Coaching and Training
- Also some Useful Tools
Note that we have some Incomplete Pages That Require Work on this site:-)
Note that we have some Incomplete Pages That Require Work on this site:-)
You’ve been coaching for a few years, and have decided that you want to set up a business as an independent Agile Coach. A small business of one person - you. You start looking around to see what it takes to get a small business started and find that you will probably spend more time trying to understand accounting, legal and government regulations than you would do consulting. There is a lot of advice out there, often conflicting. You want to get started - “Just tell me what to do!”
This article is for you. Make no mistake, I am not an accountant. I am not a lawyer. You will want to get help from these experts and should defer to their opinion in the event that what you read on this page differs from their opinion. This page is aimed at heading you in the right direction. The advice I received when I started was “choose a name, get a domain and label it with ‘under construction’, get some business cards… you’re a consultant now.” Since then I’ve set up my business and helped others through the basics and have learned that there is a little more it than this.
One note: I offer this article from a particular context:
If you have a different context, this article may not be useful to you.
In the following section we will look into the basic process to set up an Agile Consulting covering:
Actually, the advice I was offered wasn’t too far wrong. The first step is to decide on a name. There are three basic approaches here:
If you listen to product naming folks, there are pros and cons associated with each of these approaches, and most would recommend 1 or 3. But I will say that in my experience given the kind of company we are it is more important that you like what you choose, and feel comfortable representing this as your entity.
You want to make sure that you can use the name you’ve chosen in multiple ways - a registered name, a website, in Linked In, in Twitter, in Facebook, etc.
The starting point for this is, of course, a Google search.
A word of advice here. If you have ever done product naming, you know that you can spend months on the name, working through candidates, understanding and working toward name meaning, working through focus groups, understanding international translations, and so on.
Do not do this.
While the name is important, in most cases you are a one man band working in a particular location and language. For this exercise get something you like and are comfortable with. You will find that a lot of the obvious names are already taken. Don’t fret it - just move on to another idea.
Once it looks like you have something that passes the Google test, you need to see whether is works in various social media locations. Some of this will be already covered by the Google search but it is worthwhile to take it one step further.
Let’s say that you have decided that “FiveWhyz” is the name you like - we did:-) In most cases you can cover most of these in by direct log into various applications to test out your chosen name. In the United States, you will want to validate (at a minimum):
There are also services that can help:
Usernames (eg Twitter handle @FiveWhyz) through NameChk.com
How long will the naming process take? A bit of brainstorming, a bit of discussion, some serious validation and it really should take more than 24 hours to settle on a name you like.
You will want to set up a website for your new company based on your name. There are a lot of different domain types out there, but for simplicity reasons we all went for the “.com” domain name. For us this meant we needed to have the FiveWhyz.com domain.
To set this up you need an Internet Service Provide (ISP). FiveWhyz folks have used:
No matter which you choose, the process is pretty much the same - you key in the name to see if it is still available, you request that domain, hand over a credit card to secure the name, and then you have it. With that, you have secured the domain name for a period of time, typically 1 to 3 years (depending on how much you have paid). The cost to register a domain (at the time of writing) will be around $20-$50 depending on the ISP and the features you select.
Now if you actually go to that website, you will find… well nothing. That's because you haven’t built the website. Most of the time you will want that website to be hosted. What this means is that you will load files onto the ISP server that will be the content of your website. More on that later. Hosting is an additional cost to the domain registration and if it hasn’t been set up as a result of the domain registration process, is usually controlled through a “manage domain” type panel on the ISP’s website. The cost of hosting is all over the board, so start simple and add more if you need it. If you do this the cost (at the time of writing) is around $120 - $200 per year.
In addition, hosted sites usually offer some form of email server. Typically, you will want to set up your email so that people can connect with you and you usually will want your business email to be separate from your personal email. For us, this meant setting up email mailboxes with names like info@FiveWhyz.com or firstname.lastname@example.org. Most ISPs offer some form of Web based access to this email, but you will usually also want to access this through a standard email client. Again the ISPs will have instructions on how to set up email client access to your new email mailbox.
