Thursday, May 31, 2007

More Advice

Had lunch with a buddy who owns his own sole-proprietorship gig...its more of an on-the-side thing though (he has a normal 9-5). He was saying that his lawyer told him that even with an incorporation, people can still sue you personally because its your personal services that you're selling, not a manufactured product.

He also said that apparantly liability insurance is REALLY expensive for self-existing I'll have to look around a bit more at what other contractors do to reduce their risk.

So it's sounding like going to sole-proprietor route is the way to go...need to look a bit more into it though...hmmmm, more to think about...


Accountant Meeting

Met with an accountant this morning and it went beyond my expectations. Great advice and some extra things to think about.

I explained what I was looking to do, and he said that going the incorporation route didn't make sense unless you were making more than you were spending. Otherwise, it's just as easy to roll into a sole-proprietorship and max out on RRSP's come tax time. You can still get liability insurance as a sole proprietorship, which you'd probably want with an Inc anyway, so although there is extra protection it might be overkill.

So really...I don't "need" an accountant just yet other than bringing my taxes in for them to look over and do. This particular firm does alot of technology based companies, as well as contractors, which is excellent since they understand more about what I'm trying to do.

So we'll see...more to think about for sure...


Wednesday, May 30, 2007

Sole Proprietorship or Incorporation?

I've been courting friends asking for their thoughts on whether to go Sole Proprietor or Incorporation for my new little venture.

Incorporation of course is where you have a legal separation between yourself and your business. The supposed benefit is that you have a "tax shelter" type of setup: you work for your money, but you pay way less taxes personally. You then, as the business owner, use the money in the company to invest in things (mutual funds, stocks, etc.) to get your money working for you without the personal income tax hit. The downside apparantly (from what I'm learning) is that you don't have direct access to that cash. You can't just say as an owner "oh, I want to withdraw x number of dollars from my company". It's not like may be the main director or shareholder or however the term is, but you don't have cart-blanche to raid the company coffers...governments have issues with that. Also, even though there's a seperation between yourself and your company, you still need (or should) invest in Error and Ommission insurance to CYA.

Sole Proprietorship is where you are the reap all the profits from the business. The switch with this is that you then have to do something with that money so that you're not paying crazy taxes if you hit big contracts throughout the year. This means, from what one buddy has told me, that you invest into RRSPs with the extra cash, which reduces the tax hit. There's also the risk of liability: if you get sued, then you and all your possessions (including your house, your car, whatever) is fair game. Now apparantly that holds true for Incorporations as well, but with maybe different rules or more limiations? Not sure...need to look into it more.

I should know more after tomorrow...more to come...


Tuesday, May 29, 2007

First Interview This Week!

I've got an interview lined up this week for a contract gig. I'm somewhat excited, but at the same time there are some longer contracts that are floating around out there too...but still, for the hourly rate they're offering and it being technology that's right up my alley, I wouldn't mind the shorter term.

I'm also wondering what I should do for a name for the business. Most people I know who are into independent consulting just use their name with a ".com" at the end, or something like that.
i.e. Joe Schmoe Consulting, or Consulting. My name do something like that.

I was thinking about coming up with a Donald-Trump-Apprentice type name. Something like

Y'know, some one word thing that sounds as cheesey as Trump's gold plated toilet bowl.


Monday, May 28, 2007


Startup Checklist
There are a few major things that need to be dealt with in setting up your private consulting business:

Register a Business
You have to register your business to get any of the balls rolling. I'm thinking that this has to happen first because you won't know if your business name is available until a name search is provided. And having a name is important because you'll need it to get...

Business License
In my city, I have to get a business license as well as a permit to run a home-based businesses. This is so that it stays fair between those that actually pay business tax because they have a dedicated business storefront/office and those of us that want to relax at home while writing everything off. Part of the application asks for your business name though, which is why I'm assuming you need it. But oddly enough, that means that really your first stop happens after you...

Hire a Lawyer
Lawyers are necessary for setting up a business, and don't try and talk your cheap little ass out of that statement. Lawyers can provide services and knowledge that we as code-monkeys just don't know, and they can probably expedite the process faster than we would on our own. The lawyer I'm going to be going with does a full incorporation service, including the business lookup. Once you have all that then you still need to ...

Hire an Accountant
I'm not even going to think about Quickbooks...I have no clue how to pay myself, how the tax structures are set up, etc. That's where these guys come in.

Startup Costs
Other things to think about for developers are startup costs. "Startup costs, how can there be startup costs? It's just me coding!" Yes, but have you considered...

Because your work will probably want theirs back when you leave.

Software (i.e. MSDN Subscription)
Because your work wants those disks back with their laptop.

Error and Ommission Insurance
Some head-hunting agencies will cover this, or will offer a program where you can opt in...but its always good to ask and its always good to CYA no matter what.

Health Insurance
Might not be as big a deal for some, but at the same time remember that you're doing this on your have to create your own safety nets. So if you aren't married to someone that has fantastic benefits, you need to consider getting some for yourself...even if you are an army of one.

Now I'm sure that most of these things can be written off as a business expense on behalf of your company...but have you thought about how you'll fund your company as well? Where will the initial money come from? Will you get a company credit card, and if so where will the initial payments come from if you don't get a contract right away? All things to consider...


Moving On...

"I tried to be perfect, It just wasn’t worth it...nothing could ever be so wrong...
I’d say all the words that I know just to see if it would show... that I'm trying to let you know...
That I’m better off on my own"

- Sum 41, Pieces

I woke up one day and said "Screw it...I'm going independent". And that in a nutshell brings us to this blog. But let's add some context around this...

I'm a software developer living in Canada. I've been in the industry since 2000-ish, and work in a provincial capital. I've worked a number of gigs over those years, and each one has had some aspect of WTF attached to it...some good experience and alot of bad experience...the old "wow, now I know what NOT to do..." type of situations.

I've been with my current company for a while now, and its not a bad one. But its also not perfect...and looking ahead, I'm realizing that I'm just not happy. There's no real growth potential for me here...they say there is, but not in what I'm really passionate about. So what do I do? Do I just jump ship to another company where I know there will be the same issues that I'll have to deal with all over again, and with zero seniority? Why bother...better the devil you know...

No, instead I'm going to be embarking on a new adventure: creating my own company and working as an independant consultant...a gun for hire...a bounty hunter...a developer in control of their own destiny.

One thing I've found is that there's very little out there that talks about what you need to do for setting up an independant consulting business and what's all involved. That's where my blog comes in: I'll be posting about all the various events that occur on the road to enlightenment (or ultimate doom...there's always risk).

So come along for the ride, and hopefully I'll be able to share information that will helpothers out there who want to start on their own path to freedom and independence.