amount by 1% to cover their BS invoice/payment costs.
  1. When first of the two clients did this, I simply refused to sign the contract util they increased my rate by 1.5%. They said they couldn't do that, but I said fine and got up out of my chair to walk out. Bluffing is not only useful in poker, they could.
  2. With the second one, I was prepared. I checked to see if they had that ridiculous policy. When I found out I increased my rate. They wondered why my rate was $###.60.
Spirit Rider, thanks for weighing in. I have, after reading all of the forum perspectives, and researching for several hours on my own, that a "sole proprietorship" structure should suit my needs well. I will have a separate business name, and will definitely keep separate personal and business financial records, with a dedicated bank account for the business. I also looked at the Chase Business cards. Pretty impressive at first blush. So my intent will also be to have a dedicated business credit card with business name. I'm not too concerned with the contract issue at this point as most if not all my work will be very short-term in nature, and done with clients I already do work for - THAT SAID - if I do have the opportunity to enter into lengthier projects, I will not do so blindly. Again, thanks for sharing your expertise. I'm excited for the next chapter of my working career!
Stay The Course

Post Reply