Consulting Crash Course: Introduction

Overview

• Presenter: Drew from Hourslogger
• Topics Covered:
  • Definition of consultants
  • Pros and cons of consulting
  • Differences between contractors and employees
  • Keys to getting started in consulting

Definition of Consultants

• Online Definition: A person who provides expert advice professionally.
• Presenter's Definition: A person who sells their skills and time for money.

Pros and Cons of Consulting

Pros

• Potential for higher earnings and faster career advancement
• Greater control over schedule and work environment
• Ability to choose clients and work location
• Control over marketing and branding

Cons

• Income and job stability can be uncertain (though this varies with success)
• Responsibility for self-employment taxes, healthcare, and benefits
• Requirement to work non-billable hours
• Constant pressure to perform and adapt

Independent Contractors vs. Employees

Independent Contractors

• Provide services under contract
• Paid on a freelance basis, often through their own limited company
• No income tax withheld by clients
• Legal term indicating non-employee status

Employees

• Receive salary and benefits
• Employer manages tax withholdings and provides W-2 forms
• Covered by employment and labor laws

Key Legal Distinctions

• Contractors set their own rates, manage their time, and provide their own tools
• Employees are directed by employers and receive benefits
• Importance of being correctly classified as an independent contractor
  • Working for multiple clients
  • Having control over work schedule
  • Signing independent contractor agreements

Keys to Getting Started in Consulting

• Financial Planning:

  • Aim to generate income quickly
  • Set deadlines for receiving first payment
  • Have savings or credit to cover expenses for 3-6 months

• Business Setup:

  • Establish good bookkeeping, accounting, and legal structures
  • Build trust and sell services effectively

• Personal Skills:

  • Be a problem solver
  • Maintain notes and preparedness

• Starting Transition:

  • Consider starting the business alongside current employment for security and client-building

Conclusion

• This video introduces the fundamentals of consulting.
• The next video will cover how to start a consulting business.