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archive:fun:consult.how
                  GETTING STARTED - Part 1

The one nice advantage to being a Computer Consultant is that you are self-employed. To be self-employed you have to act self- employed. If you don't believe it, no one else will either.

CHOOSING A BUSINESS NAME:

   When you sit down to choose a Business Name think long
   lasting and professional.  First, try your name or initials
   with the words "& Associates" by it.  If you don't like
   that approach, then go through the yellow pages of your
   your phone book and check the listings of "Computer
   Stores", "Computer Design and Consultants" and "Employment
   Agencies" and look at names.  Ask friends and relatives
   for suggestions.  Your Business Name makes a very
   important statement about you, so take your time.  It
   will be worth it.

BUSINESS ADDRESS:

   Most of us like to be home based.  For those of you who
   can afford the luxury of a private office, this section
   is not for you.  However, if you do plan to work from
   your home, read on.
   I have friends who have used their apartment numbers as
   "Suite" numbers.  That is fine.  But if you own a home or
   have a mail box like mine which collects so much junk mail
   that I usually take the whole pile, sometimes including
   important bills, and throw it in the trash.
   So the answer for me was to check into P. O. Box's.  This
   also protects you from having clients show up at your door
   demanding work at strange hours.
   The United States Post Office Boxes are the most reasonable
   cost wise.  However, if you plan to receive items shipped
   UPS, you will not be able to receive them at this P. O.
   address.
   For those of you who don't mind $10 to $12 a month, there is
   another alternative.  There are P. O. Box rental companies
   which have a street address you can use.  You then use the
   Box number as your "Suite" number.  Since this is a street
   address, UPS will deliver parcels to you here.  Check the
   yellow page listing under "Mail Receiving Service", to
   find one of these service near you.  This is also the
   address that will go on your letterhead.

*Excerpted from The Computer Consultant's Consultant, copyright 1985 by Valerie Hood, all rights reserved

                 GETTING STARTED - Part Two

BUSINESS CARDS AND LETTERHEAD:

   The first step to take for networking with clients and
   people you will be meeting is to have business cards and
   letterhead stationery.
   If your budget is tight, there are printers listed in the
   yellow pages who offer overnight "Starter Packages" which
   consist of 500 letterhead, 500 envelopes and 500 business
   cards for a reasonable fee.
   If you are more ambitious, you may want to go to a type-
   setter and choose a print style and/or a logo and have
   "boards" prepared for custom designed stationery.  Fees
   vary so you should do some calling on quotes for typesetting
   of your letterhead, envelopes and business cards.
   To save money on printing costs, when you use an
   independent typesetter to design your own format, you can
   buy your own paper for your stationery.  In the yellow pages
   under "Paper" you can usually find "Self Help Service
   Centers".  By purchasing your own paper and envelopes from
   these centers, you save a substantial amount of money.  Plus
   you get to choose what you want and not what the printer
   gives you.
   If you wish to have your letterhead printed on continous
   form paper there are printers listed under "Printers -
   Continuous & Individual Form" in the yellow pages.  However,
   if you use the "Starter Package" as mentioned above you
   probably will not receive the "die" used for printing
   your stationery.  The quick overnight jobs are ususally
   done with paper "die", so it's life span is very short.
   When you have your stationey set up by a typesetter, they
   paste your information for letterhead, envelopes and
   business cards on "boards".  The printer then uses these
   "boards" to make metal "die" for printing your stationery.
   These metal "die" can be used over and over provided you
   store them in such a manner so they do not get scratched.
   The printer can then use these metal"die" to print
   continuous form paper.
   Of course, you can always pay the continous form printer
   to prepare the proper "die" for you, in the event you
   have not gone the custom typesetting route but want this
   type of stationery.

