Starting a Successful Contract Service Business (LLC)
Wanna get started contracting but you don't know where to start? Whether it's VI services, O&M or any other support style, educational or vocational services, I have got you covered. There are three areas we're going to go over today. And once you get your ducks in a row, you will be ready to roll. Let's get into it.
In this podcast episode:
Introduction
Financial Aspect
Legal Aspect
Technical Aspect
Getting the Contract
Recap
Outro
Transcript of the Episode:
Introduction
You know, when you start a project, and halfway through you think, man, I really wish I had known A, B and C before I got started. Or maybe you're the type of person that doesn't get started until you know all the things. But there are so many to know. I've been there. That was me with contracting. I wasn't exactly sure where to get started. I wasn't sure who did dog do, I wasn't sure what to do. But now, now it's been a minute, it's been a few years. And I've pretty much got my systems down. So I'll take you on a test drive of what you need in order to get started and succeed.
And for today's podcast episode, the word succeed, I'm doing air quotes, will be defined as did not make as many mistakes as Kassy did. Because ultimately, friend your success is inevitable. People like you and me. We might have setbacks, but ultimately, we're going to be fine. So if you're questioning whether you should take that leap? Well, only you know for sure when it's the right time. But everything will always work out for us.
Okay, there are three areas financial, legal and technical, that we're going to go over today, we'll add in a bonus area of where do I even find contracts, that's going to be different for every person, depending upon where you work, where you live, and who you want to work with. So we'll go into that a little bit at the end. But I'm going to keep it super broad, because you're gonna have to do some research on your own.
Okay, first things first, you've made the decision, you're gonna do it. Or maybe somebody has even asked you, Hey, can you? That's even better. You have to protect yourself. And here's how you're going to do it.
Financial Aspect
First area’s financial, that we're going to go into today. Because money, honey, or we're all taught that money is evil. But it's not. It also doesn't solve all your problems. But having enough money will definitely help make things that would have felt like big issues much smaller. Like when your kid gets sick, or your fridge breaks, or you know you want to retire or things of that nature. Having enough money will allow you to navigate those situations with more grace and ease. Because if you’ve given up your W2, you're gonna need to plan for when things happen. And let's face it, you're now a business owner. So welcome! And start putting on that hat, that CEO hat and rocking it with pride.
First things first, within the financial realm, you need to set up a separate checking and savings account from your own checking and savings account that you have right now, from the exact moment that you begin to work on this stuff. All of your money needs to be separate, please trust me on this. I would suggest a business account and a checking account that you can at least access like in real time. I don't suggest like a high yield savings account as the checking account part. But you can do a high yield savings account for taxes. That might be cool. Just make sure that you actually have access to that money, because that will be the main place where you deposit your checks. And then that will be the main place that you pay your expenses from.
Now, why do you want to do this right away because I'm not even making any money? What are you even talking about? Because before you go into any sort of business for yourself, it costs money to start up, it may only cost a few hundred dollars but it costs money. And how are you going to know? And how are you going to prove to the IRS, if you get audited, that you gave yourself the investment money back? You need an easy way to track that from the get go. Your savings account will be used for taxes and other expenses, like a pension plan, or retirement… Hold up, hold up, hold up, hold up, I'm not telling you to put all of your retirement in a savings account, we can all do math, that is not where that money will end up. But it cannot stay in the account where your expenses that you pay for other things for your business will come out of or else you may not get to retire when you think you're going to. So let's be proactive about all this, okay?
Now you're going to open that account. And you're going to add the minimum so that you don't have to pay the monthly fees, whatever that amount is, plus $500. Now, if you don't have that much, add in at least $500, because you will probably end up spending that 500. And then you'll end up having to pay monthly fees, just to use your bank account, which is not smart. Not the way we want to do things unnecessarily. But we will do them if we have to.
Okay, so the next thing that you're going to do is you're going to start a spreadsheet, and you're going to start tracking all of your expenses. And then you're also going to take out 35%, or talk to your tax accountant, which is coming up next, and put that in savings. You're gonna want the spreadsheet to tell you all of your expenses, plus the tax category, plus when each invoice probably will send out and paid.
Here's what you can do, if you don't want to just use a spreadsheet, you can use something like QuickBooks, which I for the first few years loved. I really enjoyed QuickBooks for a good while. It allows you to invoice, the reports are great, it also allows you to do mileage, and they have a self employed one. The last time I checked, it was about $10-11 a month, maybe. It's probably gone up by then or since then. But well worth it. If you'd like to have all of your finances in one place. If you're just starting out, and you have a little extra time or you don't want to spend the $10 a month, $15 a month, whatever it is on a software, then just use your expenses.
