From CIO to consultant: Top tips for cutting the red tape

Self-employment is about being your own boss - and that means there's no one else to deal with the paperwork and bureaucracy. Mike Barrett offers some advice on how to manage these and other headaches.

You've completed your first paid assignment - you're a real, bona fide consultant with a paying customer and money to spend.

Thing is, you can't pay the cheque into the bank because it's made out in the company name. And you can't open a bank account with a limited company name until you've got a registration number from Companies House.

And setting up a limited company takes at least two weeks with forms going back and forth between you, your accountant and Companies House.

And you decided to start the process right in the middle of the Christmas post season...

Welcome to the world of bureaucracy that is the curse of the small business. Here are my top tips for how to beat the red tape, start a business for next to nothing and make sure you hit the ground running.

Sort out your finances

Unless you are extremely lucky, you'll probably not bill much work in the first few weeks and even months of operation. There's always the possibility of working for your old employers for a day here and there but that isn't guaranteed and anyway, you left to get away right? Even if you can bill, you'll not likely get paid for at least 30 and up to 90 days depending on who you are working for.

So make sure you've set aside enough cash for the start-up period. Seeing your bank balance dwindle during this time is potentially very depressing. Make sure you have accepted it is going to happen and that your spouse/partner understands this too. This is an investment period, you'll get it back later (and more) but that trend line on your bank statement is going to be heading in the wrong direction for the first few months.

Also, separate out your personal and business costs. Most of the expenses are relatively small amounts for travel, food and entertaining. Get a company credit card when you open your bank account and keep all of this separate from your personal spending.

Set up an office

Most of us work from home but try to make sure you have an office away from the rest of the house. It's impossible to work properly on the kitchen table - you need somewhere you can leave at night and return to the next morning without having to clear up.

Even with a dedicated office, if you've got family who are going to be around during the day there will be distractions. Make sure everyone knows what your work hours are and stick to them.

Be organised

This may sound obvious but organisation requires discipline, especially in the areas where you are learning - finance, marketing and sales in my case. When I had a day job, I felt pretty organised but my skills weren't good enough to get me through the first six weeks of self-employment.

If you haven't already heard of David Allen, I would recommend his book Getting Things Done - and pay the $10 for instructions on how to implement his techniques into Outlook from the GTD website. Don't do this half-heartedly - follow the process to the letter and it will literally change your life.

If you've never used mindmapping software before, try it. It's great for brainstorming and getting the myriad of ideas down before organising them into a plan.

In areas that you have no experience, find out what a good process looks like. For me this means talking to people who know about sales, marketing and finance processes - then putting those processes in place and following them rigorously.

For instance, finance for consultants is like having to do your expenses every day, keeping track of lots of small bills for outgoing costs and larger, less frequent invoices for incoming.

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