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When you form a corporation you are creating a tax entity that is separate from your personal self, and separate from your personal assets. The corporate entity is like another person the IRS will tax in certain ways, and is also something that can be taken to court by someone pressing charges in a court of law.

Creating a corporation is a very smart move for many reasons. Money is one reason you should incorporate. A corporation can make money that it doesn’t pay you… and you can pay yourself only what you need to survive, not more. In this way you can save a lot of money on taxes each year.

Incorporating your new business has a number of positives that you won’t want to pass up.

5 Best Reasons to Incorporate as a Consultant:

1. Saving Cash

As I mentioned… you can save quite a bit of money at the end of the year just by paying yourself only what you need. That money will be taxed, and the money that stays in your business checking account is not taxed – depending what type of corporation you choose. Chances are good that you can save money on taxes at the end of the year too – hire a good accountant that is very familiar with business tax deductions and you’ll be happy you did.

2. Less Responsibility

If you’ve been living in a box for some time and you feel quite safe about consulting without being protected by a corporation, let me assure you that many court cases are conducted where consultants are sued for something they did. If you are not incorporated and didn’t follow strictly, the rules for keeping business and personal finances separate – the court may be able to easily pierce the corporate veil and take your personal possessions if you are sued. Creating a corporation and following very strictly the rules about keeping all finances separate – is the right thing to do. You owe it to yourself to stay safe. You owe it to your family as well, don’t you?

3. Less Audits

One thing that flags the IRS to audit businesses is when they are sole proprietors and haven’t incorporated. The IRS knows that many people intentionally defraud the IRS by claiming to have a business, and deducting many expenses, when in fact – they don’t have a business at all. If you don’t incorporate you may have to deal with more IRS audits than someone who took the simple step to incorporate.

4. More Respect

If you don’t have a corporation, then, in many persons eyes, you don’t have a business at all. It is a bad reflection on your business, and it won’t likely be taken as seriously as would a company with “Inc.” behind their name. Without incorporating the message you’re sending to the public is that either your business is not really valid, it’s a front for something, or you don’t really know enough to understand that you have to protect yourself from liability as much as possible by incorporating. By incorporating, you are adding credibility to your business and showing the world you are taking it seriously. Lending institutions lend more often to incorporated businesses than not. If obtaining funding is important to you, then incorporation is a must.

5. Cheaper Health Insurance

If health insurance is important to you, in all likelihood, you will be able to find cheaper health insurance once you incorporate.

As a consultant you are rather unprotected in the business world. By incorporating you can accomplish many things, one of them being creating some distance between you and your company in the case of litigation. If the corporate veil is pierced you’re in for a lot of grief. Save yourself the grief by taking a couple hours today and reading about incorporation and which type might be best for you. Most consultants find that the LLC – Limited Liability Company is the right one for their consulting business. Many incorporate their name, like, “Joe Dooda, Inc.”

You really shouldn’t need more reasons than those mentioned. Go incorporate your consulting business today!

Think your title is clear when the Contractor leaves? Consider how the 203(k) Consultant looks at the project. Tracking lien waivers is one of the most important roles of the 203(k) Consultant – and yet most Borrowers aren’t aware of what this means, or how important it is.

The 203(k) Consultant And The Monitored Loan.

On a “Full 203(k)” loan the 203(k) Consultant is the person responsible for releasing money to the validated Contractor of record – via the Draw Request forms- across the life of the construction loan. Each time that the Contractor, or Borrower, calls the Consultant to visit the site there are 2 forms that absolutely have to be signed off on: The Draw Request form, and the Lien Waiver. Lien laws are specific to each state, and GA recently tightened up it’s lien requirements (2008), so Lenders rely on a proprietary lien waiver that keeps their bases covered – and lien rights extinguished.

Draw Requests Pay Everyone on site.

There are up to 5 draws for each project, this includes a Change Order inspection, all of which require a lien waiver in order to be processed by the lenders draw center. Over the years, we have learned that requiring the contractor to provide lien waivers for ALL their subcontractors is KEY to insuring a clear title at the end of the project. When the Consultant performs the final inspection, and the Mortgagors Letter of Completion is completed, the Lender checks title prior to releasing the final 10% Holdback to the Contractor -Just in case things aren’t as rosy as they seem. We have resolved a lot of lien problems over the years, and more often then not, liens are placed by someone we have never actually seen on site. Like the electrician, or HVAC company that hits the place like a ton of bricks and then goes off to the next job – all the while thinking the check is on the way. What the Contractor doesn’t often realize is that not paying the Subcontractor in a timely fashion not only keeps him from his 10% retainage, but puts their names on a do-not-use list with the Lender… so it is in their best interest to pay their subs.

