Professional Documents
Culture Documents
Self-Counsel Press (a division of) International Self-Counsel Press Ltd. USA Canada
CONTENTS
INTRODUCTION 1 UNDERSTANDING THE CONSULTING BUSINESS
1. WHAT IS A CONSULTANT? 2. WHO GOES INTO CONSULTING? 3. WHY DO ORGANIZATIONS USE CONSULTANTS? 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 Temporary assistance Objective review Third-party request for problem identification and resolution Surviving a crisis Initiating change Obtaining funding Selecting personnel In-house education Dealing with internal personnel difficulties
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1 4 4 4 4 5 5 5 5 5 5 5 5
3.11 Executive assistance 3.12 Government regulatory compliance 3.13 Socio-economic and political changes 3.14 Government excess funds 4. REGULATIONS AFFECTING CONSULTANTS
6 6 6 6 6
2 SELF-ASSESSMENT
1. INTRODUCTION 2. ATTRIBUTES OF SUCCESSFUL CONSULTANTS 3. ASSESSING YOURSELF AND YOUR MARKETABLE SKILLS 4. RESOURCES FOR IDENTIFYING CONSULTING OPPORTUNITIES 4.1 4.2 4.3 4.4 4.5 4.6 4.7 Consulting newsletters and websites Newspapers and magazines Consulting and professional associations Government agencies and publications Public and university libraries Continuing education courses and seminars Competitors
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7 7 8 8 8 8 9 9 9 9 10
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2. SELECTING A NAME
3. SELECTING AN OFFICE
4. SELECTING A TELEPHONE SYSTEM 4.1 4.2 4.3 4.4 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 6.1 6.2 6.3 7.1 7.2 7.3 7.4 7.5 7.6 8.1 8.2 8.3 A separate phone at home Business line terminating at answering service Business line terminating at home and answering service Overline Call waiting Call forwarding Three-way calling Speed calling Phone/fax Call display/name display Call return Call again Call answer Charging long distance calls to clients Calling cards VoIP Voice mail Generic telephone number Pager Cellular phone E-mail The Internet Pitfalls to avoid Keeping the website interesting Designing an effective web page
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Contents
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35 35 36 36 37 37 37 38 38 38 38 40 40 40 41 43 43
3. PARTNERSHIP
4. CORPORATION
5. S CORPORATION (SUB-CHAPTER OR SUB-S) (UNITED STATES) 6. LIMITED LIABILITY CORPORATION (LLC) (UNITED STATES)
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45 46 46 46 46 47 47 47 47 48 48 48
1.12 Ability to aid growth 1.13 Small firm versus large firm 1.14 Comparison 2. LAWYER 3. ACCOUNTANT 4. BANKER 5. INSURANCE BROKER 6. CONSULTANTS 6.1 6.2 Private consultants Consultants subsidized by the government
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4. SUMMARY
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2. SOURCES OF FINANCING
3. COMPETITION BETWEEN LENDERS 4. TIPS ON APPROACHING YOUR LENDER 5. WHY LOANS ARE TURNED DOWN
Contents
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6. TYPES OF SECURITY A LENDER MAY REQUIRE 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 Endorser Co-maker Guarantor Promissory note Demand loan Realty mortgage Chattel mortgage Assignment of accounts receivable Postponement of claim
78 78 78 78 79 79 79 79 79 79 79 79
8 KEEPING RECORDS
1. ACCOUNTING AND BOOKKEEPING 1.1 1.2 1.3 1.4 2.1 2.2 2.3 2.4 2.5 2.6 2.7 3.1 3.2 3.3 Separate record-keeping Double-entry and single-entry bookkeeping One-write accounting system Cash or accrual record-keeping Sales journal Cash receipts journal Accounts receivable ledger and control account Accounts payable journal Cash disbursements journal Payroll journal General ledger Personnel records Tax records Service records
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3. NONFINANCIAL RECORDS
