Making money

Archive for the ‘Making money’ Category

Looking for a career change

Looking for a career change? Stop scanning the classified ads and start considering whether you’ve looked in all the right places for your career change. Have you considered creating your own career? Have you considered becoming a consultant? When looking for a career change, many skilled employees don’t stop to consider whether consulting could be the lucrative, exciting career they’ve been looking for.

If you’re looking for a career change now is  the perfect time to start thinking out of the box. What do you really want out of your career? What do you value? Perhaps working full-time outside the home works for you and your value system. But for many people, working as a consultant satisfies many unfulfilled opportunities, such as work/life balance.

When looking for a career change, it’s important to understand what you like about your current position and what you would change about your current career. If you’re looking for more excitement, more flexibility and more satisfaction, consulting may be for you.

Looking for a career change? Don’t take that next job until you’ve fully considered what’s important to you.

Think consulting might be what you’re looking for but not sure where to start? Consider checking out the Consultant Journal store, which includes links to products that help you determine which type of consulting business to start (for everybody or for moms in particular), how to set your consulting fees, and an online course that helps you jumpstart your consulting career.

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Do consultants charge tax?

Do consultants charge tax? It’s a legitimate question. Whether or not consultants charge tax depends on many factors.

Your location – Do consultants charge tax?

In order to determine whether you should be charging tax as a consultant, make sure you’re heeding advice that pertains to your own country and state or province. If you’re in the United States, the easiest way to determine whether to charge tax is to contact the Internal Revenue Service, as well as your state. If you’re in Canada, contact Service Canada and your provincial government.

Don’t simply go by what other consultants are charging. Get tax information straight from the source.

Your client’s location – Do consultants charge tax?

Whether you charge tax will also depend on the location of your clients. If you offer services over the web you may have to charge different taxes to different clients depending on their location.

Your services – Do consultants charge tax?

The type of taxes you charge may depend on the type of services you offer. Once again, get guidance straight from the source! Be sure to clearly indicate which services are taxable on your invoice.

Your income – Do consultants charge tax?

The taxes you must charge may depend on your income. Because your income will change over time, be sure to reevaluate your taxation policies on a semi-annual basis.

As you can see, the answer to whether you should charge tax depends on your location, your client’s location, the type of services you provide and your income. When in doubt, contact the government in your area or seek advice from your financial advisor regarding whether to charge taxes.

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Independent consultant rates

Independent consultant rates are something that all consultants are curious about. What should your independent consultant rates be? How much are your peers and competition charging? Are your independent consultant rates to low or too high?

Setting your rates as a consultant is crucial. Charge too little, and you’re short-changing yourself and making it more difficult to succeed as a consultant. Charge too much, and you might find it difficult to get off the ground when you become an independent consultant.

If you’re charging independent consultant rates you want to feel confident in what you’re charging. And how do you gain confidence in your fee structure? Confidence and knowledge are intertwined. You want to understand the rationale behind your rates and understand what you offer your clients.

I’ve written countless articles on this topic, as well as a comprehensive book that will help you learn a system for setting consulting fees: Consulting Fees – A Guide for Independent Consultants.

Remember, as a consultant, there is almost nothing more important than your rate. Independent consultant rates send a message about your value and can mean the difference between success and financial freedom.

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What to do during downtime

What to do during downtime is a common question to ask after you become an independent consultant. As a consultant you may find yourself in a feast or famine work cycle where you are very busy at some times and in a lull during other times.

When in a lull you may wonder what to do during downtime. Of course, downtime can be a great time to catch up on your personal life, take a breather, ramp up your marketing, reorganize your office or catch up on old business. In fact, a friend wanted to become a small business consultant, and she now spends her downtime meeting with small business owners in her community.

But when I think about downtime I think about diversifying my income, and I tend to work on passive income projects.

Passive income is income that doesn’t require any additional work on your part. In other words, "passive" income is not directly tied to your time or energy (hence the concept of "passive" income). Generally, passive income refers to something that can be sold over and over without any additional effort on your part.

Some examples of passive income are:

  • Selling advertising on a website
  • Selling e-books
  • Selling software
  • Selling graphic design templates
  • Selling digital art, such as icons
  • Selling packaged digital goods
  • Earning referral fees

What to do during downtime is up to you. But if you know more projects are around the corner and you don’t need to be hitting the pavement marketing your services, I encourage you to think about building passive income streams.

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When you should subcontract?

Dear Consultant Journal:

I’ve been running my consulting business for a few years now. I have established a network and I get a lot of leads. And sometimes I’m working on project teams where I know that, if I was in the lead, I could be managing some of the vendors. How do you know when you should start subcontracting?

– A.L.

Dear A.L.:

Ultimately, it’s up to you and the amount of measured risk you’re willing to take. But learning to subcontract can be very rewarding. For example, the founder of this site, Andrea Coutu, grew her freelance writing business into a strategic management consulting firm, which means she doesn’t have to be there 24/7 to be making money. The great thing about involving other people is that you don’t have to do EVERYTHING yourself, you don’t have to know everything and you don’t have to be be working on that project to be making money from it. It’s unfortunate that many freelancers and consultants feel compelled to do all the work themselves and then end up working MORE than they ever wanted to. If you start subcontracting, you might find that "risk" gives you more control!

Check out seven signs that tell it’s time to start subcontracting.

Debt snowball method

Debt snowball method — have you heard of it? The debt snowball method is a simple debt management strategy that combines psychological motivation with an effective debt reduction strategy.

Debts can feel overwhelming, especially when you have multiple creditors each seeking their minimum payments. But the debt snowball method may help you feel in control of your finances.

