Consulting is undeniably one of the markets experiencing significant growth right now. This is attracting more and more people who want to take advantage of this opportunity. Becoming an independent consultant is therefore a career with a bright future, and there are many benefits to this profession. However, you can’t just jump into being an independent consultant—you need a solid knowledge base, there are steps to take, and so on. If you’re interested in this promising career path, here’s how to get started.
Becoming a freelance consultant: What does it entail?
You don’t just jump into consulting on a whim. You have to be genuinely interested in this profession to decide to pursue it. As an independent consultant, your work is based on providing advice and support. So, above all, you must possess certain qualities specific to this profession. These include, among others:
- Knowing how to communicate effectively to get your message across,
- You must be responsive and curious,
- Knowing how to conduct a thorough analysis of every situation that arises, etc.
- You need to have a solid foundation of training so that your skills are exemplary.
An independent consultant works for themselves and takes on freelance assignments. Companies or other clients therefore hire you for one-time projects. This involves careful consideration and major decisions that affect every aspect of your life.
First, you’ll need to start by assessing the needs of your target clientele and choosing a legal structure accordingly. In fact, every decision you make in this regard will have positive consequences, but also constraints that you’ll need to manage. Give serious thought to what you’re offering in this market. While demand is certainly high, supply continues to grow, as many people today want to become independent consultants. So think carefully about how you’ll make your business viable so that it can thrive in the long term.
Keep in mind that your business involves providing solutions to companies in the form of advice and support. The choice is yours, depending on the business structure you’ve chosen: operating as a consulting firm or as a freelancer. It’s true that it’s fairly easy to get started in this field. In fact, there aren’t many regulations, and you don’t need advanced degrees to do this work. Likewise, you aren’t required to join a professional association related to this sector. However, there are various associations and organizations that aim to bring together professionals in the consulting field. Nevertheless, joining these associations is by no means mandatory.
In what capacity does an independent consultant practice their profession?
You have the option of practicing your profession through a company. This is the case when you work for a firm or through an umbrella company , for example. Alternatively, you can also practice your profession as a self-employed individual. If you decide to set up a sole proprietorship, you’ll create a legal entity to represent your business. This could be a micro-enterprise, a single-member limited liability company (EURL), a limited liability company with limited liability (EIRL), etc. With a company, you’ll have access to specific tax and social security regimes. At this stage, it is advisable to have a legal expert by your side. They will help you choose the legal structure best suited to your situation. They will also assist you in drafting your articles of incorporation and support you in completing the various formalities, particularly those related to the formation and registration of your business.
As an independent consultant, you’ll have to deal with a lot of paperwork related to various formalities concerning your business. These can be legal, tax-related, or administrative in nature. If you’re the type of person who can’t stand this kind of paperwork and red tape, then you should seriously consider an umbrella company as a solution. By doing so, you maintain a status that allows you to be both an employee of the company and a self-employed worker. You retain your freedom while letting the company handle all the administrative aspects of your work. In return, the company will receive a certain commission on your revenue as compensation.
Why Become an Independent Consultant?
As mentioned earlier, you don’t just jump into this line of work on a whim. It requires careful consideration, and depending on the person, becoming an independent consultant may be chosen simply to earn a high income. For some people, the motivation lies in enjoying the freedom to shape their professional lives as they see fit by being self-employed. For others, being their own boss is essential, and so on.
Still others end up choosing to work as freelancers in this field because of the prejudices against them. These are often people over the age of 45, who are considered a bit too old and therefore out of touch for this type of position. So, rather than stagnate, they prefer to step back and start their own business or become independent consultants. In this situation, these individuals are far from being beginners. As a result, they’ve often had time to build a wide network of contacts and establish a solid reputation. They also possess extensive skills and, in some cases, many years of experience. This wealth of expertise makes it the logical next step for this group to strike out on their own and stand on their own two feet in their profession.
What is the appropriate legal structure for an independent consultant?
You can work as an independent consultant under various legal structures. It’s true that the regulations in this area are fairly lenient compared to those for other professions, which explains why there is no mandatory training required to become an independent consultant. However, it is essential that you carefully draft your articles of incorporation to reflect the business activities you intend to carry out. To this end, you can choose from four different legal structures: an umbrella company, an EIRL, an EURL, a micro-enterprise, or an SASU.
Payroll Services
In this three-party contractual relationship, you are referred to as the “porté” employee. Under the portage salarial arrangement, you have a contract with a company and work for the companies that are your clients. This way of working is relatively new and has its own collective bargaining agreement, which allows you to practice your profession with complete freedom. Better yet, you enjoy all the benefits normally granted to an employee. This includes social security coverage, unemployment benefits, paid time off, and more.
The Micro-Business
For many reasons, most independent consultants prefer the “auto-entrepreneur” status. It’s worth noting that, thanks to how this status works, you’ll be able to pay social security contributions based on your revenue. However, there is a certain revenue cap in effect that determines whether or not you can maintain this status.
The EIRL
Limited liability is introduced in the articles of incorporation for a limited liability sole proprietorship (EIRL). This provision in the articles of incorporation offers you the advantage of protecting your personal assets. However, there is also a cap to consider here. Nevertheless, with the EIRL, you have far fewer formalities to complete. This also applies to the cost, which has been reduced.
