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Old 09-20-2018, 06:20 PM
dude cool dude cool is offline
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Default starting a consulting company

Hello, I'm looking for advice on starting a consulting company. I'm an experienced actuary and I have been working on another degree/certification as well, which I will promote more heavily than my actuarial experience. I would appreciate any advice you can offer about getting started.

I have a couple projects in the works, so at this point I'm more concerned about figuring out how to work with clients - contracts, expectations, pricing, etc, than I am about drumming up business. Maybe someone can recommend a good book or website that can help me get started.

Of course, I would also love to have more general suggestions from people who have done or are doing this. What would you do differently if you had to do it over again? Things I should watch out for?

Thanks!!
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Old 09-20-2018, 06:21 PM
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BruteForce BruteForce is offline
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I feel like there was a thread about this a while back.
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I would really hate to bring Pokémon to a gun fight.
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Old 09-20-2018, 06:31 PM
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Numerical Neuroticism Numerical Neuroticism is offline
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T-roy's thread: http://www.actuarialoutpost.com/actu...d.php?t=328859
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Old 09-20-2018, 06:38 PM
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BruteForce BruteForce is offline
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Yeah, that's the one I was thinking of. I couldn't remember who started it.
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I would really hate to bring Pokémon to a gun fight.
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Old 09-20-2018, 08:51 PM
jerrytuttle jerrytuttle is offline
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Default Liability insurance

I would think buying general liability and professional liability insurance should be on the list. If you have employees, check your state law about workers compensation insurance too.
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Old 09-20-2018, 11:35 PM
Westley Westley is offline
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Many blogs have good advice on a lot of nuts and bolts - legalities around forming an LLC or corp, insurance, website, etc.

Main concern is setting up agreements that ensure you are fairly compensated for work. You want to make sure you're providing long-term value for moneys paid, and also that when you produce value you are being fairly paid. It can def be tricky. Some companies want a fixed fee but then will ask you for extras. Others will go for hourly rates but then ask you to do a bunch of stuff and be surprised at how big the bill is. Recommend finding somebody who has done this and spend some time picking their brain. T-Roy (that linked thread) would be high on my list of people to try to connect with.

Also, recommend you allow PMs, which I believe you have currently disabled.
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Old 09-21-2018, 01:56 PM
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Get a payroll provider (e.g. ADP). The small amount you pay the payroll provider will save you hours and hours of work and reduce your IRS risk a good amount. This applies even if you're the only employee (assuming S-Corp).
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Old 09-21-2018, 04:51 PM
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Quote:
Originally Posted by Corn Row View Post
Get a payroll provider (e.g. ADP). The small amount you pay the payroll provider will save you hours and hours of work and reduce your IRS risk a good amount. This applies even if you're the only employee (assuming S-Corp).
This is true. If you pay your self a salary and take the rest as dividends you get some tax breaks. BUT if you get successful it is actually better to pay yourself a bigger salary and put money into a SEP.

Obviously get an accountant.
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Old 09-21-2018, 06:16 PM
Chuck Chuck is offline
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Some helpful stuff here...

https://www.soa.org/sections/entrepr...s-of-interest/
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Old 09-22-2018, 02:28 PM
Kalium Kalium is offline
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When setting your hourly rates (or pricing a fixed price job), don't forget to allow for all the time when you won't be doing client work directly: admin relating to your business (premises, equipment, bills, accounts, taxes), marketing time, vacation/sick/family time, CEE, conferences etc. Plus of course direct costs: office costs, indemnity insurance, medical/sickness insurance, pension, any staff overheads, taxes etc.

Even if you have some contracts lined up at outset, they won't continue indefinitely. Think about marketing, and getting your name out there, from the start. Network. Ask if you can use references from successful jobs.

Professional indemnity insurance - make sure you understand the coverage basis. E.g. "claims made" coverage effectively increases the cover, and the price, for perhaps the first 5+ years. You need to factor that in to your charging basis. (And you will need ongoing coverage for a period after you retire / cease practice).

Include in your contracts:
- clearly defined scope of your work: what is / isn't included;
- charging basis (and provision to review, say annually), including any taxes
- expenses / disbursements policy: included or in addition?
- liability cap, that ties in with your indemnity insurance;
- when you will bill, and expect to be paid
- legal basis
etc.

Think about the business you do, and don't, want to be in. Taking into account your experience, and the amount of hassle that can be involved in particular fields. (For some fields that might include which states you want to work in). Be realistic about how much you can take on - it can be hard to turn work down, but sometimes you may have to.

Don't be tempted to cut corners, either administratively or professionally. Ensure any client deliverables are fully documented, with caveats where appropriate. A single liability claim can be enough to sink a one-man business, even if you successfully defend it, because the time required is time out from earning income.

If you intend to work alone, perhaps think about linking up with someone else in a similar line to mutually "peer-review" each other's work occasionally, particularly for anything new/complex. Doesn't have to be anything too formal - just getting a second opinion on something can be helpful. This can also be a possible backup if you have to have any time out for sickness etc.
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