*Excerpted from The Computer Consultant's Consultant, copyright 1985 by Valerie Hood, all rights reserved

                GETTING STARTED - Part Three

FICTICIOUS BUSINESS NAME STATEMENT:

   If you are newly starting out as a Computer Consultant and
   plan to be a one man operation, there is a very cost
   effective way to being a legitimate business entity without
   incorporating.  This is done by filing a "Ficticious
   Business Name Statement".  Most local newspapers offer this
   service.  The easiest way of obtaining the Ficticious Business
   Name Statement form is to call whatever newspaper you decide
   on and ask them to send you the appropriate information
   needed for filing.
   Once you receive the form in the mail, fill it out.  When the
   form is completed, mail it back to the newspaper with the
   proper filing fees (at this writing it was $40.00).
   A notice will run in the newspaper for four weeks.
   If there is no contesting of your business name from any
   other proprietor in this period, then you will receive
   a "Proof of Publication" form showing the dates your
   notice ran.  Your notice will be attached and a filing date
   will be listed above the notice.
   At this point you are an official bonafide business.
   Congratulations!
   Now, I'm sure some of you are asking, "But I want to
   be on my own.  I don't need a business.  I can still take
   advantage of the tax benefits for being self employed.  Why
   should I want to do this?"   The answer is you can take it
   to the bank.

BUSINESS CHECKING ACCOUNT:

   It is always a good idea to have a business checking account
   for numerous reasons: 1)  This is a very convenient way of
   keeping your personal and business expenses separate; 2)  If
   you plan to sell products on a retail level, a business
   account looks good when you are signing an agreement with
   the distributor.  It gives the air that you are an
   established firm; and, 3)  You create a business bank
   reference, which never looks bad when you apply for loans.
   There are many more reasons, but these are the ones that have
   been important to me.
   Before you open a Business Checking Account, call around to
   various banks and see what their requirements and fees are
   for a business account.  Some banks require a minimum
   opening balance of $500 and some require $1,000.  Don't
   hesitate to interview your bank.  Make an appointment with
   one of the chief officers and find out about lines of
   credit towards outstanding invoices, loans and their
   feelings about small businesses in general.  If you cannot
   get an appointment, then write them off.  Your business
   would mean nothing to them anyway.
   Do not open your account with a Savings and Loan.  Even
   though some advertise free checking accounts and will open
   an account in your business name, you cannot borrow money
   against business invoices.  You may find yourself not
   being able to get the proper help you need as your business
   grows.
   So, now you have selected a bank.  In order to open the
   account you will need to take the "Proof of Publication"
   form sent to you verifying that you are in fact a bonafide
   business and the minimum deposit.
   The next step is to wait for the printed checks to arrive
   in the mail.  If you want, you can order continuous form
   checks instead.  This is not done through the bank but
   from outside vendors and printers.

*Excerpted from The Computer Consultant's Consultant, copyright 1985 by Valerie Hood, all rights reserved

                 GETTING STARTED - Part Four

BUSINESS PHONES:

   Yes, getting a business line is more expensive than a
   private line but there are very good benefits for you.
   Number one, you can be listed under your business name,
   or if you have decided to stay solo, a business line lets
   you be listed in the yellow pages as well.
   One word of caution...beware of the Yellow Pages Sales Reps.
   They will do their darndest to make you feel your business
   will not survive without a quarter page, five hundred dollar
   a month ad.  Keep in mind that you want your business to
   support you!  You do not want to support your business!
   For example, I chose two directories I wanted to be listed
   in and selected a one line bold face print for the white
   pages and took 5 different subject listings in the yellow
   pages with the standard bifocal print and no frills.  My
   phone charges run about $30. a month with these two
   directories.  The most important thing is that you are
   listed.  In your business, networking pays off more than
   advertising in the Yellow Pages.
   Los Angeles is serviced by two different phone companies.
   One is General Telephone and the other is Pacific Telephone.
   When I first started my business, I wanted to be listed in
   the Beverly Hills phone directory also.  So the infamous
   Yellow Page Sales Rep gladly took my request.  When I
   received the directory, I found out it was a Neighborhood
   Phone Book directory.  I was never told this.  When I called
   asking why I wasn't in the main directory for Beverly Hills,
   I was told that Beverly Hills was covered by Pacific
   Telephone and I would need a Pacific Telephone line to be
   listed.  That was $46 down the drain.
   Do some research if you live in a metropolitan area with
   more than one phone company.  Stay within the areas your
   phone company services.  Again, I will repeat...much of your
   success will be through networking, not a phone listing.
   Don't forget a good answering machine or service either.