I actually have… I use a software, I actually use you need a budget. And I do it on an Excel spreadsheet. I actually use a Google spreadsheet, I don't know is that Excel. Because what I want to do is I want to track all of my expenses for the year, my business may look a little bit more complicated than your business though and that's totally fine. However you want to do it and set it up that works for you. Google has a bunch of templates that you can use as well. And if you went to our November webinar in 2021, Kristen Sharpless gave all of those people access to her spreadsheet. If you didn't go and you don't have access to that, unfortunately, I can't give it out right now. But if you did, then that was your gift to you at that time.
So before you get your contract, here's the thing that's going to differentiate you from everybody else going into this and just saying, Okay, now I'm ready. How do I get paid? First, you're going to do it as CEO, what actually do and you're going to determine how much money you need. It's crazy to kind of think about that. If you had done this before setting up your spreadsheet and before looking at taking out that 35%, your number could be over 1/3 off. That's why we're doing it in this order. You need to look at how many hours you will need to work to make the money you need or how much you need to charge and work it backwards.
In this case, I don't want you just take a step forward, take a step forward, take a step forward, I want you to sit down. If your Myers Briggs ends in P instead of J, I want you to just… you're gonna have to stretch and that is fine. Think far into the future. Now, if you know how to set up a FIRE goal, and that is a retirement goal, go ahead and set that. Figure that out, how much money do I need to have at retirement, and then you can start to work backwards from there.
You might need a financial planner or tax accountants help with that situation. And that's also okay, you're a business owner. You can make those moves, you can take those steps. But at the very least, you need to figure out how many contracts do I need in order to pay my bills? How many hours do I want to work if you're moving into contracting, because you just had kids, and you want only part time, that's a perfect and beautiful way to stay in the field, and give back to our profession and to our people, while still having time for your own kids and your own family. But if you only take the ones that come to you, or if you don't think about it ahead of time, you might end up in a place that you didn't expect either working too much or not working enough.
Okay, so within that financial realm, I also want you to get a tax accountant, if at all possible. When you're first starting out, if your taxes remain the same year after year, like all the situation's remain the same. You didn't buy a house, buy a boat, get divorced, all of that stuff. I'm talking to my US base people here because I know nothing about international taxes. I barely know enough about US taxes, you can use something like TurboTax or other software that has a self employed option that will walk you through what you need to know for the first few years. Once things start to get complicated, though, I highly advise seeking out somebody. If only for that person to be able to help you when something goes wrong. Like if you in 2020, hired a nanny and then filled out some boxes incorrectly. I raised my hand, and then having somebody there to help me figure it out amongst all the other things you have to figure out right now really helps. And this is when you get to put on this new hat of really thinking about money as energy. And not just as money.
Money is an energy exchange. And it's not kept for you anymore. You can work as many hours as you want. And in many places, you can hire people under you to be the O&M specialists for you, and you be the director. It's real cool. So when you're thinking about it like that, then you can start to think about it as how much of my time am I getting back? And what do I get to do with that time. It's a really, really fun game, when you start thinking about money as energy that you get back for the contribution into the world. And not some just random tapped in number. Because you've been getting the exact same number on your paycheck year after year, without any increase. It also starts to help you value your time more. And that's a whole other thing with this financial section, is you're going to want to learn how to value your time. So is it costing you more money to do your own laundry or fold your own laundry than it would to write that report or go see another client?
Legal Aspect
Okay, let's move into number two only go. This is where I'm going to put a huge disclaimer, like a person standing in front of some store and they haven't those like signs that they're flipping around over and over and over again, here is your disclaimer from me. I am not your legal representative or advisor. I'm sharing from the point of what I have done, I will not give out any contracts that I've used in the past. And I will not step over my own boundaries as to sharing my own perspective. Because this stuff gets tricky, and neither of us are going down for it. Right. Okay, we're gonna still be friends. So that's my boundary with this.
Okay, you have your bank account set up, you have your $500 on top of the minimum amount of your bank account. Now what you're going to do is you're going to go, you're going to open that computer. Also, let's wait till you get a debit card, and then go open your computer. You're going to set up an LLC and an EIN. I suggest setting up an LLC first. Because I've done it the other way around, and it was trickier. I don't think legally that it matters which way you do it.
