Published by the IEEE CONSULTANTS' NETWORK, P.O. Box 373, Lexington, MA 02420-0004 (781) 893-8379
Copyright © 1997 IEEE Consultants' Network
With the Summer comes the Fall, and with that comes, hopefully, new contract and/or consulting opportunities. The past year has presented to us a strong Massachusetts economy as well as a shortage of engineers and so a greater demand for engineering consultants.
We at the IEEE Consultant's Network continue to work help all of us learn and get involved in consulting. We are planning more members meetings where we will all get to hear expert speakers talk about many of the topics one has to deal with when consulting. The Network is also looking into other ways to better market our services. Our Network is also continuing to grow; we have 30% more members this year than we did last year. Thanks to several of our members, we were able to put together a mailing of 401 directories from several mailing lists. The mailing list was comprised of clients who called in to IEEE CNET over the last year, other client contacts, our own membership list, and the top 100 Massachusetts hi-tech companies for 1997. Six IEEE CNET members helped put together and get out the directories.
But you too can increase your involvement in the IEEE CNET! First, come to our volunteers meetings which meet the first Monday of every month, except July and August,see the agenda on the web page for locationn. Moreover, just to make your time worthwhile, we subsidize your dinner by $7.50. Second, share your ideas with us by contributing articles to this newsletter. The information for contacting us is down below. Finally, come to our meetings. They are free and open to the public. We meet at Arthur D. Little in Cambridge usually on Wednesday, once each month. Check www.boston-consult.org as well as future issues of this newsletter for more information. Be involved with IEEE CNET. Be active. But most of all, be successful.
This newsletter welcomes fresh new articles and ideas from all of you. Here is a chance to contribute your thoughts, ideas and experiences for all to see and read. To contribute to the newsletter, call me at (781) 444-2226 or e-mail to me at rongood@world.std.com.
Opinions expressed in the Consultant's Network Newsletter are those of the authors and do not necessarily reflect those of the editor.
BANKS, ACCOUNTANTS, AND LAWYERS
Selecting your bank, accountant, and lawyer is probably not the most exciting part of the consulting business, but these professionals can be important allies. One of the first things you will do in starting a business is open a business checking account. This makes keeping track of business expenses much easier, and that helps come tax time.
BANKS
Banks offer many varieties of accounts with a bewildering array of fees, minimum balances, and so on. The details will depend on the bank but the key points are generally common. A sole proprietorship can use a personal account (sometimes called a "DBA" account, for "doing business as") including interest-bearing NOW accounts. These accounts also tend to have the lowest fees. Partnerships and corporations need a commercial account. Opening a corporate account requires a "certificate of corporate vote" (or similar name), which is a document stating who is authorized to use the account, and which is embossed with the corporate seal. Many banks require a copy of your business license or fictitious name statement. Since you've undoubtedly been using a checking account for years, you are already familiar with check charges, etc. As a consultant, you will write more checks than you will deposit (in contrast with a retail business), so check charges are more relevant than deposit fees. It is worth shopping around for the best package and often the smaller banks will be the most competitive. If you can arrange overdraft protection (where the bank in effect gives you a loan if you go over the balance in the account), this can give great peace of mind.
What should you do if one of the checks you've deposited is returned? First, call the client to discuss the problem. It is possible that it is a simple timing problem, and the check will be honored if re-deposited. One attempt at re-depositing the check is reasonable (but bear in mind that your bank is going to charge you each time it returns a deposit item). You can ask the bank to hold the check for collection (if enough money is deposited to the customer's account, you'll get yours). The Better Business Bureau will be able to tell you if there have been previous complaints, but they can't help you collect. Small claims court may help if the dollar amount falls within the proper range. A letter from your attorney will often speed up collections (once again, remember that you will be paying for this).
ACCOUNTANTS
As a business you will have to keep accurate records of receipts and expenses, and you will have a more complicated tax return than before. It may make sense to work with an accountant rather than trying to deal with it on your own. Your accountant will help you set up accounts and can explain the procedures you should follow (remember, the better order your records are in, the easier and cheaper tax time will be). Ideally, you can prepare the necessary documents and forms and have your accountant review them. Accountants can advise you on tax deductions, billing procedures and the issue of extending credit to your clients. Just remember that accountants are professionals þ and their time isn't cheap! You don't want to ask your accountant to handle bookkeeping chores (such as recording receipts and expenses), though you might want to use a bookkeeping service for this. Accountants may be one-person outfits, partnerships, or larger companies. In general, you won't need the more elaborate services of the larger firms; you are probably best off with a small firm.