4. OFFICE SYSTEMS 4.1 4.2 4.3 4.4 4.5 4.6 Handling new clients and projects Time records Standard form letters of agreement or contracts Billing, credit, and collection Calendars Filing systems
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5.10 Furnishings
10 INSURANCE
1. OBTAINING INSURANCE 1.1 1.2 1.3 Agencies Insurance brokers Clubs and associations
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2. PLANNING YOUR INSURANCE PROGRAM 3. TYPES OF BUSINESS AND PERSONAL INSURANCE 3.1 3.2 General liability Products or completed operations liability
Contents
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Errors and omissions liability Malpractice liability Automobile liability Fire and theft liability Business interruption insurance Overhead expense insurance Personal disability insurance
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3.10 Key person insurance 3.11 Shareholders or partners insurance 3.12 Business loan insurance 3.13 Term life insurance 3.14 Medical insurance 3.15 Group insurance 3.16 Workers compensation insurance
11 PROFESSIONAL LIABILITY
1. CONTRACT AND TORT LIABILITY 1.1 1.2 2.1 2.2 2.3 2.4 2.5 2.6 3.1 3.2 3.3 3.4 3.5 3.6 Contract liability Tort liability Counterclaims Conflict of interest Conflicting interest of clients Delegation of part of contract to employee or subconsultant Third party damages Unclear expectations by client Client control Cost estimates Carefully drafted contracts Free opinions Law Subconsultants
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3.10 Communication 4. PROFESSIONAL LIABILITY INSURANCE 4.1 4.2 4.3 Increasing deductibles Comparing prices Changing the type of coverage
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4.10 Monitoring payment trends 4.11 Follow-up of late payments 4.12 Involving client in assignment 5. BILLING FOR SERVICES 6. WHY CLIENTS PAY LATE 7. COLLECTING LATE PAYMENTS WITHOUT LEGAL ACTION
Contents
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8. LEGAL STEPS IF ACCOUNT REMAINS UNPAID 8.1 8.2 8.3 Collection agency Small-claims court Lawyers
13 SETTING FEES
1. DAILY BILLING RATE (PER DIEM) 1.1 1.2 1.3 Labor Overhead Profit
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121 121 121 122 123 123 123 124 126 126 127 127 127 127 128 128 128 129
2. HOURLY RATE 3. CALCULATING A FIXED PRICE QUOTATION 3.1 3.2 Determining a fixed price estimate Tips on preparing fixed price estimates
4. FIXED PRICE PLUS EXPENSES 5. CONTINGENCY FEE 6. PERCENTAGE FEE 7. PROJECT VALUE FEES 8. RETAINER FEES 9. EQUITY FEES 10. UTILIZATION RATE 11. VARYING YOUR FEES 12. INCREASING FEES 13. INCREASING PROFITS WITHOUT INCREASING FEES
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2. PUBLIC SECTOR 2.1 2.2 Making contacts and obtaining information Understanding the government approval system
3. GRANT CONSULTING
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137 138 138 139 139 139 139 140 142 143 143 143 143 144 144 145 145 145 146 147 147 147 147 148
3.10 Lectures 3.11 Teaching 3.12 Seminars and workshops 3.13 Free media exposure 3.14 Radio and television talk shows 3.15 Letters to the editor 3.16 Writing articles 3.17 Writing a book 3.18 Have articles written about you 3.19 Announcement columns 3.20 Newsletters 3.21 Website
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Contents
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3. DURING THE INTERVIEW 4. AFTER THE INTERVIEW 5. WHY YOU SHOULD TURN DOWN BUSINESS 6. HOW TO TURN DOWN UNWANTED BUSINESS
17 CONSULTING PROPOSALS
1. WHAT IS A PROPOSAL? 2. PUBLIC VERSUS PRIVATE SECTOR PROPOSALS 3. SOLICITED VERSUS UNSOLICITED PROPOSALS 4. SIMPLE AND FORMAL PROPOSALS 4.1 4.2 Simple proposal Formal proposal
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157 157 158 158 158 158 159 159 162 162 162 163 163 164 164 164 164 165
