Hi all, I'm thinking of starting a consulting business.
It's somewhat opportunistic based on some things that have come across my path recently. I wouldn't be quitting my current job, this would be on the side (for now), though probably mostly in the same field.
Those who have been in a similar position - what advice would you give to someone starting out?
When the govt is considering engaging a consultant, they run it by another consultant first. ;)
If you're in the public sector not sure it is allowed.But generally it depends on if the job roles and consultancy are in the same field.
Similar for some corporate roles/companies.(Possible conflict of interest) Obviously your employment contract can rule in/out some outside employment no-no's. When you say 'come across your path' ,if that means while in your current role, be careful.I think there's some rules also around profiting from inside info.Some of the legal folk here will chime in.
If its this guy, run as fast as you can.>
https://www.news.com.au/finance/work/at-work/lawyers-wild-mo…
Okay I know it's news.com.au and likely half the story is a beat up, but if even 50% of that article is based on fact, how on earth does that bloke still have a job.
Not sure. I guess he was the offspring of rich entitled parents, and thought the world was his servant, just like Mum and Dad did.?
Others would say, "yeah, sounds like a lawyer."
Hands up who did an assignment in law school about workplace bullying and now thinks it's their get-out-of-jail-free-card?
Some people are truly living on another planet, we had a dude who went and told a partner at the accounting firm that he'd had too many shots at the bar last night and had to go home.
He also listed said partner as a reference when he applied for another job.
Some people never realise that they actually need to be responsible at any point, for anything. When it finally happens, they get a rude awakening.
@freefall101: Let me summarise it. The wrong people are being labelled delusional. The whole paradigm has flipped where these days, the perp claims to be the victim.(bushfire arson is a good example of it)
The reason is ? Lawyers.
. Based on their behaviour, I'd say he is unemployable, and if ever there was a case to actively make a provide someone life long unemployment benefits, just to protect everybody else from his stupidity, this is it.
OMG! Not only did this muppet find decent employment upon completing his law degree, he continued to get alternative employment and is still currently employed despite displaying challenging skills, behaviours and abilities!
How do people like this even get jobs far less keep them?
Can't turn up to work on time.
Falls asleep during meetings.
Fails to complete tasks as directed.
Instructs his superiorities when he feels it is appropriate for them to communicate with him.
Complains about having to work for 2 - 4 hours at a time.
Uses govt assets to conduct private business during work time when he has work which is not only unfinished, but also substandard.
When approached by supervisors to address the behaviours they feel are affecting his performance, he cries like a little girl and wails on that "they're bullying me!"
Escalates his grievances to Fair Work who apparently slap him down for his work place behaviours and his ludicrous shenanigans during his tribunal hearing and he doubles down on the bullying claims and still manages to keep his job!
How the hell does this happen?
It's probably Nepotism. A rello,friend or fellow ex-pat in HR.
It's ridiculous how difficult it is to sack ppl. This dicks name should go onto a register so no-one else gets burned.
Those who have been in a similar position - what advice would you give to someone starting out?
If its in the same field you currently have work in, then you need to look into the conflict of interest issues. You could be sacked for example.
If not, then full steam ahead, so ou'll need to register the business after getting a business name etc.
Most importantly you'll need to get the correct level of insurance to cover your arse. Most likely could get away with just Professional Indemnity Cover, but look into it.
Basically PIC if needed if you screw up and give bad advice, and they company sues you.
Get some accounting software or excel to track your money
draw up some engagement letters covering off terms etc.
Thanks, this is helpful.
Hadn't really thought of conflict of interest, and don't reckon it will be an issue, but worth keeping in mind.
Insurance is another thing I need to look into.
Hadn't really thought of conflict of interest, and don't reckon it will be an issue, but worth keeping in mind.
Most of the time it isn't an interest, but just be aware if it is. Companies can get grumpy and might sack you if they feel you are stealing work from them for example.
Insurance is another thing I need to look into.
If you are giving advice out, then Indemnity insurance is a must. Not that most ever use it, but if you give bad advice and it goes pear shaped, causing a massive outage for example, you might get a bill.
Fortunately the advice I would be giving is unlikely to result in any outages, but I do take your point, thank you.
I'm at a gov dept and you have to disclose if you have another business.
If you don't and are found to be doing it on company time/giving out contracts that benefit you you'll be in big trouble.
Yeah, valid point thank you. I don't currently work in Govt, but have in the past and it's a worthwhile point to tread carefully here.
you need to look into the conflict of interest issues
Don't tell anyone and it's not an issue.
Don't tell anyone and it's not an issue.
This isn't the army!
This isn't the Catholic church
First rule is to operate in stealth mode. This means tell no one connected to job one what you are doing in job two.
Second rule: avoid overlap and conflict of interest. All you need to do is upset one person and they'll dob you in to whomever will cause you the most pain.