An LLC is a Limited Liability Company. Now what that will do is put up a safety net around your assets. So that way when somebody sues you, and I said when on purpose because you're a business owner now, and so we're now living in pipe dreams, we are living in possible realities; your assets, like your house will be protected. Each state in the United States has their own office where you fill out your information to get your LLC. In Texas, the last time I checked to start an LLC cost $300. Now what you want to do is also at that time, when you are deciding on your LLC, you're going to need to pick a name.
I personally, this is not legal advice. But I personally this will go into the bonus area would pick a name that you can buy the domain for. Domains cost between 10 and 20 bucks, it doesn't matter what you do with it, just buy the domain. We'll explain more in a second. Now, here's what the LLC does not do. As far as your taxes go, it does not actually separate your income. So your business taxes and your personal taxes will be filed the same as one entity. And when you think about the fact that the US government chooses a word Limited Liability Company, please know that if you are the only one in that limited liability company, you are a disregarded. That's right. disregarded LLC. You are still technically a sole proprietor.
The reason that you have the LLC is to protect your assets. And I would suggest this step for anybody making over let's say, $20,000 a year. If this is going to be part time to full time income, definitely get an LLC. Also, you're going to want to go and get an EIN number. EIN is theEmployer Identification Number. This is the number that you will put on your W9 when you are working with school districts or whoever you are contracting with, so that you don't have your social security number floating out and about in uncontrolled areas. Speaking as somebody who has had their identity stolen from the state of Texas, yes, I'm calling them out.
Okay, then, once all that comes through, you're going to just go get a W9. These are all forms that you can get from the government websites. You'll fill out your W9. So you have already. Simple. And note about the websites, know that there are so many businesses who will help you fill this out, if you pay them. It’s not hard to fill out these documents do not be scared of them. They are easy. You are a grown person, you can do this.
Under legal we have the second part of that, which is the contracts. You need a contract with anybody and everybody you work with ever period. So I've seen people ask Oh I'm gonna hire somebody to do admin tasks for me., do I need a contract? Yes. Do I need a contract to work with such and such? Yes, you always need a contract. I suggest having a lawyer on standby.
Now, when you're just getting started, the aspect of a lawyer might seem scary, like that cost a lot of money. I'm not up to that level or nothing bad's gonna happen. I don't need that. And I'm not saying that you need to have a lawyer in your office, in your guest bedroom with you at all times like this isn't billions. But have a relationship with a lawyer, just somebody that you can pay to be able to ask them questions. And if anything happens, you can say my legal team. Having the power to walk into a meeting and say my legal team XYZ, only say things that are legal or what they've allowed, will give you much more power than if you were to have that meeting and then have to go find a lawyer.
Also, if you find or you create a contract, just have a relationship with a lawyer, like just somebody that can look over your documents. Yes, you will have to pay them, they can help you make sure that the document is legal. And they can provide defence if anything happens. Because the last thing that you want to have happen is that you make a contract, or you steal one from online, and then you present it to a school and you both sign it and for some reason, some wording is off and it doesn't hold up in court for something that you didn't know about because you didn't get a law degree. And you're not supposed to know about it. So what I like to do is actually ask the school to develop a contract, or I will turn in a draft and I will say, will you please have your legal team review this now. What you're doing there is at least you know that what you are signing is able to be held up in court. And most school districts are going to have their legal team look at it anyway. But if you at least have it in writing that you requested it, and that the special ed director, whoever it was said, yes, our legal team has reviewed this and has approved it. Great. And they may make changes too. And as long as you agree to those changes, that's fine.
Number three is insurance. Of course, on a podcast I legally have, I legally should tell you to get insurance. And yeah, it's a really, really great idea. But also thinking outside of the box, it doesn't hurt to ask your employer or your contractor if they will cover you. Just get it in writing, you can put it in, or maybe be able to even embed it into your contract itself. Now, I'm not going to share any insurance companies that I like working with or anything of that nature, because honestly the ones that I've worked with in our field I don't like… I don't like how they run their business. I don't agree with it. And I just don't enjoy the experience as a customer. But you can always just search or go to our major organisation, and they have one that they sponsor, and you can make your decisions with that.
