What Do I Need to Start a Consulting Business?
I'm looking into launching a consulting company for people who want to start businesses themselves or who have failing businesses and need help. I would not do the actual consulting, but will match the client with a consultant that I would contract out. I want to be available in most major cities in the U.S. What legal and tax hoops would I have to jump through to accomplish this?
Like any other business getting started you have a couple of threshold questions to ask.
First, what are your long-range ownership plans? Will you have investors or other owners?
Also, you'll need to determine if you'll be providing these services through an online platform or offline. Are you building to sell the company or to hold it?
Related: Three Tips to Start a Consulting Business
All of these affect where you will form your business and which form of business entity will best serve your needs.
Additionally, “being available” can mean a number of things. If you’re available only online, you may be able to avoid paying income tax in multiple states. But if you set up physical offices in other states, then probably not.
A national expansion can be tricky tax-wise, so be sure to speak to a qualified accountant and business attorney about your plans. Don’t forget to have written agreements with all of your consultants and clients to clarify whom the client pays and when the consultants get compensated.
Related: Sample Consulting Contract
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