We have a domain. But let’s face it, in the eyes of the Government we are exactly nothing. We need to register the business with the Government.
Above you will have noticed that each of the names we talked about was suffixed with “LLC”. This stands for “Limited Liability Company”. What is means is that from a legal perspective if something happens and, for example, one of your customer’s sues the company, they can only come after the company and not your personal assets.
There are other legal structures out there, but most coaches settle on an LLC, including the founders of FiveWhyz LLC.
This part is a little tricky as how this works will vary based on where you are setting up the business. Each state has their own quirks and there are often different municipal considerations as well. I will not write about the details here as you can get help at How to Set Up a Limited Liability Company
Again, help is available if you want it. In the past I’ve used services like LegalZoom to help, but have to say that services cost a significant amount of money and the reality is that if you don’t mind filling in some forms usually straightforward to do it directly.
One note. Your organization requires the name and address of a “Registered Agent”. Your agent is the person designated to receive legal papers in any future lawsuit involving your LLC. There are organizations that provide this service for you, but the reality is that it can be you, and this is by far the cheapest way to go.
It usually takes some time for the government to validate and approve the name. You will need formal government approval, etc. to set up a business bank account, register with the IRS and so on, so while you are waiting on this there are other things that you can be doing. You will typically end up with a piece of paper or two showing that you have the name, and also have a State ID number which will be used for example when you want to pay state taxes. Make sure you keep these various papers around as there will be a number of situations where you need these. Cost for registration (at the time of writing) could be anywhere from $150 - $900 depending on where you set up.
Some of this advice depends on how much you are trying to establish a brand. In general, I’ve found that each of the people I’ve helped through the process has wanted to at least have a level of professionalism associated with their presence on the Web, their intellectual property and materials, and so on. The start of this is a logo for your site which will probably also establish the color design etc. for your materials and website.
This can be an expensive process and so often you might settle for a design that you come up with or use an online tool like Tailor Brands to get started. No matter what you end up with there is no problem with this so long as you feel it represents your professional image. You can always change it at a later stage.
If you want to get a more professional result we’ve used DesignCrowd to good effect. DesignCrowd is true to its name. It’s a crowdsourcing service for designs. One service they offer is to set up a design competition. To get a logo, you set up a project with a design brief explaining what you are looking for. You then decide how many designs you want to see (more dollars means more designs) and then sit back and wait. Over the next week or so a whole bunch of designs will pour in from all over the world. You then select the design you like and the designer who work you like gets paid the money you’ve established at the beginning of the project. Once paid the designer will send you the completed designs. Cost for this service at the time of writing was about $500.
After the state has approved your business you will also need to register with the Federal Government and get an Employer Identification Number (EIN). This is also known as a Federal Tax Identification Number, and is used to identify a business entity. Businesses need an EIN. You get the EIN by applying online at IRS EIN Application. Surprisingly, this is a free service offered by the Internal Revenue Service and you can get your EIN immediately. I suppose the IRS wants to make it easy for you to pay taxes.
An S corporation (or S-Corp) is the most common corporate structure for small businesses. S corporations are beneficial to small businesses due primarily to the tax benefits and legal protection afforded to its shareholders. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. FiveWhyz owners LLCs are therefore also set up as an S-Corp.
In order to become (elect status of) an S corporation, the corporation must submit Form 2553 Election by a Small Business Corporation . Again, this is a free service, from the Small Business Corporation.
As you work to develop your business, you will want to be able to point people to your website so they can find out more about you. You might also be interested in working Web search engines so that, when particular search phrases are keyed in by people, your site is a hit (search engine optimization or SEO). The implication here is, of course, that you have a website.
