Alan Weiss - The Consulting Bible

What it means for consultants: The nonprofit world, bereft of government funds and corporate donations for years compared to historical giving, and hurt badly during the COVID crisis, has managed to survive to the extent it has through volunteers and intelligent management of resources. But tens of thousands of these organizations have disappeared. There will be a growing need to educate board members, staff, and management on how to acquire, train, evaluate, and retain volunteers. A poor volunteer is worse than no volunteer. And the money will be there, through donors, sponsors, patrons, and fund‐raisers.

I didn't say “just‐in‐time,” which invokes a frenzied dash to me. I'm talking about individual professionals and corporate employees having access to a variety of platforms that can generate information immediately, from where a certain movie is playing to the best insurance rates for a newly married 28‐year‐old airline pilot. These will be accessible to both the buyer and the seller. But there can be too much access, so how do you narrow down what you need without winding up on Facebook for 20 hours in a row?

What it means for consultants: The concept of communities will flourish, where people are attracted by the value of (1) the organizer, (2) the other participants, and (3) the environment.

There will be simultaneous need for you to create your own communities as well as advise clients on how to create theirs . A complaint, don't forget, is a sign of interest. It's better to be expressed in the community, as are ideas and suggestions for other communities, which create buying trends.

Let's turn now to setting up your business and getting ready for action. If you already have a business, use these guidelines to validate that you're organized in an optimal manner for your own success.

1 1.See The One Best Way by Robert Kanigel (Viking, 1997) for a fascinating biography of Taylor and his work.

2 2.These were one‐person shops at the outset, solo practitioners, even the legendary James McKinsey.

3 3.As evidence of this, the first management consulting conference was organized in 1888 by the German Post Office. According to records, nobody came.

4 4.Christopher D. McKenna of Johns Hopkins University and Oxford University has written extensively on these governmental factors that promoted independent consulting.

5 5.Edgar Schein is probably the preeminent authority and originator of the term process consulting. See his book Process Consultation Revisited (Prentice‐Hall, 1998) and my book Process Consulting (Jossey‐Bass/Pfeiffer, 2002).

6 6.That number is often claimed as about 400,000 by various sources, but I've never seen an authoritative report or calculation.

7 7.Six of my books have titles using “Million Dollar” because (trust me) a hundred thousand dollars is not what it used to be.

There are three basic options for incorporation or creating a legal business entity. You will occasionally hear from people who will tell you that you don't have to incorporate. Shun them—they are fools. You will, rarely, hear from a lawyer who will tell you that it's not necessary to incorporate.

Call the ethics committee of the bar association!

You incorporate to create a legal entity that can protect your personal assets, form a firewall to protect you, independently borrow money, create certain tax advantages, and enable you to do business with major clients . 1

Always use an attorney and tax advisor who are profoundly well versed in small, professional services firms . Do not use someone who has helped close on your house, done your will, and is related to you in any way closer than seventh cousin, twice removed. (If it's illegal to marry them in your state, you shouldn't use them as advisors.)

Three types of entity:

1 Chapter C. This is the standard corporation in the United States, like Microsoft or United Airlines. I once favored it because there were benefits and tax advantages, but later laws have removed them. Since you have to empty a Chapter C corporation of all cash before year‐end or risk being taxed twice on the same revenue (once in the corporation and once when you take it as salary or bonus), it's no longer the best alternative for solo practitioners or small firms.

2 Subchapter S. In this form, all company revenues flow through your personal tax return. It is neat, simple, and efficient. There is no need to empty accounts, though you should maintain separate business and personal accounts and keep careful records of paper trails. One of my clients was a $1.5 billion, privately held construction company that was a Subchapter S corporation.

3 LLC. Limited liability companies (LLCs) are best for partnerships within a corporate structure, but in some cases a one‐person LLC may be allowed. Owners here are members of the LLC and take shares, which do not have to be equal. It is a very popular and effective form, and is often used when one entity rents or leases to another (e.g., office space).

Your attorney and tax advisor can tell you what your options are for your state, personal objectives, amount of business, and benefits. Make sure that you maximize in your company's bylaws the kinds of deductions that are permitted because you want to pay for everything you legally can with pretax, not after‐tax dolla rs. If you take the risks of entrepreneurialism, you ought to reap the rewards. Making $250,000 as a solo practitioner can be the equivalent of making $350,000 on someone else's payroll and tax structure.

Possible deduction examples:

Noninsured medical expenses

Certain club memberships

Home office

Business equipment

Communications devices

Professional development

Travel accessories

Remote technology

Specialized clothing

Certifications and licenses

Board meetings (which could be you and your partner)

This is a litigious society. That may be unfortunate, but it's true. Failure to protect your intellectual assets is the same as leaving your house unlocked and the newspapers piling up at the door, inviting a robber into an empty home.

Anything original that you write is automatically covered by copyright protection laws. You should, however, indicate that protection with either (but not both) of the following forms:

© Alan Weiss 2021. All rights reserved.

Copyright Alan Weiss 2021. All rights reserved.

You do not have to register copyrights with the federal government. 2 The reason to do so is strictly for lawsuits and trying to collect punitive damages. Without such government notice, you can sue to remove plagiarism and violation of your copyright, but cannot collect punitive damages or damages for any business lost. If you have filed with the government, then you can sue to collect such monies. In 35 years and with tens of millions of words written, I've never filed with the government for further copyright protection. I have successfully shut down a half‐dozen plagiarists.

For certain phrases, models, and materials (extensions of your intellectual property) you can apply for trademark (™) and service mark ( SM) protection. If they stand up to investigation and challenges (for prior use) you will be granted registration (®), which is the highest form of protection. 3

Trademarks and service marks are differentiated by products versus services as a rule. Don't attempt to gain this protection online, even though it appears inexpensive to do so online. Use a good trademark attorney. The cost should be between $600 and $1,500, depending on where you live and the nature of the protection, but the search will be exhaustive and all the paperwork and responses will be correctly handled. From application to registration granted can take nearly a year in some cases, but you can use the trademark and service mark indicators as soon as you apply.