*Excerpted from the Computer Consultant's Consultant, copyright 1985, by Valerie Hood, all rights reserved

                  GETTING STARTED - Part 5

BUSINESS PERMIT:

   If you are going to conduct a business, and advertise as
   one, at least in the state of California, you are required
   to obtain a "Business Permit" from the city you are
   conducting your business in.
   You can obtain the Permit from the "City Clerk - Tax and
   Permit Division".  You must go and apply in person.
   The initial Business Permit cost me $30.  My white cash
   register receipt was proof of my business until I received
   the permit in the mail.  It is called a "City of Los
   Angeles Tax Registration Certificate".
   Due to zoning laws, in California, you are not allowed to
   conduct business with clients in your home.  This is due
   to foot traffic and fire laws.  So, use your home address
   as a "Business Address For Mail Purposes Only".  I did not
   use my P. O. Address as a business address just in case the
   Fire Marshall or someone else showed up at my 3" by 5" box
   to post "Maximum Occupancy Allowed".  I was told by the clerk
   that I was supposed to pick and deliver any materials from
   clients.
   Each year you will be sent an "Annual Tax Renewal" form to
   retain your Business Permit.  The more you earn through
   your business the more your Business Tax will be.  However,
   this tax can be deducted as a business expense on the
   "Schedule C - Profit or (Loss) From a Business or
   Profession" which is filed with your 1040 Federal Income
   Tax Return.
   One word of caution is to remember that the Business
   Permit is valid from January 1st to December 31 of each
   year.  If you file for a Business Permit in December and
   pay your $30, don't be surprised in January, one month
   later, when you are billed for another $30.  That's how
   the system works.

*Excerpted from The Computer Consultant's Network, copyright 1985, by Valerie Hood, all rights reserved

                 GETTING STARTED - Part Six

RESALE NUMBER:

   If you are planning to provide clients with supplies, plan
   to set up computer systems, sell software or anything else
   relating to your business, you need to apply for a Resale
   Number.
   To obtain a Resale Number check for the nearest "Board of
   Equalization" to you under "State Government Offices -
   California State of" in white pages of your phone
   directory.  Remember I am writing in regards to procedures
   for Los Angeles, California.  Check with other retailers
   in your area and ask what the requirements are to obtain
   a Resale Number.
   You will have to apply in person.  The best time to go and
   apply is when the office first opens.  Otherwise, the wait
   can be quite lengthy.  When you arrive, ask for the proper
   papers to fill out to apply for a new Resale Number.
   After you have filled out the questionaire and returned it
   to the receptionist, it will be forwarded to an interviewer.
   The interviewer will call your name and go over your
   questionaire and ask you questions.  It is at this point
   that you will be denied or permitted to obtain a Resale
   Number.
   One of the questions will be how much you estimate in sales
   for the upcoming year.  Depending on the amount, you may be
   required to put up a deposit against future taxes to
   establish your account.  Be honest with them...if you cannot
   estimate the yearly sales, then tell them so.
   Additionally, before you can obtain a Resale Number you must
   have already had made a sale.  Otherwise, you will not be
   permitted a Resale Number until you do.
   Once you have been approved, every quarter you will receive
   a "State, Local and District Sales and Use Tax Return".
   When you make a sale, you charge the client sales tax.  It
   is with this Return that you pay the State the sales tax
   you have collected for that quarter.
   The advantage to having a Resale Number is that you are
   allowed to purchase merchandise at "Wholesale Prices" from
   distributors of products.  This discount is usually anywhere
   from 20% to 50% depending upon the quantity of merchandise
   purchased.  You, the Reseller, are not charged sales tax
   on the wholesale price of your purchase.  However, you are
   required to charge the appropriate Sales Tax on the "Retail
   Price" of the merchandise upon sale to a customer.  The
   difference between your wholesale price and your retail price
   is your "Profit Margin".  On top of your consulting fees,
   the additional profit can be a nice enhancement to your
   financial status especially if you are setting up computer
   systems and obtaining them at a discount from the distributors.
   If you plan to do this, most companies have you sign an
   agreement and complete a credit application as a "VAR"
   (Value Added Reseller).  If you are interested in being a VAR,
   a business checking account and a resale number are a must.

*Excerpted from The Computer Consultant's Consultant, copyright 1985 by Valerie Hood, all rights reserved

                         ADVERTISING

I have found one very reasonable ways to go. It costs $55. as of this writing.