Technical Aspect
Okay, so the third thing that you're going to do is get technical. Like you need some things working on the back end and in the background, in order for you to actually be successful. Like you need an email address and you need some other things going for yeah. Remember when I said to grab a domain name, okay, here's the next thing that you want to do with that domain name. So with that domain, you can decide how you want to play your email address. I highly suggest G-Suite with either info or your name at whatever the domain name is. You can link them together or you can keep them separate. And I'm suggesting G-Suite specifically because it is HIPAA and FERPA compliant when you pay for it. Now, if you choose to do something like my domain name@gmail.com That may not be HIPAA and FERPA compliant. And for our standards, we need those things. You know what I mean? You do. You know what I mean. Okay, so you're gonna get a G-Suite account. G-Suite also has many add ons that allow for encryption, that allow for automation, they have an entire marketplace of this, like magical stuff that will do almost anything you want it to do. It is beautiful, and most of the things are free. Lovely.
The other thing that I would highly suggest is to set up as many things on automation as possible. So do you need a reminder every month to do your invoices? What if there's a way you could do your invoices automatically? What else can you automate? The less that you are actually physically doing as far as admin, the more money you make. For automation, I really like to use Zapier. It's the same as If This Then That. We've explained this a little bit some other places but in case you don't know and forgive me if I'm sharing something that you already do know. What that allows you to do is link to different software's or apps. And let's say it's your calendar. And it's like the 15th of every month. That's if this one of our events, and then that and it could be that you get a reminder to send your invoices, it could be that it takes the spreadsheet information and emails it to you. So that way you can email it out. There are so many different things that you can do with this, I haven't even played with them all. That's another tool that I use repeatedly, almost every day. We use Zapier for so many things behind the scenes.
Another account that I would create one that links to your G-Suite calendar is Calendly. C A L E N D L Y, Calendly. I've been sharing this for years. And we're finally getting some feedback that people like it. Good. I'm glad that you guys are using this. What Calendly does is it integrates with your calendar and it will allow people to book times on your calendar when they need to contact you, or when they need to meet with you. You can have one calendar for free for their free account. And if you need to have multiple different types of meetings, multiple different calendars set up, you can pay for it. Even the free version of Calendly does more than any other calendar scheduling software that I have seen.
Now, the way that I like to do this is I've little teacher website, it's really just Google Slides. If you're in Clarity, you have access to it. It's the meet the teacher virtual night. It's really just linked to Google Slides. And I like to have my name my information. And then I give parents away to literally book a meeting with me whenever they need to. Now on the back end of Calendly, I can go in and I can say… Okay, okay, it's not really whenever they need to/ I don't book meetings, outside of Allied on Mondays. Mondays are crazy. For me, I don't want to book meetings outside of Allied on Fridays, typically, because I need to prepare for the following week. So Tuesday, Wednesday, Thursday, and I have my kids after 3pm. So that typically is blocked off. And then I don't drop them off at school until a certain time. So and then I need like a little bit of time to like, work out, take a shower, get ready for the day. So I have specific calendar setup. And all teachers and parents are rarely use it for me. For you, it will save you so much O&M phone time. Here, book a time on my calendar, send you the link, whatever time works for you works for me, bam. The thing that you have to do with it, though, is make sure that your calendar is up to date, like you can't just let your work calendar, your new G-Suite calendar, can't keep all that stuff in your head anymore, you have to write it down on there, which obviously isn't a bad thing. But that's another one that I would set up almost automatically, almost immediately. That's something that's not necessary at the very beginning.
And then if you're going to be teaching remotely, you probably already have a Zoom account. Just go ahead and keep it. If you're going to be teaching more than an hour, I would highly suggest paying for the Zoom account. So you can be on there more than 40 minutes. But if you're not, it should be fine. It's up to you. I think those are the only big technical things that I would make sure that I have besides a website, which we will get into in just a second. As to why I would suggest a website for you. And not just the meet the teacher virtual slide deck that I just shared about.
Getting the Contract
Okay, let's talk about how to get the contract. Everybody's going to be different. And this is where you're going to lean into the connections that you have. Let people know that you are starting to contract you're starting to work with other people. It really depends on how your setup is in your exact area. In our area. If I want to work with children, or school age, teenagers or anybody in the schools, I go through what we in Texas have regions. Now regions support the independent school districts around because our school districts are like tiny, it's like the size of the city. Where as where I grew up in Florida, the school district is the entire county. So here in Texas, if I go 45 minutes north, I will hit three different school districts, where in Florida, in order to hit four different school districts, I have to drive for four hours. So it's a little different. I would go all the way to the regional service centre, if I were working with kids. I want to work with adults, I would look at the vocational rehabilitation services, the Workforce Commission, things of that nature, and I would get in with those people. Because in contracting, it really is who you know.
