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.
From CIO to consultant: Top tips for cutting the red tape. And getting your business off on the right foot...

By Mike Barrett

19 April 2007

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.

Join a club

If you are going to spend any time commuting into a major city like I do, you'll have days where there are big gaps between the meetings you've set up. You could spend your downtime drinking coffee in Starbucks and using their wi-fi. But an even better option is the a myriad of clubs that, for a modest fee (between £250 and £500), provide a place you can work and conduct informal meetings any time during the day. It's much more cost-effective than a London office that you'll hardly ever be in.

Most industries have a club that caters for their population. In media the Century Club in Shaftsbury Avenue is the main hub. It's also notoriously difficult to get into with a restricted (and full) membership list. For pretty much all clubs you'll need to get proposed and seconded by existing members but if you've been in any industry for a while that shouldn't be a problem.

The easiest alternative is the Institute of Directors in Pall Mall. As a limited company, you will qualify as a member. They have three or four large meeting areas, restaurant, bar and meeting room facilities (at extra cost) which should cover pretty much all your needs.

Buy quality tools

As a mobile worker, your most important work tool is your laptop so choose it wisely. The biggest dilemma is weighing up the pros and cons of lightweight versus a decent sized screen. Unlike working in an office where you can have a nice, flat screen monitor at both ends of your commute, you are going to spend a lot of time looking at your laptop screen in Starbucks, hotel rooms, the IOD and anywhere you can scrounge a desk for the day.

So while the new Sony TX3XP looks sexy and weighs next to nothing, it has a tiny screen and keyboard that would drive me to distraction in a week. At the other end of the scale the Dell XPS M2010 has all the features of a desktop but is pretty heavy to carry around all day.

I chose the Sony Vaio SZ3XWP/C not because of its easy to remember model number (ha) or the fact James Bond used it in Casino Royale. I chose it because it's relatively light (1.69kg), has a 13.3-inch screen, three-hour battery life and a proper, full size keyboard.

Read. A lot.

There are a million books out there on starting your own business - some are good, some bad, some too American, some plain out of date. Here are my recommendations for the five best books for the budding consultant:

* The Art of the Start - the classic start-up guide

* The Beermat Entrepreneur - simple, solid advice

* Getting Started in Consulting - very American but vital advice on how to charge

* How to Succeed as an Independent Consultant - a more English version of the above

* The Art of Project Management - it's an art as well as a science

These five books will give you loads of hints and tips about how to get off on the right foot. Why learn everything for yourself by trial and error when you can kick-start the process by learning from other people's mistakes?

Of course these books have their shortcomings - even the most recent was published in 2005. In my next column I'll explain how a new generation of online tools can help you project a high-quality image with minimal outlay.

And don't miss my previous columns about my first month as a consultant and why I left my day job in the first place.

Mike Barrett was until recently COO for CNET Networks UK, the publisher of and other online publications. He now consults on strategy and development for the online publishing industry and assists tech start-ups in building products for the web 2.0 world. You can read his blog at .