"MIS WEEK Consultants Directory". The directory is printed twice a year. There is a Spring Directory and a Fall Directory. The directory is an alphabetical listing of consulting firms and services and also has a geographic listing of consulting firms by regions served.

My ad has always paid for itself. To be honest, from that listing one company alone has sent me business for two years. It is the only sure fire avenue I have seen pay off immediately.

To inquire for advertising in MIS WEEK, you can contact the New York office directly at (212) 741-4010 (for an ad counselor) or 741-4014 (for space reservations) or write to Classified Advertising Department, MIS Week, 7 East 12th Street, New York, New York 10003.

Or contact:

   615 South Flower Street
   Suite 200
   Los Angeles, California 90017
   (213) 612-0725

MIS Week also features a special "Consulting Services" section which runs every fourth issue of each month. One column inch is 1-15/16". The rates as of this writing are as follows:

   Open rate                          $55.00 per column inch
   3 consecutive times                $51.00  "    "     "
   6 times in one year                $49.50  "    "     "
   12 times in one year               $48.00  "    "     "

I honestly cannot say if this every fourth week advertising actually works. I asked for some samples and I received one year old issues and the consultants section was very sparse. I would highly recommend just sticking to the bi-yearly directories.

*Excerpted from The Computer Consultant's Network, copyright 1985 by Valerie Hood, all rights reserved

                        PUBLICATIONS

One of the major secrets to success is to be well informed. With all the publications on the market today, it is easy to be overwhelmed with literature.

When I decided to delve into this new electronic world, I admit, I knew nothing. I was a newly reformed computer phobic. I knew there was something fascinating to this whole area but I didn't know how to find it. At this stage, I was only as far as Valdocs and my QX-10. The infamous A> at the CP/M system level scared me half to death. But, I was going to make a living at this.

I have found the longer we are in the industry, the lazier we get about staying on top of even the littlest detail. I mean, it has got be such an impactful piece of news such as "NEW UNIX 5 MEGABYTE BUBBLE MEMORY PORTABLE TO HIT THE MARKET FOR $1,000" to catch out attention. I admit I am finding myself falling into that.

Eventually, the day will come when you will be found by every publication possible. Most of them will look worthy. Some of them will be reasonable in price and some will be quite expensive. These expensive publications try to make you feel how "elite" you will be if you subscribe. There are the many software directories that are very valuable to have. In my research and in actually subscribing to one with a 30 day trial offer, I found a very impressive subscription service. For me, it paid for itself within one week. It is called DATA SOURCES.

I found this one quite by accident. Contrary to what I said above about being found, I found Data Sources. It was a tiny ad in one of the OEM newspapers. It had a 30 day trial offer so my curiosity said, "Why not?"

About six weeks later a package arrived. It was about 8 1/2 by 11 by 4 inches and weighed about 10 or more pounds. I opened it and found 2 large directories. One labeled "Software" and one labled "Hardware - Data Communications". Of course, there was the invoice staring at me…AMOUNT DUE - $159.00. Gasp! So I started looking through all of the information and was sold in five minutes. I do not know what the price will be at the time of this writing. A regular subscription rate is $210.00 for the year.

Data Sources updates these directories 4 times a year. Presently my 1st Quarter 1985 issue is marked up with notes, indexed and coded. The software volume looks like I've used this for 10 years already and it's only one month old. Am I going to have to do this again in the 2nd Quarter?

Data Sources contains approximately 21,000 software packages, for hundreds of business and vertical market applications and are indexed by function compatiblility, package name and company. There are approximately over 18,000 hardware and data communications products, from micros to mainframes, printers to comm processors and everything inbetween, are categorized and described for instant reference. Approximately 9,000 companies are profiled with complete contact information and pertinent details for vendor qualification.

I used Data Sources to locate all of the companies listed in Chapter 2 which are consulting houses and handle personnel. This saved me a lot of time in research.

Once you subscribe to Data Sources there is a Hotline to answer any questions you may have. Third party maintenance companies and dial-up security equipment companies have been recently added to the directory. Check it out at your local library.

It is a must for the serious computer professional.

*Excerpted from The Computer Consultant's Consultant, copyright 1985 by Valerie Hood, all rights reserved

P.S. Details, details….the address is:

           Data Sources
           P.O. Box 5845
           Cherry Hills, NJ 08034
           Editor:  Kathy Thompson

Is approximately $179 a year, updated quarterly and well worth it.

