Can somebody tell me how much risk involved in having your own company and doing software consultancy job?

Question

I have pretty good experience in software programming. Apart from my full time job I would like to open up my own company and do consultancy job in my free time. But before doing so I want to know how much risk involved, how do I open (register) a company, what kind of tax do I need to pay for having a company and any other things to be concerned.

Answer 1

When you have your own business, the risk is within yourself. You have to be able to get clients. It is a good idea that you want to start out in your spare time. You will need to pay estimated income tax quarterly, and you also need to pay your own social security. Look for a Nolo Press book called "Working for Yourself" on starting your own business. It puts the law into plain English, and it's the one I learned everything from. I have my own business and I do my taxes with Turbo Tax. It works it all out for me. Go to your City Hall and find out how if you need a business license. That's what I did, and they told me everything else I needed to do, such as DBA.

Answer 2

The most important thing to consider is, you may be very good at programming, but how good are you at selling? Do you have customers lining up already? If not, what's going to change once you start your consulting practice?

In your case, there's not a lot of risk, since you probably have everything you need for your consulting practice and no additional investment is required. The worst thing that can happen to you in this situation is that you would be unable to find paying customers.

You don't have to register a company if you don't want to. You can do business under your own name (working as an independent contractor to your customers) or make up a company name (in which case it would be a sole proprietorship). If you want to form a corporation or an LLC, there will be annual franchise tax (depending on the state you are in, anywhere between $80 and $800), plus, for a corporation, corporate income tax (if you in fact have income).

Answer 3

not bad at all. I suggest just not at a religious gathering or to your great- great grandmother. You'd really have to be a stick in the mud not to enjoy that