A 203(k) Consultant On Every Renovation

We believe firmly, and are outspoken about the 203(k) Consultant being MANDATORY on ALL FHA 203(k) Streamline loans, not just the Full 203(k). Generally speaking, a Streamline loan is $35,000 and below – and the banks look at it this way… ‘Just how much trouble can someone get into with only 35k?’-experience has taught us that the answer is A LOT. When you look at the renovation industry thus far – it has been laced with fraud, arrogant investors and homeowners acting as their own General Contractor, or worse, architect. Having a 203(k) Consultant on every FHA loan is an important step in rebuilding this countries housing stock – and bringing back a strong housing market one house at a time.

Here are some things to look for if you genuinely want value from a consultant, all of which you can test in a meeting or single reference.

First is personal credibility. I don’t necessarily mean brand here, which in a way is lent credibility. I mean the credibility of the person or people actually doing the work. To appreciate the importance of this distinction, you just need to look forward in time and ask: “What credibility will that person have in front of the Board or the bank or the MD or my colleagues when they start asking difficult questions?” Of course there are times when a brand does add credence, but I’d argue that what really counts is the quality of the individual making those recommendations, and consequently the recommendations themselves.

Second is subject matter expertise. By this I mean genuine expertise in the particular issue you are facing, be that business case development, due diligence, market entry, benchmarking, whatever. I specifically don’t mean industry expertise, which in my experience contributes either marginally or even negatively in a consultant’s value to a company.

At the risk of unpopularity, using industry expertise as a way of choosing a consultant is, in my view, misconceived. It is an easy way of screening for a buyer, and an easy way of selling for a consultant. Consultancies understand this dynamic and have industry experts at senior level only, in order to help the sales situation. They talk the language, have the examples, etc. But the people that do the work and generate the insights come from a pool of generalists and subject matter experts.

We hear all the time that clients are amazed how quickly we get to understand their industries. But they’re giving us way too much credit and over-estimating the difficulty of understanding a sector sufficiently well to apply our subject matter expertise. In contrast, subject matter expertise is the thing that takes years to develop. To illustrate, we have performed dozens of due diligences of technology companies, and we use exactly the same skills to due diligence leisure companies. Each one, in whatever sector, takes only three weeks, and we have never had any problems in sectors we have never worked in before. But we would have no idea where to start re-engineering a business process, a subject in which we have no expertise, one of the exact same tech companies we just diligenced. And we couldn’t even dream of knowing how to sell a client’s products.

A third thing to look for in a consultant is his willingness and ability to challenge you, your views and your assumptions. It is easy for an adviser to back down, particularly someone who’s junior, impressionable, easily intimidated or otherwise anxious to please. I’m embarrassed for my profession that 90% of consultants I’ve met fit into one of those categories, people responsible for the tedious cliché of the consultant taking your watch to tell you the time.

The Greeks had a concept of a noble friend, who would tell you the truth, even if it wasn’t what you wanted to hear. A good consultant is a noble friend for hire.

A fourth thing to look for is absolute attention to your particular concern. The consultant will be so focused on your particular issue that you won’t be able to see any approach or methodology he employs. Every conversation will all be about your situation and helping you improve your own condition.

There are some good precedents for these characteristics in an adviser. William Wilberforce, in my opinion one of the greatest men who ever lived, had for an adviser the great John Newton (pictured above), composer of Amazing Grace. Alexander the Great had Aristotle. Washington had Lafayette. I guess they didn’t do too badly.

Businesses working the marketing convention circuit do so in earnest pursuit of the many rewards this promotional forum provides. Few other advertorial platforms allow organizations in virtually every industry vertical to reap as many face to face opportunities. From increasing brand exposure and recognition, generating dialog with potential clients and rubbing elbows with the competitive masses, marketing conventions abound with prospective trade show ROI for every exhibitor.

Trade Show Consultant Teams Offer Promising Option For Struggling Exhibitors

While industry events offer promising results, a positive trade show ROI does not automatically happen. Companies need to plan, strategize and consistently execute at every event to ensure a steady uptick in trade show metrics and achievements and sometimes even that doesn’t prove enough. Despite their best internal efforts, some companies still find themselves at each convention function struggling to gain traction and fully leverage each opportunity that presents itself.

Fortunately, businesses that are consistently faced with a paltry return when they examine event metrics do have a better option than simply giving up on the exhibitor circuit. Professional trade show consultant firms have proven to be a reliable source for companies fighting to gain purchase at conventions. If your business is working, unsuccessfully, to make headway at industry events, it may be time to consider aligning your organization with a professional consulting team to better maximize results.

The Benefits Of Partnering With A Professional Consulting Firm

Initially deciding to utilize an outside consulting business can prove challenging for any organization. With most companies (rightfully) operating with a heavy focus on bottom line revenues, the idea of spending money on external resources for convention events may seem counterintuitive. However, understanding some of the many benefits that a professional consulting firm can deliver can help make the decision making process a simple one.