                     CONTRACTS AND FEES

You probably think this is going to an answer to all of your questions regarding Contracts and Fees. Wrong. There is really no right answer or perfect form agreement that is going to work for everyone…the truth is, everyone is different. My advice is to seek a reputable attorney in computer law and spend an hour talking to him/her.

If you are consultant being hired through a personnel agency or through another consulting house, they usually will carry their own agreements for you to sign.

I would also suggest to talk with other consultant's about their agreements. Ask if they have encountered any problems and how they handled the situation. Ask for tips or tricks of the trade they have learned. For example, one of my electronic pen pals, Frank, is a consultant. I asked him what he could suggest for other consultants. Since he does programming, he makes sure that it states in the contract that all programs developed by him remain his sole property until paid in full. He further suggests to find out through various contacts as much as you can about the company, who they deal with, how they conduct business and pay their bills.

Fees are another world of inconsistencies. What do you charge? How do you decide? Well, from my experience I have seen a programmer making $8 to $10 an hour while an ex-Burger King Employee comes in at $12.50 an hour just to sit down and play with a piece of software and give a novice point of view. I have seen people with years of mainframe experience making $25 an hour while another person makes $40 an hour teaching off-the-shelf word processing programs to individuals.

I have spoken with head hunters who chuckle telling me of people who come out of aerospace with one to two years experience and want $30 to $35 dollars an hour. He goes on laughing. Then I say, "Well I've only been in microcomputers for one and half years and I'm making $30 to $40 an hour, depending on the job." He chokes and patronizingly says, "Well, honey, that's because you're smart." And I say, "Aren't they?"

In my opinion, go for what you feel you are worth. The worst that can happen is to hear, "We don't want to pay that much". Then you're open to negotiate.

If an offer comes along, talk to other consultants and see how they feel. But get more than one opinion. You do not want to sell yourself short. For example, I have one friend who makes $25 an hour programming on a certain mainframe. I have another friend who swears that kind of job is not worth more than $9 an hour.

So…bottom line, go for what you feel you are worth. If that doesn't work and you honestly want that particular job or contract, negotiate. There is such a thing as a raise, even in consulting.

Another area which is important is what to charge as a retainer. A retainer is put into effect when a client may need you on call but doesn't know when. So he pays you a monthly retainer to be available for a day or so many days a month.

Dr. Jeffrey Lant, in his book, "The Consultant's Kit", which I highly recommend, suggests that you take your daily rate and times that times four and that is your monthly retainer fee. However, this is for only being available one day a month. He suggests you charge your hourly fee over and above the day used.

Then again, I have seen proposal's cross my desk where the person charges only their daily rate as the monthly retainer rate. Naturally, I much prefer Dr. Lant's suggestion.

Sometimes, for those of you who also do software training and education, client's want to remain very cost effective and have you come in for only one or two hours. Somehow they are always the ones 50 miles away. After gas, car maintenance, the time of getting ready, one to two hours does not quite seem worth it. I would advise you to state up front that you charge a 4 hour minimum and milage. The usual response I get is, "Oh. Ok. What time can you be here?"

There are no set rules. Do research. Talk to an attorney. Most importantly, Network.

*Excerpted from The Computer Consultant's Consultant, copyright 1985 by Valerie Hood, all rights reserved

              BUSINESS EXPENSES AND WRITE OFFS

I was caught off guard at all of the consultants I would run into who did not realize the benefits they were entitled to as independent contractors. When I was working permanent full time, I still had a business on the side earning additional income. Under the law this is considered self-employment. I was able to deduct certain allowable expenses for that business, even though I was employed full time by a permanent employer. These allowances were taken on the "Schedule C - Profit or (Loss) From a Business or Profession (Sole Proprietorship)". This Schedule is an addendum to your "1040 - U.S. Individual Income Tax Return".

Yes, I am going to tell you to speak with an accountant, or take a tax course, but this is an area where it is the same for everyone, so examples can be given. The IRS also has booklets you can order which explain in detail your rights to being self- employed.

If you are a Partnership or a Corporation you cannot use Schedule C and should consult with an accountant. But, for the purposes of this book, we are concentrating on the individual self- employed consultant.