Now, here's something that's really interesting to me. Remember, way back when it was many moons ago, when I had started getting contacted by people from the Workforce Commission that had gotten my number, and they said, they wanted to work with me. More than one of them said that they wanted to work with me, because the other people on the list that they were given, did not have an online presence. Now you and I both know, wholeheartedly, that whether somebody has an online presence or not, matters zilch as to how effective of a teacher they are. I have an online presence, because I want to talk to you, I really don't know that I would even think about having an online presence, just to reach people with visual impairments.
But they look at you as a business, and they want to research you and they want to get to know you, just like you would when you're getting a new therapist, or a new doctor, or a new whatever, you want to know who the person is that you're gonna be working with, especially when there are choices of other people. So here's a suggestion, I suggest grabbing that domain. If you are tech savvy, you can attach it to a WordPress site for free. Actually, I would take a step back a little bit and say that it's not that difficult to do. But it might take some time to just figure it out. On that website, you definitely want to have your name, I would have a picture of you smiling, so that people with vision can see you. If I don't see somebody, like if I don't see a picture of a doctor or a therapist, or a PT or somebody I'm going to pay services for or to, I don't hire that person, because I cannot connect with them. We connect with people by seeing their face.
Okay. You also want to have like a little about thing, a little paragraph, what you're about maybe where you went to school, doesn't have to be super, super tidy. It doesn't have to be your whole resume, whatever you want to put here. And then you want to put your contact information. This website doesn't need to be everything. But I do highly suggest having a website.
Now I will say that me personally, I have a hard time with WordPress. I really do. I struggled with it for years and I finally gave up. I would much rather pay the money for a Squarespace site, then lose my time and energy and momentum on a WordPress site and then getting it on like a server and just all of that I would just I prefer to skip it. You can choose whichever method you want. I would not recommend a Wix site, because it will be hard for people to find you. I think Show It is the same. It's nicer than Wix. But it's hard for people to find you.
The thing with this and the thing with Google is you are now entering into the marketing space. And you need to have your name and the word orientation and mobility specialist and the location where you intend on working on that website as much as possible so that the search engines can find you. If you want to dive deeper into this, you can look into Search Engine Optimization. It's not my forte. I can't give you specific advice on it. I've been working on this for years and it's I'm not the best at it. but it is something for you to take into consideration. You want people to be able to find you. If you have an Instagram or a LinkedIn, or a business Facebook page, link them there as well. The more people can get to know you, the more that they can then begin to like you and trust you.
I think we all have those brands, where we don't need to, like research them. Or like, let's think about your favourite pair of jeans. You know, that jean company, you like them, and you trust them. So if they say, Hey, we’re having a sale on jeans, you might just put it in your cart, and order it. You don't have to do too much thinking about it. And that's kind of what you want other people to feel like, you want them to just say, you know, this is my person. I want this. I like them, I trust them. And you can really only do that with a website.
Now, people will ask, do you need business cards? I think that depends on who you are. When I'm at an event depends on the event. Typically, I just have people scan the QR code of my Instagram, because I don't want to give away my potential relationship to that person. But you could easily have business cards printed with a QR code to your website. So that way, if they wanted to contact you, they could do it that way. And the QR code could go to your website, it could text you, it could go wherever you want it to go.
Recap
That was a lot. We've been here for a hot minute, but hopefully you can use this as a resource. For however you would like to use it. Come back to it take some notes. Remember, there are four things that you need to have in order to be a “successful” contract specialist successful meaning just try not to make the mistakes I did. One, get your financial ducks in order. Two, get your legal ducks in order. Three, get your technical ducks in order and Four, your marketing ducks in order. We love the ducks right now. I hope that you have a great rest of your day and I am my friend. We'll talk to you next week.
Outro
It is such a blessing to chat with you week after week, my friend I hope you're using this information to take yet another step forward in your journey. If you're finding this podcast helpful at all, it would be wonderful. If you would leave a review on Apple podcasts that helps us get seen by more people who we can help. And as always, I would love to hear from you on Instagram at Allied independence. Take a screenshot. Let me know you're listening. We'll chat over the DMs and have a grand old time.
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