LAWYERS
Another professional with whom you will want to establish a good working relationship is a lawyer. You will be involved in contractual arrangements and it is smart to have competent legal advice on such things. It is simpler and cheaper to see a lawyer before you have a legal problem; with luck and planning you may avoid the problems altogether.
In the same way, the time to look for a lawyer is before you need one. That way you won't feel pressured to work with someone because you've run out of time to find someone with whom you're comfortable. You can ask the Bar Association to give you a referral, which will be based on location and type of legal work. Make an appointment for an initial consultation (which ought to be free, but make sure of this first) and explain your needs. If while talking with the lawyer it becomes clear that this isn't the right person for you to work with, ask for a referral to someone else who might be a better match. Your accountant may be able to refer you to a good lawyer.
It is generally best to work consistently with one lawyer rather than treating each situation in isolation. You want a lawyer who you are comfortable with, someone you can count on. For example, people vary in their aversion to risk and there is no real limit on how much you can spend on legal issues -- so you want a lawyer who knows how much is enough for you. You don't need, and can't afford, to eliminate all possible loopholes; you do need to be sure that you are adequately protected.
Another cost-saving factor is the willingness of your lawyer to review documents that you draft (it can be a lot less expensive than having it written). You will want a lawyer that is able to understand the basics of your business. For patents, trademarks, and copyrights you'll need a specialist in these -- the legal issues surrounding software are especially tricky, and are still evolving.
TIME IS MONEY!
When dealing with any professionals, one key piece of advice: YOU are paying the bill, so you should keep a close watch on the clock. You will find their services well worth the investment, but there is no reason to pay for more of their time than you need. Always prepare for a meeting and know what will be discussed, so that you can handle your business efficiently. Time is money!
A rule of thumb to use in assessing your relationship with legal and accounting professionals: the size of the firm you deal with should equal the size of your firm. Unless there is a special reason for doing otherwise you are likely to get better service from similar sized businesses.
MEETING SUBJECT SURVEY
In April, a survey to determine the membership preferences for subject matter for future meetings was taken. For the purpose of this survey, the following categories of CNet meetings were defined:
Fifteen members responded and the meeting subject areas were ranked as follows :
| Area | Score | Rank |
| Consulting | 1.27 | 1 |
| Legal Issues | 2.40 | 2 |
| Tools | 3.03 | 3 |
| Specific Fields | 3.67 | 4 |
| Social | 4.07 | 5 |
In addition to ranking the meeting subject matter, the survey asked for specific comments. The following suggestions were made and will be considered:
How did we do in the 96/97 Season? In the 1996/1997 season, the subject areas for the 10 regular meetings break down as follows:
| Area | # of Meetings |
| Consulting | 3 |
| Business | 4 |
| Tools | 1 |
| Specific Fields | 1 |
| Social | 1 |
Plans for the Future:
Next year, we will attempt to put a little more emphasis on talks that are more directly related to consulting. The suggestion to establish the year's full agenda at the start of the season is a good one but may prove difficult to accomplish. In any event, we will try to improve the lead time for meeting announcements.
THE CONSULTANT'S NETWORK Officers/Committee
| Chairman | Ted Kochanski | (781) 861-6167 |
| Vice Chairman | Brian Clifton | (508) 443-7898 |
| Secretary | Pat Everett | (508) 369-1589 |
| Treasurer | John Meyn | (508) 369-1095 |
| Past Chairman | Jeff Goldberg | (781) 229-1530 |
| Referral Service | Carl Frost | (508) 653-5673 |
| Database | Bruce Andrews | (603) 888-0915 |
| Public Relations | Dale Worley | (617) 899-7949 |
| Newsletter | Ron Goodstein | (781) 444-2226 |
| Literature/Mailings | Jim Littlefield | (617) 666-4615 |
| Web | Phil Martel | (781) 978-0875 |
Other e-mail addresses