If you're thinking about hanging up your shingle as a 
consultant, you probably already have most of what you'll 
need.  Odds are, you know the business, you have the skills 
and experience, you know or have the certifications you'll 
need, and you may have a good idea of where your first clients 
will come from.  The following steps can help you start on the 
right track:

1. Prepare a personal inventory
   You want to be sure you have the basic skills any independent 
   contractor needs, no matter what the business.  For example: 
   you will need to
 
   · organize an office, 
   · handle records and finance, 
   · manage your own time, 
   · promote your services, and
   · negotiate contracts.

   Don't be reluctant to hire experts to help with some of these 
   tasks, and when appropriate barter your expertise for theirs. 


2. Write a Business Plan
   As soon as possible after you've decided on your consulting 
   path, you should put together a business plan: write down 
   where you want to go and how you want to get there.    

   You business plan should spell out:
   · What services do you plan to sell?
   · Who do you think will buy your services, how big your 
     market is, how much income you expect to make, and when?
   · What resources you'll need to do this (money, equipment, 
     extra help)?
   · What personal qualifications do you and anyone working 
     for you has so that you can meet the above challenges?


3. Organize your Business 
   Once you are ready to get started, you'll need to decide 
   how to structure your business.  Will you run things simply 
   as sole proprietorship, a partnership, or a corporation?  
   Consult with a business attorney or your accountant to 
   help guide you in selecting a structure that fits your 
   circumstances.

   Generally, if you operate as a sole proprietor and have no 
   employees, you can use your social security number as your 
   Tax ID. Corporations and firms with employees need an 
   Employer Identification Number (EIN) from the IRS. You may 
   get one online from: 
   http://www.irs.gov/businesses/small/index.html

   Don't mess with the IRS. They are the one creditor you don't 
   want to have. As a self employed business you'll be required 
   to pay social security tax (FICA) in addition to regular 
   income tax. In 2003, your first $87,000 of income is subject 
   to FICA. For 2004, that figure jumps to $87,900.


4. Organize Yourself
   You will need to set up an office.  This means you'll need 
   all the things that you ordinarily would expect from an 
   employer:  
   · a useable workspace;
   · computer, e-mail and other equipment;
   · files for correspondence, expenditures, billing, et cetera;
   · a phone with voicemail;
   · business cards, stationery, and probably a Web site

   You will also have to organize your life and probably impose 
   discipline on yourself, to make sure deadlines are met.  If 
   you work from home set aside time and space for yourself, 
   when and where family members should not intrude.

5. Have Adequate Working Capital
   Starting a consulting business can be thought as running a 
   marathon. Perseverance and staying power are probably the 
   most important resources to being successful. One key 
   element to stay in the game is having access to enough 
   working capital to weather the downturns. One of newest 
   options to getting cash is by borrowing from your retirement 
   funds thru a self-employed 401(k) loan. Before 2002, with 
   few exceptions, you could borrow from your retirement funds 
   only if you were still working for your employer. While 
   tapping your retirement funds may often times not be the 
   best or wisest source of financing, it is one option that 
   you should be aware of and one that has advantages over 
   many other forms of financing commonly used by self-employed 
   individuals. You may find more information on the self 
   employed 401(k) loan on http://www.click2borrow.com


Inexorably, more and more employers are treating their workers 
as in-house consultants for renewable short term assignments.  
Instead of fighting this trend, you can strategically develop 
your consulting skills so that more than one client will want 
to pay for your time.  Then you too can join the rank of those 
who bask in the financial and emotional rewards of being an 
independent consultant.