Are you planning to start a consulting business in San Francisco, California? If yes, that’s a great idea. San Francisco is a fertile birthplace of businesses and a stage for entrepreneurs to take their work to the world. This city is a great place for you to offer your specialized knowledge and expertise as a consultant.
Here we discuss what you need to do in order to start a consultancy in San Francisco.
1.Determine what type of consulting you’d like to do
There are various types of consultancy services that someone can offer. From business set-up consulting to financial consulting to workplace ergonomics consulting to POSH consulting, there’s a lot you can do.
Consider your professional expertise, skills and passion to determine what type of consultancy business you want to create.
2.Create a business plan for your new consultancy
A business plan is a must to:
- Get funding from banks and investors.
- Convince commercial property owners to rent you their property.
- Take important decisions that can help grow your business.
- Get partners onboard your new company.
- Set and achieve your professional milestones.
So, create a business plan for your new consulting business in San Francisco.
3.Select a business structure
If you’re going to be the only consultant in your new company, you can choose a sole proprietorship business structure. If you have plans to grow and expand your business consultancy in the next few years, consider choosing LLC, corporation etc.
Choosing a structure is necessary when you plan to register your consulting business in the state of California.
4.Send in your application for licensing, permits and the Employer Identification Number
The EIN is the Federal Tax ID Number which is a numerical identifier of your business. This number is used when you pay taxes and when you hire employees. In addition to the EIN, you should also get the state-required licenses and permits to run your business. This includes licenses and permits such as:
- Doing-business-as (DBA) certificate.
- Building Inspection and Alteration Permits.
- Business Tax Certificate.
- Fire Department Permit.
- Zoning and Planning Permits.
All of these documents can help you meet the regulatory requirements of the State of California.
5.Choose a name for your business and file it
You can name your business after yourself or your partners; or you can use a fictitious name. The business name you choose must be registered with the Office of the County Clerk in California. Before selecting a fictitious name, be sure to check if a similar name already exists. You can check on the FBN network or with the CA Secretary of State’s Corporate Division or US Patent and Trademark Office.
6.Register your new consultancy
Once you have done all of the above steps, you can register your new consulting business with the Office of the Treasurer & Tax Collector in the County of San Francisco. The registration must be done within 15 days of commencing your consultancy. You should also renew your business registration every year before May 31st.
The registration costs for the business vary depending on your annual gross receipts.
7.Get the required professional credentials to become a consultant in San Francisco
Both the county of San Francisco and the state of California do not have any specific requirements for people who wish to become consultants. But, it helps if you have both a Bachelor’s Degree and a Master’s Degree in your chosen field. Plus, you should have sufficient work experience in your field to allow you to develop and share your expertise with your clients.
8.Purchase business insurance
Business consulting is a profession where you will provide your expert opinion and advice to clients, in order to empower them to achieve the best business results. Whatever suggestions you offer as part of the consultancy will be done in good faith. But, things like economic downturns, political upheavals and natural disasters can sometimes prevent your advisory to bear fruit. Additionally, there is no guarantee whether your client will follow your exact suggestions or not. In such situations, the client may experience an unintended result that may affect the health of their business.
In such circumstances, some clients choose to sue the consultancy they had hired, on grounds of wrongful advisory, errors & omissions in consulting and negligence. Such lawsuits can cost you millions of dollars, not to mention your hard-earned goodwill. To protect yourself against such situations, it’s best to purchase business insurance.
This business insurance consists of three types of insurance, which will indemnify you against any losses you may experience as a result of a consulting service you offer:
- Professional Liability Insurance offers protection to you for any recommendations you have made to clients.
- The General Liability Insurance provides financial coverage when your suggestions may lead to unintended property damage, bodily harm or business damage to the client.
- The Business Owner’s Policy provides coverage to safeguard your business assets in the event you are affected by any unexpected liabilities.
9.Find a place to run your business from
Once you have your insurance, you will need to find a place to offer your consulting services from. You can either rent an office space in San Francisco or offer the services right from home. The choice is yours.
If you do rent a place, ensure that your business consulting operations are aligned to the OSHA and EPA regulations.
10.Develop your contracts and policy statements
Your contracts and policy statements are essentially terms & conditions of your business. They cover everything from the services you offer to the billing method to the frequency of on-site visits to how liabilities are handled and so on. It’s really important that you hire a CPA, a lawyer and a content developer to create strong and bulletproof contracts and policy statements.
Your consulting business in San Francisco is ready now and it’s time to start finding clients. You can look for clients on social media platforms like LinkedIn and Facebook. You can also attend local trade fairs and expos, to find prospective clients.
12.File your taxes
If you are a sole proprietor and self-employed business consultant, you will be paying taxes according to the IRS Form 1099-MISC. If you are working out of home, you can even claim a deduction for it under IRS Publication 587.
Starting a consulting business in San Francisco, California is an exciting and easy task. Just remember to file for your permits & licenses and purchase your business liability insurance for consultants, so that your new business is protected from potential risks.