Set Up Your Business
Create a plan
Create a plan that determines what type or range of consulting services you will provide.
Choose a business structure
Choose a business structure. LLCs, Corporations, and Limited Partnerships must register their structure with CA Secretary of State before registering locally.
Apply for an Employer Identification Number (EIN)
Apply for an Employer Identification Number (EIN), also known as a Federal Tax ID Number from the IRS. This is used to identify your business and allows you to hire employees. If you are a sole proprietor, you may be able to use your Social Security Number instead.
Register your business
Register your business with the City through the Office of the Treasurer and Tax Collector (TTX).
Note
You may choose to obtain a separate business address, or you may use your personal address for your registration.
Choose and file a business name
File a Fictitious Business Name (FBN) Statement at the Office of the County Clerk if you will be using a name other than your given name, the names of your partners, or the officially registered name of your LLC or corporation. Research the name’s availability in your county before filing.
Professional Requirements
Professional credentials
Obtain the necessary credentials if the services you provide requires a license (eg. attorney, certified personal accountant (CPA), financial advisor, etc). You can find most regulatory information through the CA Department of Consumer Affairs.
Bonds
Determine if you need to bond your work in advance. A bond (sometimes referred to as a surety bond) is a third party obligation promising to pay if a vendor does not fulfill its valid obligations under a contract. Essentially, it is a financial guarantee that you will honor a business contract.
Location
Determine where and how you want to conduct day-to-day operations. There are three main options for choosing a consulting business location: Home Based Business, Commercial Location, and Co-working Spaces.
Note
Key things to know about a home office: (1) Clients cannot come to your home; (2) Employees cannot work out of your home, unless they also live there; (3) You can’t display advertising; (4) You can’t use more than 25% of the space for commercial purposes. Review the SF Planning Department's Guide to Home Offices for more information.
Note
Beware that operating a home based business could violate your lease or Homeowners Association (HOA) charter.
After Opening
Solicit work
There are a number of ways to seek out work, including using the web, word-of-mouth, advertising, partnerships, etc.
Negotiate compensation
Negotiate compensation & payment plan prior to signing a contract. Consider taking a class or seeking other advice on contracts.
Pay your taxes
Prepare and pay your local, state, and federal taxes. Learn more from the SF Treasurer, SF Assessor, CA Franchise Tax Board, and the IRS.
Note
Depending on the legal form of your business, you may be required to pay the federal self-employment tax, among other taxes. Review the Forms and Associated Taxes for Independent Contractors.