Below I will list the areas which are considered to be allowable decuctions that are imprinted on Schedule C and try to explain them. Again, I stress to order booklets from the IRS and/or speak to an accountant. Allowable deductions are:

1. Advertising - You are allowed to deduct any expenses you incur for advertising as long as it pertains to promoting your business to the public for purposes of generating income. This would cover ads in any media (i.e. newspapers, magazines, radio or television).

2. Bad debts from sales or services - Since we work on what the IRS calls a "Cash Method" you are not allowed to deduct any bad debts as of this writing unless you had previously reported the amount as income.

We, the Cash Method Taxpayers, have to deal with collection agencies, small claims court and attorneys to handle our money matters.

3. Bank service charges - These can be bank charges on business checking accounts (i.e. monthly fee plus per check charge) or business credit card erroneous bank charges (i.e. the charges the bank charges for using the automated teller). Remember, these are only for those charges used in connection with your business.

4. Car and truck expenses - This is a touchy area. It always seems to change every year. So vaguely this allows you to deduct the percentage of the monthly payment of your car used for business. For example, you may need your car for 50% personal and 50% business. Your monthly payment is $250. Considering the car has been used for the business for the entire year you take $250 x 12 = $3,000 x 50% = $1,500 as your allowable deduction.

You are also allowed to deduct the cost of maintenance and repairs as well as gas and car washes. Parking fees and tolls would be applied here also.

As I said, this is one of those touchy areas. Do your homework.

5. Commissions - This could be a deduction when you hire an advertising agency and they place your advertising for you. Usually the standard agency commission is 15%. Since this is considered to be the agencies income, on which they will pay taxes, you are allowed to deduct it.

Additionally, this could also be sales commissions you have paid to personnel or other contractor's working with you.

6. Depletion - This does not apply to us.

7. Depreciation and Section 179 deduction from Form 4562 - You can deduct a certain percentage of the cost of assets you buy to use in your business to hold or produce investment income.

Since your car is a business expense, you may be able to depreciate the business portion. Seek the advice of an accountant. Please make note that if you lease your car you are not entitled to a depreciation deduction.

Our obvious depreciation expense would be our computers. You cannot depreciate software. The law is getting sticky about computers. You must be able to prove over 50% business use at the time of this writing.

Some of the assets depreciated may also qualify you to take an investment tax credit. Again, you know, talk to an accountant.

This is not used when you include any depreciation amounts in Part III of Schedule C - Costs of Good Sold and/or Operations.

8. Dues and publications - Your subscription to business related publications (books, magazines, newspapers, newsletters) if needed for business are deductible.

Additionally, any dues paid for membership in professional associations are deductible (i.e. dues to join the Independent Computer Consultants Association).

9. Employee benefit programs - Amounts go here that are not included in pension and profit-sharing plans mentioned later. Contributions to insurance, health and welfare programs go here. For example, even though we are not, but if we were Writers Guild Members, we would be required to pay 10% on top of our salary to the Pension, Health and Welfare Fund. This amount would be deducted here.

10. Freight - If you do not include this in the Cost of Goods Sold and/or Operations section, charges you incur for freight shipping costs would go here. For example, your computer goes down, the warranty has expired, the store you purchased it from is out of business and you are forced to ship it to the distributor for repair. The cost of shipping would be deducted here.

11. Insurance - Auto Insurance, Renters/Business Insurance premiums would be deducted here.

12. Interest on business indebtedness - If you have loans incurred for business reasons, the interest you pay is deducted here.

13. Laundry and cleaning - Does not apply to us.

14. Legal and professional services - Legal costs incurred pertaining to your business can be deducted here. This also would allow for other consulting fees, accountants, etc.

15. Office expense - This is a strange one. Expense amounts go here that don't fit anywhere else. There is a place for "Other expenses", so this is up in the air. Talk to an accountant. Things I put here can go in the "Other expenses", so I suppose it's up to you, as long as you can verify it being an expense.

16. Pension and profit-sharing plans - You should enter amounts here made as an employer on your behalf (but not voluntary contributions you made as an employee on your behalf). You will have to file form 5500-C or 5500-R if you fill this in with less than 100 participants. This is another area where you will need advice.

