Started a consulting business!

[rocklebock]

I posted a complainypants version of this news, but here's the positive version:

I started a consulting business! Took care of all the official paperwork and shit (I *think* I'm doing it right?!? God, I'm terrified of the tax man) and I am getting under contract with two clients.  Just did my first billable work today.

This is something I've wanted to do for a long time, but had doubts about. My particular area of expertise is quite specialized, and most of my clients will be in the arts/culture sector, where no one has piles of spare cash for consulting services. I honestly didn't know if there was real demand. So I was quite pleasantly shocked to find a couple clients very quickly, with nothing more than some casual networking. If you've ever thought of doing consulting or freelance work, but doubted that there are clients out there who would pay a decent hourly rate for your expertise, consider my example: When I describe what I do, people openly speculate that it probably doesn't pay very well! I publish things no one reads in places no one has heard of! My degrees are in notoriously useless humanities fields!

Starting a business has definitely put me way out of my comfort zone, but it's quite exciting and already a great learning experience. I'll still be working for The Man until I reach FI, but then I hope to transition to part-time consulting work. Right now I'm just thrilled to see that through a tiny bit of initiative, it looks like I'll make an extra $10k-$15k this year - getting me to FI that much sooner!

[Exflyboy]

Thats awesome,

I have often wondered about this idea myself.. I am a professional engineer having just retired and starting to think about what might be next.. There is a lot of demand for work in my field but also huge consequences if you screw up..:)

Frank

[ShortInSeattle]

Congrats!  :)

[rocklebock]

Thanks! Frankh, I know a structural engineer who works on huge public buildings, and having that kind of responsibility seemed completely overwhelming (He was in the process of FIRE-ing last I heard - I think I know why). If I screw up, the worst thing that can happen is some public program won't be executed as planned.

[spoonman]

Congrats!  Maybe if your consulting business takes off you can part ways with The Man.  That might be possible sooner than you think.

[MrCash]

Awesome!  I want to do something like this myself one day, but I feel like there are so many unknowns.  Hopefully by then I will know enough to feel confident going into self employment.

[rocklebock]

Awesome!  I want to do something like this myself one day, but I feel like there are so many unknowns.  Hopefully by then I will know enough to feel confident going into self employment.

Yeah, I'm way too risk-averse to just quit my job and go into 100% self-employment, so this is really testing the waters, and hopefully accelerating FIRE a little.

[ViragoStache]

Congrats!!  Very excited to see sucess stories, and this is one. 

It's okay to be risk adverse, that's just how some of us are.  Just don't let that keep you in a place that is saping the life out of you.  If you like your "day job" and are go working it until FI, great, that will give you the chance to put in a few safety nets into your plan.  Plus you can build up your clientele until you FI.  And as spoonman said, you might be able to go earlier (or it will feel less risky :).

[Sunny]

Do you recommend any checklist of things to do, i.e. license, insurance, etc. ?

Congratulations and good luck.

[pac_NW]

Way to go! 

[EnergyConsultant]

Way to go. I took the plunge 3 years ago and couldn't be happier. Flexibility, stretches of no-work (a-la part-time retired), interesting projects, and still good money. I quit cold turkey, with no consulting contracts in sight.

[BlueHouse]

I started a consulting business! Took care of all the official paperwork and shit (I *think* I'm doing it right?!? God, I'm terrified of the tax man) and I am getting under contract with two clients.

Congratulations!  I set mine up 5 years ago and aside from the gut-wrenching fear of losing it, it's way better than the alternative.  How did you set up your business?  Sole Prop?  LLC?  Corp?  Other?  I set up as as an S-Corp, but looking back, an LLC would have been just as effective with a fraction of the paperwork. 

The best advice I have is to set up a solo 401K or SEP IRA or another work-funded tax-deferred account.  Depending on how you set up your business, you can set aside up to $50K per year.  You have until the end of the year to set this up.  And pay all of your taxes.  Good luck!

[rocklebock]

BlueHouse, I'm set up as a sole proprietor just because it's the easiest and cheapest option by a long shot in my state. I recognize the risks and limitations, and will probably transition it to an LLC as I get more serious. Thanks for the advice about accounts - I definitely need to investigate that more.

Sunny, unfortunately I didn't find a checklist that covered absolutely everything I had to do. Certain to-do items are the same for any small business, but then other things vary widely based on your location and the nature of the business you're starting. The single most helpful source was a booklet published by the Small Business Administration in the city where I live. Your city or county probably has something similar.

I really appreciate all the kind words. I was skittish about committing to this, but now it's done, I'm already wondering why I waited so long.

[BlueHouse]

BlueHouse, I'm set up as a sole proprietor just because it's the easiest and cheapest option by a long shot in my state. I recognize the risks and limitations, and will probably transition it to an LLC as I get more serious. Thanks for the advice about accounts - I definitely need to investigate that more.

Sounds like a good plan.  No need to change it until there is a reason to change it.  I typically over-prepare for every possibility, so I chose the  most complicated option "just in case".  I haven't needed it yet, but I'm paying extra for it in fees and time.  I do get to save some on taxes, but now that I've moved into DC, there are additional filing requirements for my structure and it's making life more complex than I anticipated.  Good on you for doing this!