If you’ve been thinking about going solo or have seen colleagues make the leap to independence, you might be wondering if it’s the right path for you too. You’re in the right place to explore what it means to be an independent consultant, how to make the transition, and how to build a fulfilling and rewarding career.
Whether you’re new to technology consulting or a seasoned consultant working at a firm or independently, this guide will provide everything you need to master being your own boss and delivering top-tier consulting services to your clients.
As you begin your independent consulting career, it’s essential to get your legal paperwork in order, starting with your business registration. This involves choosing a business structure that suits your needs. Many independent consultants start as sole proprietors, but later transition to an LLC (Limited Liability Company) or Corporation.
So, what’s the difference? By default, if you don’t take any formal steps, you’ll operate as a sole proprietor. This means you’ll report your consulting income along with your personal tax filing. There’s a section in your annual tax return for this. However, I recommend setting up an LLC, at the very least, or a Corporation. These structures are better suited for growth and offer significant tax benefits, which we’ll discuss in more detail below.
Read more about business structure here.
The short answer is YES, absolutely. Just like you have home or car insurance, you need insurance to protect your business. You hope you’ll never need it, but you’ll be relieved to have it if something goes wrong on one of your projects.
Essential Business Insurance Coverages: