You will need a designer to help with the following elements at some point in your early business development:

Of these, absolutely essential at the outset are the logo, business card, and related stationery. Your image to the world will reflect on your professionalism and what you think about yourself. In the first week I had been thrust into my own business, with no logistical preparation, I received a significant lead from a major bank in New York City. My choice was to wait to respond until I had business stationery in about two weeks, or respond immediately on plain white paper. I chose the latter, and was never able to make any progress. I'm convinced that in this case speed was not an asset but image would have been. Don't kid yourself; people do judge the book by the cover.

Don't use computer-generated stationery, nor material you buy off the shelf. As a stopgap, there are catalogs that offer an attractive and inexpensive array of stationery with various logo options and your particulars printed into their templates. The disadvantage is that many people use them, they've become fairly evident, and a buyer might actually find that your stationery is of the same design as another consultant's. It's like generic music: It's music, but not memorable.

The ideal approach is to invest in a designer who will create a look that will pervade all of your print materials as they appear. (There is no law that these have to be eternal. I've changed my logo and look as my business has matured, and so can you.)

Find brochures and letterhead you like, from any source, and inquire about the designer. Ask for references in your early networking activity. I called the president of a public relations firm whose materials I liked, and asked for recommendations for designers. She provided two, one of whom I hired.

A good designer should always provide options. I received about two dozen that my wife and I could combine to our hearts' content. Always remember this, however: The designer provides the aesthetic images, but you provide the copy. Never allow the designer to do the writing. If you need help in committing your intent and concepts to paper, then hire a copywriter, but don't use your designer as a writer^[19].

Here are two examples from my own firm. Figure 3.1 is called a type solution because the logo uses the firm's name with some artwork around the type. Figure 3.2 is a logo incorporating my firm's name, which I had changed after some years in the business and feedback from clients indicated that the first version didn't adequately represent my quality.

Finally, try to deal with a local designer if you can find one who offers the quality you're seeking in the general area. It's important to meet face to face, to look at visual ideas together, and to be able to quickly exchange and critique material that would otherwise have to be sent by courier. Don't settle for just anyone, and don't use the least expensive person available. You're designing your future.

Figure 3.1. "Type-solution" logo.

Figure 3.2. Graphic logo projecting quality image.

You'll need the following types of insurance in your business:

Disability You are much more likely to be disabled than to die while running your business. Since your independent income is key to your future and your family's future, you must protect it with disability insurance. Normally, disability payments are tax-free if you pay the premiums, but taxed if your company has paid them, so pay them out of after-tax income. Disability insurance will usually pay a maximum of 80 percent of normal income, but since it's tax-free, that's a good deal. Multiple carriers engage in coordination of benefits, meaning that if you have more than one policy, their sum total will match the 80 percent, though there is a movement now that any one policy will pay up to 80 percent despite other coverage.

Keep careful records, since consultants' income tends to vary widely from year to year, especially at the outset. That's one good reason to use a payroll service.

Disability insurance is cheapest when purchased through groups, and many trade associations offer it. Individual policies are more expensive, but generally have better benefits. (If you've left a prior employer with disability insurance, you are often offered the option of converting that policy to your individual use. That's almost always a wise move.)

The two keys about disability insurance provisions are these:

Keep careful track of your income through tax returns, W-2 statements, pay stubs, and so on, because your income will vary from year to year in this business, and the disability amount should be based on accurate recent averages, not on the lowest-paying year the insurance company can find.

Individual policies can cost several thousand dollars a year, depending on benefits and age, and group policies generally cost a few hundred dollars a year. In many cases, leaving the group will mean forfeiting the insurance.

Errors and Omissions This is the colloquial malpractice insurance, called E & O (errors and omissions) in the industry. You can obtain individual policies or coverage through group plans in some trade associations. This protects you from a suit alleging that your advice, training, interventions, coaching, or other actions caused the client harm. This insurance will normally pay for legal fees as well as any actual judgments against you, up to the limit of the policy. It is relatively inexpensive when you ' re starting out, since premiums are usually based on revenue volume.