In a nutshell, the debt snowball method works as follows:

  • Make all of your required minimum payments on all of your loans every month;
  • List all of your loans from lowest amount owing to highest amount owing;
  • Funnel all extra and available income to the loan on which you owe the least amount of money (Loan A). Continue doing so until Loan A is paid off.
  • Once Loan A (your smallest loan) has been paid off, choose the next smallest loan (Loan B) and funnel all available income into that debt.  But there’s one more key step…
  • Remember the minimum payment that you used to pay into Loan A, but you don’t have to pay it anymore because Loan A has been eliminated? Well, set aside that minimum payment amount, but commit that payment every single month to Loan B instead.
  • Continue until all debts have been eliminated.

The appeal of the debt snowball method is that, by choosing to pay off your smallest debts first, you see results, which motivate you to stay with your debt elimination strategy.

The debt snowball method isn’t necessarily the wisest debt reduction strategy. In fact, I generally recommend paying off loans with the highest interest rate first. However, many people choose the debt snowball method for loans that have similar interest rates.

You may want to supplement your debt reduction strategy with a second job, consulting, financial restrictions or other measures that will help you make significant inroads in your debt load.

The debt snowball method is an often-recommended strategy because of its simplicity and its efficacy. Consider all the options and then choose the debt management strategy that works best for you.

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Bad credit debt consolidation loan

Bad credit debt consolidation loans are a good idea if the numbers work. However, bad credit debt consolidation loans are not the only option for getting out of debt.

In order to figure out if a bad credit debt consolidation loan is right for you, you need to get a sense of your overall financial picture.

Most people who struggle with debt dislike thinking about money. Of course, it can be easy to feel overwhelmed when being hounded by creditors. But if you can set aside a few hours to consider your financial future you can save yourself hundreds of dollars per month. Stick with me here. You can do this.

Grab a piece of paper, your telephone, a phone book, and a calculator. Write down how much you owe to each creditor, write down the interest rate, and write down your minimum monthly payment, including credit cards. If you don’t know what the interest rate is, call your creditor and find out.

Bad credit debt consolidation loans are usually in order if you are unable to make all of your monthly minimum payments. Bad credit debt consolidation loans are simple: a debtor buys all of your loans, pays them off, and then you owe the debtor and can pay the debtor one monthly payment.

However, bad credit debt consolidation loans are not the only option. The debt-snowball method is another idea that may work better for some.

Nonetheless, whichever debt repayment method you choose, be sure to make your minimum payments and work towards improving your credit rating. Reading about bad credit debt consolidation loans is the first step. Now take the plunge and get your financial house in order.

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How many hours do you work as a consultant?

How many hours do you work as a consultant?

Okay, now, how many of those hours are actually consulting?

Some other kinds of work you may find yourself doing:

  • bookkeeping and invoicing
  • filing and sorting
  • buying supplies, such as stationery
  • chasing after late payments
  • updating your website or marketing materials
  • promoting your business

How much time are you actually spending on just consulting?

And, out of your consulting time, how much of it is stuff you could hand over to a more junior consultant?

Does it make sense for you to be doing all that work yourself? Could you outsource any of it and work on more value-added areas of your business? Can you mark up other people’s work, earning great consulting fees while paying less to others?

In asking these questions, I’m aware that I have a tendency to spend a lot of time working in my business, as opposed to working on my business. Once again, the 2009 tax year found me doing my own taxes. There’s just no good reason for that. I should really hand over all my accounting and bookkeeping to an expert. I know I’d be paying them less than I could make if I applied that time to my business. But coming to this realization has taken a long time. I now outsource work to graphic designers, web developers, writers, marketers and other service providers. It’s been a learning curve — but I’m pleased to say that it has led to business growth and a much happier me!

What work can you move outside your business?

How to earn money as a consultant

Want to know how to earn money as a consultant? It’s easier than you think. There are many ways to earn money as a consultant: social media consulting, IT consulting, home staging consulting, environmental consulting and much more.

Start by doing an inventory of your skills and experience. What are you good at? What do you love to do? Then determine how to work your passions into a lucrative consulting career.

If you’re interested in earning money as a consultant, you may want to make it your full-time career or you may simply want to consult as a side job. Either way, it’s important to focus on how to earn money as a consultant. No matter how much you love your work, work is work.

Many consultants choose to earn money on a per-project basis rather than an hourly rate. From the outset you must be paid fairly–and perhaps even generously.

Setting the appropriate consulting fee rates is integral to being a successful consultant. Being a consultant involves a lot of perks, but it also involves hard work and risk. Your hourly wage should and can reflect this. In fact, the average consulting fee ranges from thirty to hundreds of dollars an hour.

If you’re interested in how to earn money as a consultant, I encourage you to browse here at Consultant Journal. I’ve written over 800 free articles that help people just like you survive and thrive as consultants. You can do it. Start here and start now.

FREE OFFER: Get a copy of my famous article on consulting fees, along with a free six-part mini course – click here. It will give you a taste of what I offer in my book, Consulting Fees.

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What are your biggest financial concerns?

When you’re running or starting a business, finances tend to be a major consideration. Whether it’s paying your own mortgage or making payroll for a team of employees, money affects your life and your business.

Over the years, we’ve covered a wide variety of financial topics: consulting fees, second jobs, finance and more. In fact, our "Finance for Consultants FAQ" is a popular page — and it has a long list of our financial posts.

But what do you want to know more about? Credit cards, loans, lines of credit, write-offs, making money, health insurance, business insurance, leasing a car? Let us know. We’re listening. And we’re ready to research and help you find answers.