[Baypiggies] How do you calculate your hourly wage?
glen at glenjarvis.com
Tue Feb 10 02:17:25 CET 2009
Like every posting I've seen on this subject, Monte gives great advice.
This is the type of thing you will get lots of help on at the SBA (and
the retired consultants SCORE). If you live in San Francisco, for
example, a member of the city will come and give you a pamphlet,
explaining how to determine what licenses you need, etc. Also, the big
rule of thumb is "ignorance isn't an excuse" if you accidentally break
some rules/tax laws without knowing about them, you're still liable.
And, liability and legal tax structures (Corporations, LLCs, etc.
etc.) are discussed.
There are many different classes -- almost one for each sentence
below. And, you can attend this BEFORE you decide to contract - so
there's no risk in doing so. There are many other things you can learn
to (like how/why to give out a W9, EIN numbers, Quickbooks courses,
Bookkeeeping 1, 2 and 3, Market Research, etc.)
I don't want to forward the large list of classes here because it
seems extreme for this list. But, I've been forwarding this week's
class list and more contact details to those who have asked.
You may find you don't want to contract; or, that you don't have the
resources to contract now and you need to make a longer plan for it.
P.S. I'm this zealous about BayPIGgies to outsiders too ;)
On Feb 9, 2009, at 3:39 PM, Monte Davidoff wrote:
> Hi Stephen,
> I've been consulting for eight years. I agree with much of the
> advice already given. Here are some additional thoughts.
> First of all, decide if you want to make a go at consulting as a
> career move, or is contracting something temporary until you can
> line up a job as a full-time employee. That will help you to decide
> how much business structure you want to put in place (business
> entity, insurance, etc.).
> If you will be paid on a 1099 basis and not on a W-2 as an employee
> of a contracting company, you'll pay double the Medicare and FICA
> taxes you see on your pay stub. Individual policies for medical
> insurance are expensive, and can go up by 20%/year (when I crossed
> an age boundary, mine when up by almost 50%). Depending on where
> you live, you might need a business license. Get at least a general
> business liability policy (which does not cover you for professional
> liability, a.k.a. errors and omissions, which is very expensive).
> Before you start, get professional advice on taxes, what you can
> deduct as a business expense, record keeping, etc. You might need
> to make quarterly estimated tax payments. Sign a contract before
> you start work: you may need legal advice from an attorney. It is a
> good idea to set aside cash for an emergency fund so you can survive
> for at least six months without any income.
> When you first start out, there is a lot to learn, things to take
> care of, and it takes time that you can't bill for.
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