Some organizations—Hewlett-Packard being a large and prime example—will usually not do business with a consultant or consulting firm without evidence of an in-force malpractice policy, so this insurance is often a pragmatic business necessity; but it should be a must in any case. Expect to pay a few hundred dollars annually in your first years in business, but this can easily reach $2,500 or more for a solo consultant.

Note that there is a prior-condition clause in good policies, which means they will reach back and cover you for a period of a year or two before taking the policy, which is an excellent feature.

Liability Liability insurance protects you in the event someone trips over the wire leading to the projector you're using during your presentation. It doesn't matter that the projector isn't yours or the participant was drunk or clumsy. The hotel, client, projector manufacturer, and you will all be sued.

This coverage is inexpensive and also available individually or in groups. You can expect to pay a few hundred dollars annually.

Property This insurance comes under several names, including the misleading marine policy. Essentially, it covers your equipment and property in your office and while traveling. Be very careful, because business equipment you own and leased equipment in your home office are often not covered by your homeowner's or renter's insurance, unless you specifically pay for a rider. Consequently, you need either a separate endorsement with an extra premium from your homeowner's or renter's insurance company, or separate business coverage.

Since we're talking about computers, copiers, fax machines, and the like, the cost of damage or theft is significant. And some leasing companies will want themselves named as first payee on a discrete policy. Under whatever name, make sure all of your expensive equipment is covered, especially since the premium cost is minimal.

Major Medical and Health Your company should provide for health coverage. You can often access very favorable rates through collaboratives that put small businesses together so they may secure group rates. Sometimes you can continue coverage from a former employer, although that is usually limited in duration. If a spouse works and plans to continue working, and coverage is provided through that employment, then this coverage is probably not needed (and can't be duplicated legally, anyway).

You can secure hospitalization, major medical, dental, eye care, and other coverages, depending on what you need and the size and ages of your family. My bias is that you should incorporate in such a way that all health insurance premiums are paid by the company for your entire family, all uninsured costs are paid directly from company funds, and you pay no health costs whatsoever from after-tax income. This is simply smart money management in an era of rising health care costs.

Life I'm not going to dwell on this, since it's important regardless of your employment status. Under current laws, the company can pay for only the first $50,000 in coverage as a business expense, and even that will be reflected as compensation, so life insurance is essentially a private matter. My bias: Never use insurance as an investment vehicle, so use term insurance solely.

Umbrella Liability This is also an individual coverage that can't be paid for through company funds. However, this is very inexpensive insurance (costing only hundreds of dollars for millions in coverage) which kicks in when your auto insurance, liability insurance, or other insurance runs out in the event of a lawsuit or judgment. Consequently, it can protect your company and your family, and should be a part of every professional's insurance portfolio.

Long-Term Care (LTC) Increasingly popular in the last few years, this provides for support should you suffer a major illness or accident requiring extended care. It is much less expensive to purchase when young, of course, so buy it as soon as feasible. It can be quite expensive at older ages. But it provides for care services within the home, a huge benefit to avoid institutionalized care.

At first, it will seem easy to merely pay yourself a salary out of company funds and make the appropriate tax deductions. However, determining the appropriate tax deductions is never easy, the government has made electronic filings mandatory, and an error here can result in serious repercussions. My financial adviser ordered me to get a payroll service and a bookkeeper when I turned in an overflowing shoe box of receipts and salary records.

The two largest services I know of are Paychex and ADT. Both services will issue payroll checks electronically deducted from your business account and deposited into your personal account. The checks can be scheduled, identical amounts, or they can be situational in any amount you desire. If other family members are on the payroll, they will be included according to your instructions. They will deduct taxes at all levels, Medicare, Social Security, and other liens automatically. You can specify the withholding amounts to further regulate your cash flow. They will provide electronic reporting to all necessary agencies and provide you with a hard copy for your records. They also offer ancillary services, such as 401(k) investing.

The best payroll service at our levels of transactions will generally cost from $125 to $250 per month, depending on frequency of use. You can't afford not to do this.

You may not need a bookkeeper at the outset, but you will once you move into six figures. Find a local person who will charge you by the hour only when services are actually needed, usually monthly^[20]. The bookkeeper will run a general ledger, furnish a balance sheet with expense and income statements, print comparisons with prior periods, and balance your checkbooks, reconciling differences. The bookkeeper will also provide the input for your financial adviser's tax requirements at the end of the year.