While that is possible, unless you already have experience in this space, you will want to use a website generator. These are tools where you design web pages through a simple drag and drop interface. When ready, you publish the site you have developed to the hosted site.
Most ISP’s have a tool they offer to do this and in most cases this is sufficient to get started. If that doesn’t work for you then the granddaddy of these applications is Wix.com. The tools usually operate in a similar way - you select a basic template, set up page tabs for different categories of information. For example, to start with a typical Agile consultant’s website has:
If you use these tools, you will find that the pricing model is pretty much the same. They are free to set up and in most cases publish your website for a period of time, and then charge if you want to make changes after that time has passed. Cost (at time of writing) is about $120 per year for this service.
While these tools offer user interfaces aimed at making the design of a website simple you will find that there comes a point where they just don’t seem to do what you want them to do. At this point you have a choice. You can work around the problem, or you can consider engaging Web design services. This choice will often be driven by how important the website is to your business. To start with, this should not be an issue, so start simple and experiment over time.
Each of us at FiveWhyz uses an accountant, but this is an optional step. We use them for a couple of reasons:
For us, this is a trade-off. While we could try and do it all ourselves, the reality is that a good accountant will more than pay for themselves.
What you are looking for is not just a pure accountant. You want to find someone who can help you understand the various options of running a business and how to maximize your money. You want someone who will offer suggestions and not just help you count dollars. For example:
There are two basic approaches to finding an accountant:
Once you have selected an accountant, ask them about what accounting software they like to use. Sometimes there is will be a strong preference for a particular tool, so you’d be advised to consider using that tool as well.
Again, this is an optional step, but again the owners of FiveWhyz all have access to a lawyer. The main use of a lawyer is to help you work through contract documents as you engage in the consulting business.
Areas in which we typically need help with as we engage in consulting include:
Unlike the Accountant, we don’t use “big boys” lawyers. Here we tend to focus on finding a local lawyer that can help us read and understand the contracts we are working.
Once the state has approved the business and you have an EIN, you will want to set up a business bank account. The most basic setups a checking account and a debit card. This will allow you to accept payments via electronic payment or check and purchase things your business needs from Website domains, to tools, to business cards, to travel, to … You should also think beyond the basics. So you might want a business credit card, and a business savings account (to park money).
To set up a business account, you will typically need the organization papers, EIN number, various identification numbers and so on. The best approach is to select which bank you’d like to work with, and then visit the bank to set up your account. This process is relatively simple - most banks want your business.
Tracking your business so you can understand the profit, costs, how much tax to pay and so on is a necessary part of any business. There is no doubt that you can start a business with some pretty basic tools to track income and expenses such as Excel. In the end you will probably want something a little more robust than this.
What you are looking for is a system that allows you (at a minimum) to:
There are two basic tools you should look into:
FiveWhyz folks use either of these tools to good effect. If your accountant has a favorite tool, then the best bet is to go with that tool.
Let’s face it, the work we do is not exactly life and death as, after all, the final decision to do something is still with the customer. This does not mean there isn’t any risk to you. No matter how good you are at what you do, sometime expect results don’t quite materialize, or your advice leads to a client losing money, with the result that your business can get slapped with a lawsuit. To mitigate this, you should consider getting business insurance. In fact, you’ll find that many companies will not contract with you unless have, and they have seen a certain level of business insurance.
There are two basic types of insurance that you will need:
There are two basic approaches to setting up business insurance:
The cost for both of these combined will be about $120-$150 per month.
One of the interesting things we’ve found as we set up our businesses is that we also needed a number of others tools and services to get things done. What is nice is that these are often a click a way, and that the bigger issue is finding something that is good, and not expensive.
Here are some tools that you might find useful as you set up your business:
We hope you find this a useful guide and that it gets you started on the path to being an independent Agile consultant.
Feedback is important so if you have any comments, suggestions, corrections etc please drop us a note at Hans@FiveWhyz.com