5. GUIDELINES AND FORMAT FOR A SUCCESSFUL PROPOSAL 6. PRESENTING YOUR PROPOSAL 7. PROPOSAL FOLLOW-UP 8. WHAT TO DO IF YOUR PROPOSAL IS NOT ACCEPTED 9. HOW TO AVOID GIVING AWAY FREE CONSULTING 9.1 9.2 9.3 9.4 9.5 9.6 9.7 Potential client interview or discussion Analysis of clients need Detailed advice in the written proposal Potential future benefit Additions to the original fixed price contract Follow-up consultation Relatives, associates, and friends
18 CONTRACTS
1. ESSENTIALS OF A VALID CONTRACT 1.1 1.2 1.3 1.4 1.5 Offer Acceptance Consideration Competency Legality
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4. TYPES OF CONTRACTS 4.1 4.2 4.3 4.4 4.5 4.6 Letter of agreement Letter of agreement with general terms and conditions appended Formal contract Subconsulting agreement Agency agreement Letter of retainer agreement
19 TIME MANAGEMENT
1. KEY STRATEGIES 1.1 1.2 1.3 1.4 2.1 2.2 2.3 2.4 2.5 2.6 Set priorities Be organized Delegate Be decisive Use voice mail effectively Avoid too many telephone calls Avoid overscheduling Avoid too much paper Follow meeting agendas Avoid perfectionism
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Contents
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CHECKLISTS
1 2 ARTICLES IN A PARTNERSHIP AGREEMENT GOVERNMENT CONTRACT 39 184
TABLE
1 MAJOR CONSULTING SUBJECT AREAS 2
SAMPLES
1 2 3 4 5 6 7 8 9 START-UP EXPENSES BUSINESS PLAN FORMAT GENERAL INVOICE DETAILED INVOICE FIXED PRICE COSTING SHEET PROPOSAL FORMAT CONTRACT FORMAT LETTER OF AGREEMENT (PREPARED BY CONSULTANT) LETTER OF AGREEMENT (PREPARED BY CLIENT) 14 59 115 116 125 160 171 175 176 178 180
WORKSHEETS
1 2 3 4 5 6 7 8 9 SELF-ASSESSMENT ESTIMATING START-UP EXPENSES MONTHLY EXPENSES MONTHLY PERSONAL EXPENSES OPENING BALANCE SHEET (NEW BUSINESS) INCOME AND EXPENSE FORECAST STATEMENT (NEW BUSINESS) CASH FLOW BUDGET PERSONAL NET WORTH STATEMENT STATEMENT OF ACCOUNTS RECEIVABLES 11 15 16 17 65 66 67 68 69 88 89 90
10 PROSPECTIVE CLIENT SHEET 11 NEW CONSULTING ASSIGNMENT SHEET 12 TIME AND SERVICE RECORD
C h a p t e r
TABLE 1
TABLE 1 CONTINUED
Land use planning Landscaping Leasing Equipment Transportation Library design and services Licensing Lighting Lithography Mail order Marketing programs and services Marketing research and analysis Marriage and family relations Material handling Materials science Mergers and acquisitions Microforms Museum and exhibit planning and design National security and defense Naturalization New product design New product introduction Nutrition Office design Office management Operations research Opinion polls Organization analysis and development Packaging Personal image Personnel Planning (long range, strategic) Political campaigning Pollution control Air Noise Water Product design Professional practice management Public relations Publishing Purchasing Real estate Records management Recreation planning Reliability and quality control Religion Relocation services Research and development Safety services Accident investigation Expert witness Fire protection Product liability Program design and installation Sales Forecasting Management Personnel recruiting Policy and planning Retail/wholesale Salvage and reclamation Sanitation Security (investigation and loss prevention) Shipping Small business development Social services Sports Standardization Statistical services Stockholder relations Systems analysis Taxes Technology transfer Telecommunications Television and radio Traffic and parking Transportation Urban renewal Utilities management Venture capital Wage and salary administration Warehousing Womens issues and concerns
People who understand government operations and the contract process, or who have built up contacts in government, politics, or industry over the years
than the internal advice of someone who may be acting out of self-interest.
looked upon as being independent and unbiased with the expertise and time to selectively screen and recommend prospective candidates.