17. Rent on business property - This is where Uncle Sam gets real sticky. Since for the purposes of this book we work from our homes read this one with caution. You are only allowed to deduct that percentage portion or square footage of the home used strictly for business. You better be able to prove this too. The law will not allow the deduction if there is any personal activity affiliated in this area. A separate bedroom is better for an office, that way the deduction is more solid.

18. Repairs - Since your warranty was up on the computer you had to pay for the cost of the repair. That amount goes here.

19. Supplies - If you don't include in Cost of Goods Sold and/or operations, amounts for ribbons, disks, paper, pens and whatever else would go here.

20. Taxes - Taxes reimbursed to the state with your Resale# and local Business permit taxes would be deducted here. If you paid cash for an item, the sales tax could be deducted here also.

21. Travel and entertainment - Amounts are allowed here only for expenses incurred in connection with your business. Airline tickets, dinners/lunches with clients, hotel accomodations, etc. Tread lightly on those conventions held in the Bahamas or on Cruise ships. Make sure you can prove this is legitmate without a doubt.

22. Utilities and telephone - This is self explanatory. This is where it is a nice idea to have a business line so there will be no questions as to what were personal calls and what were business.

23. Wages - Any amounts you paid for outside help would be deducted here. This does not allow for amounts paid to yourself. If you pay an individual person over $1,000. you are required by law to file a 1099 form to Uncle Sam.

24. Windfall profit tax - This does not apply to us.

25. Other expenses - Now this is where I may put what is an office expense. It gets confusing to me. But items I deduct here are items like Business Gifts, P.O. Box rental, Postage, Xeroxing, Typesetting, and other subscription services needed for the business like CompuServe, MCI Mail, Telex, etc.

This is where we would add up all of our deductions and subtract them from our Gross receipts/sales amount. This amount would be our profit or (loss) from the business and would be carried over to the proper line on the 1040 form.

There is a part three which I have mentioned a few times but basically applies to those of you who are going to be carrying an inventory.

State returns will vary from state to state so you know what to do. Yes, speak with an accountant.

SELF-PUBLISHING

How to publish your software/books without a high overhead:

1) Get it copyrighted. Call the Federal Building (213-688-3800)

   and request the proper copyright filing forms for software
   programs/books.

2) Next step is to get your IBSN #.

   Send a letter requesting a block of ISBN numbers to Emery I.
   Koltay, Director, U.S. IBSN and SAN Agency, R.R. Bowker
   Company, 205 East 42nd Street, New York, New York 10017.
   The block (amount) of numbers you receive depends on the
   amount of items you want to publish within the next year.
   Request a SAN number at the same time.  You can also
   request "The IBSN System's User Manual" and Bowker's
   brochure describing its products and services for
   publishers.
   I'll explain the SAN number later.  It just makes everything
   easier for stores and distibutors to order material from
   you.

3) Write the CIP Division, Library of Congress, Washington,

   D.C. 20540 and request a Publisher's Response Form and
   "Cataloging in Publication: Information for Participating
   Publishers."

4) Now write Beverly Palacio, ABI Department, R.R. Bowker

   Company, 205 East 42nd Street, New York, New York 10017
   and request information on getting listed in "The
   Advance Book Information" (ABI) Program.
   This is free.  This gets you listed on the Books in Print
   database available to libraries and book sellers/
   distributors on line.

5) Then write Jaime Ariza, Sales Representative, R.R. Bowker

   company, 205 East 42nd Street, New York, New York 10017
   for a media kit for a listing in the PTLA (The Publishers
   Trade List Annual.
   This does cost.  As far as you are concerned you can pay
   only $30 to get a single title listing.  This directory
   is used by thousands of libraries and bookstores.  You have
   to have your IBSN number first.

6) And last but not least write, Rosemary Catoggio, R.R.

   Bowker Company, 205 East 42nd Street, New York, New York
   and request a media kit on getting listed in the
   "Microcomputer Market Place".

No, it doesn't stop here. But for $31.00 plus some, you will be able to reach thousands of potential buyers. You can receive advance sales from these listings and take them to the bank if you need publishing capital. 

/data/webs/external/dokuwiki/data/pages/archive/fun/consult.how.txt · Last modified: 1999/08/01 17:07 (external edit)