Third rule: don't poop where you eat.
Are you considering advisory or implementation services?
Different insurances and qualifications will apply depending on industry.
Obviously a change in your revenue may activate different taxation obligations to what you have now.
If you make a loss in the consultancy, you can't offset this against a different source of revenue to reduce your tax obligations.
Any specialist knowledge which is a product of working at your current job is probably their intellectual property and not available for you to use elsewhere.
For example, if you developed an algorithm to interpret share market activity whilst working for xyz industries, they own that algorithm and you can't use it without their permission.
Thanks, this is helpful advice too.
It would be advisory services. I have the relevant qualifications already.
Obviously a change in your revenue may activate different taxation obligations to what you have now.
This is one thing I'm thinking about and probably need more specific advice from an accountant.
If you make a loss in the consultancy, you can't offset this against a different source of revenue to reduce your tax obligations.
Pity negative gearing doesn't work this way…
Any specialist knowledge which is a product of working at your current job is probably their intellectual property and not available for you to use elsewhere.
Thanks, this is something I'm also mindful of.
I did something similar to this, however I ensured I had enough time to satisfy my restraint of trade clause given I was targetting clients from an ex-employer (12 months).
I started out with a few others from similar backgrounds and experience in the same field, as such we grew from 4 to about 40 in 3 years. Would I recomend it? Maybe, I think it would be very hard to do on the side, which I did do for the first few months and it only worked as I was doing for clients I had engaged with 10+ years historically so they gave me a bit of flex around other committments.
For me, anything that frees you up and stops you being tied to an employer is worth it - but just be aware on the other side of the coin is that you end up giving more of your time to building something, but at least it is yours.
Thanks, this is a helpful perspective.
My time is increasingly valuable (and scarce), which is partly why I haven't just jumped in and done it. I've also worked for small business owners in the past and seen the hours they put in, so I'm weighing up if the freedom is worth it.
what advice would you give to someone starting out?
Don't give out free advice.
Consultants are not experts….graduates out of uni go straight into consulting firms all the time…….they are far from experts despite what their 1st class honours might make them think
Advice Wanted: I'm Thinking of Starting a Consulting Business
You got it back to front mate - a consultant gives advice…
If I were starting a side gig, I'd probably try to distance it from my actual name or however most people identify you so that an accidental Google (or bad yelp review) doesn't draw the attention of your current employers, future employers or competitors.
This would probably include leaving it off your linked in page and avoid identifying features if you promote your activities elsewhere on the internet (social media etc) (remember that zoosadism dude Adam Britton only got caught because someone recognised a dog lead he had captured in a photo).
One main thing you need is written contracts specifying - all aspects of the service you will provide,
- limit and scope of liability
- expected time period
- how that information can be disseminated or used (and to whom) and how often
- who will the IP belong to?
- what your role and responsibilities are,
- contact information of any other relevant party and why and when it is relevant to contact them
- agreed costs and terms and time of payment. - - Procedures and actions for delinquent payments.
- A dispute resolution process and if interstate, nominate the governing jurisdiction for any legal proceedings. -
- identify the exact property/situation the service relates to and whether it can be transferred to other situations.
consider a chat with an accountant and enquire about creating business as a limited liability company. An advantage of this is if the business goes belly up (or someone is awarded unaffordable compensatory damages against you), your liability is limited to the proceeds of the llc and your personal finances are quarantined from inclusion for the purposes of settling debt commitments accrued by the company.
ask accountant what you can include as tax deductions for your business and what the best way of keeping a record of this would be (receipts enough or do you need log book?) dry cleaning receipts or account with dry cleaner? Car cleaning, some examples may include allowable deductions for electricity, home office supplies, business equipment (including relevant software), business stationery, professional development courses and so on (amazing how much stuff you buy off school booklist that can also be used in a business…) petrol and car depreciation, parking costs, distance travelled between first and second job, accomodation, other travel, what meals? When is a steak and beer a deductible business dinner? Expenses incurred to access training for maintenance of qualifications. When can a travelling companion be a tax deduction?
Some people apportion an amount of rent for using home office - check with accountant as this will have CGT implications if you're not renting.
If renting, are you allowed to operate a business from your home?
If clients are coming to you or you are driving them around, do you have the appropriate public liability insurance? Is your car road worthy? (Can't make tax deductions against an unroadworthy car).(can't transport customers in unroadworthy car)(can't make insurance claims for loss or damage in unroadworthy car)
Seek legal advice about whether you can set a cap on any liability you may incur (include in contract if legal)
Wow, this is awesome, and just what I was hoping for! Thanks so much for your response!
I knew I needed to have a chat to an accountant, as the tax implications are what concern me the most, but you've given me several other areas I need to discuss as well.
Before thinking of becoming a consultant,be an expert in a field, and experienced enough that you don't need to ask ozb for tips :)