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How-To:business side of software consulting

I'm considering leaving my full time job and starting a software consulting business with a friend of mine. We have a product that is currently generating some meagre revenues, and I'd like to supplement that with software consulting with the contacts that I've built up over the years.

Can anyone recommend any websites, articles or books that talk about the business, legal and tax how-to side of software consulting?


Sunday, April 21, 2002 has very good books about small business issues in general.

I have not read any books specific to software business issues that had any truly valuable insight. 

You might try reading but that group tends to devlove into H1-B arguments very quickly.

Sunday, April 21, 2002

I've seen someone recommend _The Computer Consultant's Guide_ by Janet Ruhl.

Christopher Wells
Sunday, April 21, 2002

>>I've seen someone recommend _The Computer Consultant's Guide_ by Janet Ruhl.

Her site is full of stuff, and including the latest info on rates in the industry. Check out her site at:

Albert D. Kallal
Sunday, April 21, 2002

I say don't get caught up in the legal quagmire until this is more solid.  For example,  get one client first, get some idea of REAL revenue coming in, ....

If that pans out, then form an LLC, C-Corp, or whatever.  And leave the details to your accountant.  Stick to the consulting, ie: dont try to become an accountant, b/c your consulting will suffer.    I use Quickbooks to keep the book of my corp, but some people farm that out as well.  All depands on your time and "control freak" factor.

Good luck.

Sunday, April 21, 2002

Oh yea, isn't the cardinal rule  "Don't quit your dayjob" ?
Be careful quitting first, w/o having concrete possiblities lined up.  That would put a lot more pressure on your venture to produce immediate results.

Now that I think about it more, initially, I say dont get bogge down in the legal stuff, until real checks are arriving, and you have a real need for a corpration. 

Till then, you can just declare your side income on your 1040 schedule-C (Profit or Loss From Business)  and take all the requisite business deductions against that income as well.

Sunday, April 21, 2002

Bella's advice is good. It's all about revenue. Don't set up an office (outside your house that is) or undertake any big expenditures until you've got money coming in.

On that subject, the most successful business model for starting does seem to be to work for some big company for a few years and then farm the contacts you make.

A friend of mine was able to get a string of *really* high paying jobs from friends who had gone to other big companies and needed consulting. The difference seemed to be that, whereas people competing in the general market faced a lot of pressure on their fees, this guy used to charge literal fortunes. In a few years, he has bought two other multi-million dollar companies. That's how much he made.

Hugh Wells
Sunday, April 21, 2002

I recommend that you find a company to handle payroll and taxes (even if you have only two people) such Paychex or another national firm.  They will handle everything including quarterly taxes and W-2 forms.  Quite nice for a low cost.

The first thing you need to do is find a good book about professional networking.  Read it and get yourself to as many organizational meetings that you can find time for.  The most important thing a new consulting business can do is meet people.  Even if they are not your intended clients they may have friends or business contacts that may need your services.  Here in Atlanta we have a strong technical community called TAG (Technology Association of Georgia) that is great for networking.  Find something like it in your area and keep attending.

The last item to learn is marketing.  I recommend a book called "The Green Banana Papers" by Chris Coleman.  She has written a great book that will teach techies the beginnings of marketing and how to establish your company to others.

Chris Woodruff
Sunday, April 21, 2002

Luckily, he already has a client base in mind, as they are currently users of his software.  This is ideal, as he already has a foot in the door AND has proven expertise.  He can skip right ahead of the networking step, and get to marketing his services.

Sunday, April 21, 2002


You might want to take a look at:

and then more specifically at:

Hope they are of some help to you.

Good luck!


Michael Levine
Tuesday, April 23, 2002

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