A good bookkeeper and payroll service will actually save you thousands of dollars of your time, and hundreds of hours of stress. You should be able to get a first-rate bookkeeper for $15 to $30 per hour, or about $125 to $225 per month's returns.

You may not have a web site from the beginning, but you'll need one relatively quickly^[21]. The Internet is too much of a global marketing and credibility asset for individual consultants to ignore for long^[22].

The web site designer will probably be different from the literature designer discussed earlier. This person should be able to create a unique and attractive site, making the best use of technology while not overwhelming your message with too many bells and whistles. There is nothing wrong with using your graphic designer to carry over themes and images to the web design.

The best web site designers are people whose work you can see on others' sites, who will work with you personally (even if only by phone and e-mail—they're not likely to be down the block), and who create user-friendly sites. As with any other designer, you provide the copy and what you want to communicate, and the designer should take care of the aesthetics and technology. Never accept marketing advice from a web designer, who will tend to see the world only through that medium.

The hallmarks of an effective web site for consultants are:

If you don't establish a web page from the outset, at least make it a habit to visit others and find out what makes sense for you. Merely being a small part of other sites (trade associations, consultant listings) is not sufficient. These days, a web site is more important than a corporate brochure.

And now some words on blogging and what is called social networking (LinkedIn, Facebook, Twitter, YouTube, and so on).

Blogs work best when you already have a brand. While crazy claims abound, most bloggers do not build a brand, and most blogs (there are an estimated 200 million blogs as of this writing) are inane.

The key for you is this: How are corporate executives buying consulting services? They are buying them through references, referrals, hearing people speak, reading commercially published books, and so forth. For the new consultant trying to reach corporate buyers from a standing start, social media are not the place to be investing time and money and effort. Not for this buying audience. They are easy to create and access, but can be a huge energy drain with little result.

Don't be lulled by the exception, and be aware that many successes are actually people who are marketing to other bloggers, not to corporate buyers. People such as David Maister and Seth Godin and Jeff Gitomer and I have established brands through a myriad of approaches, making our blogs popular as a result. You can get there, but don't start there^[23].

Finally, let's briefly discuss trade association membership. These associations serve the following purposes for a start-up practice:

The major trade association for consultants in the United States is the Institute of Management Consultants (IMC)^[24]. It has chapters around the country, and affiliations internationally with similar organizations. It provides the Certified Management Consultant (CMC) designation when certain criteria are met (successful consulting assignments, testimonials, examination on ethics, and so on) although, alas, the designation is not widely known or respected outside of the organization itself. The local chapter meetings can provide solid networking support, and an annual meeting in Reno attracts about 250 consultants at all levels. Annual dues are $300. The IMC is headquartered in Washington, D.C. (http://imcusa.org).

I have founded an organization, The Society for Advancement of Consulting (SAC) which provides professional discounts, an annual meeting, monthly newsletters and press releases, a featured "consultant of the month," and other benefits. New consultants may join as affiliate members. Initial dues are $400, renewal $335 (consultingsociety.com).

The American Society for Training and Development (ASTD) is the longtime trade association for training professionals, although increasingly (more than half) the people at both chapter and annual conventions seem to be consultants. The ASTD provides a resource center and monthly magazine (T&D Journal) as well as other products and services, including a buyers guide, and a members directory^[25]. If you focus on training or human resources issues, membership makes sense, if for nothing else than to monitor the state of the art and current hot topics.

An allied group is the Society for Human Resource Management (SHRM). This is strongly oriented toward human resources executives and managers. It, too, hosts an annual convention and regional meetings, and it publishes HRMagazine. It has a very large and active special interest group for consultants across the country, with local chapters (shrm.org).

The OD Network has chapter and national meetings, and is focused on consultants, internal and external, specializing in organizational development and change management (odnetwork.org).

All of these groups offer a variety of insurance, travel, and related benefits group plans that may make sense for you to consider.

Take the time to establish your practice with the professional underpinning it needs for success, and you won't have to waste time while you're pursuing that success.

Final thought : There is no one right way, but there are uniquely correct destinations. Ensure that your legal and financial status is in good hands and providing the proper support.