First and foremost, a reputable consulting team offers a fresh perspective on your current preparation regime and ultimate exhibit execution. Often, companies find themselves falling back on unproductive methods by rote. A professional team will review current tactics to gauge both inefficiencies as well as assets. From there, they can design a customized solution to help ensure that your business sees a significant enhancement in event metrics.

What is one of the best resources that a professional consulting team offers? Training services. A reputable team will offer training options specifically tailored to your staff’s needs and strengths. Many industry leaders even provide several of training forums. From onsite, live online and straight online models, a top notch vendor will offer a variety of training options to ensure that your team receives the skills they need to best execute at every exhibit.

Best of all, a leading consulting organization will conduct post event analysis after every function to best gauge yielded trade show metrics. From exit interviews of booth guests to creating a self-administered survey and everything in between, a consulting team will systematically go through every detail of your event performance to help your team consistently increase trade show ROI, all while allowing your staff to remain focused on your company’s core business.

Article 2 – The new duties of systems suppliers.

Research on tens of thousands of new IT systems has shown that less than 30% are ever delivered on time, on budget and according to what was promised. A massive 73% cost more than twice their original budget AND take more than twice as long to implement as planned. This is the second in a series of six articles by David Craig showing how you can ensure that your new IT system works on time and on budget.

In this article, I’m going to start talking about the legal obligations on IT systems suppliers to deliver what they have promised. Please, please do not switch off – this is hugely important. This is not for lawyers. This is essential information for any organisation (in the public and private sectors) which is buying or has bought IT systems.

Over the last ten years there have been over a hundred court cases which have defined the duties and responsibilities of suppliers of IT systems. These have meant a massive change in the law which provide a large degree of protection for organisations buying IT systems. However, few organisations know about these changes and even those that do know about them do not understand how to benefit from them. In this article we will just focus on the duties of IT suppliers who represent themselves as ‘specialists’ or ‘experts’.

Most IT suppliers claim to be ‘experts’ or ‘specialists’ in some area – finance systems, ERP systems, CRM, warehouse/stock management or whatever. One large consultancy, for example, claimed on its website that all its 10,000 or so consultants were ‘specialists’. While most of us would probably view such claims as just marketing puffery, in the eyes of the Law calling yourself an ‘expert’ or ‘specialist’ or ‘professional’ immediately places significant duties of ‘reasonable care’ on you in terms of the advice and services you provide to your clients.

Typically, if you ask an IT supplier or consultant to respond to a Request for Proposal (RFP) or an Invitation to Tender (ITT) to provide a new system, most suppliers just tick the boxes on the tender document and, providing the price is reasonable, you will choose the supplier who ‘ticks the most boxes’ – the one whose system appears to be closest system to what you think you need.

However, the Law says that potential suppliers must do much more than confirm which of your requirements their system will meet. According to the law, if a supplier represents themselves as having specialist knowledge or expertise, they must tell you three key things:

1. What they are going to provide to meet your needs
2. What they not going to provide
3. Any ‘consequential effects’ of what they not going to provide

This all means that if there are areas of your RFP or (ITT) which a supplier will not provide, the supplier must both highlight those areas for you and explain to you whether the areas their system will not cover have any ‘consequential effects’ on the overall functioning of their system in your organisation. Most suppliers never do this and buyers are not even aware that the supplier should be identifying any gaps between what they want and what the suppliers are proposing and whether these gaps will have any significant effect for the system.

But there’s much more than that! The Law puts further duties on suppliers who represent themselves as ‘specialists’ or ‘experts’. If your organisation has omitted some key feature of a proposed system from your tender document, the supplier has a ‘duty of reasonable care’ to inform you that the feature is missing and what effect this will have on your system’s success. For example, if you are putting out a tender for a finance system and your tender document does not mention the need for a ‘trial balance’ facility, your supplier, as a specialist in finance systems, has a duty of reasonable care to inform you that the trial balance feature is missing from your tender document and the effect that this omission will have on your future finance system’s viability.

According to the Law, if you buy a system and there are problems (delays, cost over-runs etc) due to the fact that the supplier has not warned you in advance of an issue that they as a specialist could reasonably have been expected to have anticipated, then the supplier MUST correct these problems at the supplier’s own expense. Surprisingly few organisations buying IT know about the duties of suppliers who represent themselves as specialists and thus fail to benefit from the protection these duties offer systems buyers.

Your IT systems supplier will always try to pass the responsibility for any problems onto you – but the Law says that if the supplier as an ‘expert’ could have reasonably anticipated the problems, then the suppplier must fix them at their own cost.

In my next article we will explain the other key area of supplier responsibility – when you pay a supplier as a consultant to scope your operations to assess their system’s suitability.