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Have a client or two ready to go—also don’t plan on paying yourself for the first 12 months. I’d also suggest a partnership so it’s not all on you. My lessons learned.
Actually, follow up question to this: I’m in a somewhat niche industry. And I want to avoid any conflicts of interest while securing my 1-2 clients. Do you have a recommendation for how to best approach picking up the first 2 so that I don’t trip any compliance wires at my current consulting firm?
LLC first, get contracts ready to go, have 1-2 clients ready to go, calculate your “needed” rate, create an online presence, market yourself, build branded deliverables, network A TON, make about 5-10 calls a day to your network, etc.
I'm not nullifying anyone else's advice here, everyone has different lived experiences and I mostly agree but here's my take:
- Start with your vision / strategy and work backwards. You may get some work but people rarely get very far without knowing where they're intending to go (at least loosely, you dont need to overengineer like a corporate mission/vision/values unless it helps you structure and plan). For example - That network like crazy and make a bunch of calls advice is definitely needed for some models but not others -- I work with larger companies and PE firms. I'm not cold-calling those. And I don't go down-market because the bill rate is often lower for the same time commitment. I really just needed a few good clients to get started.
- Treat your company like any other company. You want to think through your key functions: marketing & go-to-market strategy, HR / hiring process and needs, Tax / legal entity structure, and everything else critical to keep the lights on. I'm sure compliance changes by offering just as much as it does by state.
- You will want to think about how much you'll reasonably earn in year one. For example, if you're going to be small Y1 then you may want an LLC - but if you have a pipeline and expect to eclipse say 200k NI, an S-Corp may make more sense for you. You can change and elect to backdate to Jan 1 but thats usually by March 15 unless you have an exception. I realized that in my first year and luckily ended up changing at the deadline which saved an est 15-20k in taxes.
- Its all on you. You need to find clients, negotiate contracts, deliver said contracts, look for new clients before delivery ends or find staff to fulfill the demand, bridge the cash cycle (no one gets how bad net 60 is until you're on the hook for payroll and client travel out of your personal savings for that first ~3 months - ex. say you bill monthly starting work Jan 1. Well you invoice Jan work Feb 1, meaning you get paid for Jan work April 1 assuming they pay on time). You can delay your own pay but your subs and employees cant. Thats a very real cash outlay upfront. On the topic of it all being on you, I also love that other person's comment on build branded materials... I definitely missed my slide masters and repositories.
- Contracting can take a while. You're not a big name (likely). You probably have less bargaining power and may have more hoops to jump through. Most things in entrepreneurship take longer and are harder than you expected. Plan accordingly.
- Be careful with hiring/firing and equity. I don't advocate for partnership unless you have worked with someone and know they're bringing equivalent value and have clear breakup clauses. Know employment laws.
- I say that partnership bit knowing full well entrepreneurship is lonely; find friends that are also entrepreneurs. You dont need to force a partnership, but it really is nice to have someone to bounce ideas off of.
This is extremely helpful. Thank you!
Sure, what's your question?
My answer's similar to my other in that no one solution is good for every customer.
Profile your target customers. The best answer is going to be putting yourself in locations they are seeking information pertaining to your expertise. Maybe this is publishing content or networking, but it could also be industry expos where you're speaking. Just make sure you have a clear call-to-action (CTA) or intake model that feeds your pipeline. Be purposeful with your networking - and recognize everything is networking when you own a business.
The worst way is going to be just throwing content into the wind with no strategy nor catching mechanism.