The SASU or the EURL
Both refer to single-member companies modeled after the simplified joint-stock company (SAS) and the limited liability company (SARL). The difference between the SASU and the EURL mainly concerns the tax rules and social security provisions for the person who will take the reins. The SASU offers flexibility, even though it is still quite complex to set up and manage.
What administrative requirements must be met to become an independent consultant?
The requirements aren’t very strict compared to most other professions. Very often, the administrative formalities for becoming an independent consultant simply involve setting up a legal structure so you can carry out the work. In this regard, it can be one of the business structures we mentioned earlier. Also, as an independent consultant, you don’t need a registered office, as is the case with other professions. You are therefore not required to invest in purchasing or renting a space for your business. You can choose to work from home. Better yet, you can also decide to travel to each client you’re prospecting. However, you’ll still need to register your business address. This can be your home address, your coworking space if you’ve chosen one, or a registered office service.
Aside from establishing a business address, the biggest requirement when it comes to the formalities of becoming an independent consultant is taking out professional liability insurance. This is an important step because this insurance protects you from potential losses related to your consulting work. Similarly, a dispute could arise between you and a client. You’ll also need to enroll in health insurance and join a specific retirement plan to protect yourself. All these formalities must be completed within three months of starting your work as an independent consultant.
As forestablishing your business as a legal entity, you can easily do so online. However, if you’re setting up a sole proprietorship, you’ll need to choose a legal structure. In any case, you’ll also need to draft the articles of incorporation, pay in capital, open a separate bank account, and so on. You’ll need to register your business with the RCS. To do this, you’ll need to submit a complete application to the CFE, the Center for Business Formalities. To confirm that your business has been successfully registered, you’ll receive a K-Bis.
What is the appropriate social security plan for a self-employed consultant?
The social security system that applies will depend on the legal form or status of your consulting firm. For a micro-enterprise, the appropriate social security system is that for self-employed individuals. It is also known as the simplified micro-social security system and is the same as that for independent professionals. When you transition to operating as a corporation, you will be covered by the general social security system for employees. Note that this system does not apply to you if you hold more than 50% of the company’s shares. In that case, you will be a majority shareholder.
What is the variable tax regime for an independent consultant?
You may be subject to income tax on non-business profits or to corporate income tax. If you choose to operate as a corporation, you will be subject to the latter tax regime. However, this does not apply to certain special legal structures. For SASUs, EIRLs, or EURLs, income tax applies. In the case of an umbrella company arrangement, income tax also applies, but only to income generated from consulting services. Additionally, you may be eligible for tax deductions in certain situations involving the micro-BNC tax regime.
How to Succeed as an Independent Consultant
When, after careful consideration, you decide to start a consulting business, in addition to the legal and administrative aspects, there are other factors to take into account.
Find Your True Target
Your knowledge and expertise should be made available to clients who specifically need them. While it’s true that there is high demand in the consulting field, those needs are quite specific. It’s up to you to focus on a well-defined target audience that perfectly aligns with your area of expertise. That’s how you’ll be able to provide your clients with the best possible expertise.
To make things easier for you, you can conduct sales demonstrations designed to highlight your professional skills. To that end, avoid making general statements and consider specializing in a specific field, since consulting encompasses many different areas. For example, you could be a consultant in management, finance, SEO, and so on.
The Best Deal
Finding your place in an already well-established market is never easy. You’ll need to implement strategies to establish yourself and gain market share. However, that doesn’t mean you should offer your services at ridiculously low prices. You risk damaging your reputation and image, since doing so undervalues your skills and expertise. Simply charge a reasonable rate based on the service provided, the uniqueness of your offering, and your overhead costs.
Communication
Everything revolves around communication, since that’s the tool you’ll use to reach out to potential customers. It’s also by having a solid communication strategy that you’ll be able to convince your prospects to become your customers—and perhaps even build their loyalty. Don’t forget, too, that we’re fully in the digital age, and today, everything happens online and on social media.
Use these tools to reach your target audience by increasing your visibility. Aim to improve your visibility in search engines to increase your chances of being found by your target audience. However, while the internet allows you to be visible and attract customers, that alone isn’t enough. A good communication plan relies on multiple factors at once. So don’t limit yourself to the internet. Don’t hesitate to organize professional events, because while the internet helps you attract customers, you also need to build and maintain a network.
Ask for help if you need it
To claim that you can provide advice to clients, you must first be well-versed in the field. You must therefore be an expert in your industry to call yourself an independent consultant. This does not mean that you excel in other areas, such as administrative procedures, for example. To help you, don’t hesitate to reach out to public and private organizations whose job it is to handle these matters.
This is important because, in the event of a dispute, you will run into problems. To that end, you can turn to the Chamber of Trades, the Chamber of Commerce and Industry, business incubators, umbrella companies, etc. Please note that even if you are currently a job seeker and need help getting started, you may be eligible (under certain conditions) to have your unemployment benefits paid alongside your future earnings if you work through an umbrella company.
Becoming a Freelance Consultant: A Summary
No job is easy, and consulting—even though the steps to get started are less complicated—isn’t that simple either. As a result, when faced with reality shortly after launching their business, many independent consultants may become discouraged by the complications that can arise. You’ll need to stay the course through it all to become an excellent independent consultant.
