Share Answer — Clarity

the startups.com platform about startups.comCheck out the new Startups.com - A Comprehensive Startup University

Categories

Browse Search

Loading...

Question

Currently, I'm an independent contractor that provides consulting services to third-party companies and help them manage projects with large budgets. I am looking to transition into a full-service consulting business where my company will internally take on the large project budgets as those that I consult for, essentially growing from an individual salary to processing the entire project budget overnight. How should I prepare to navigate the gap to set up my company team/finances to properly handle the accounting and cash flow of these projects when most end-clients deal on net 30 or 60 terms. The lifespan of the project is 8-10 months and cannot float the millions required in the interim. I want to tell my client I can take on the entire project, but not sure how to plan for this.

Money Management

Corporate Finance

Answer

David Favor answered

I'd likely start by doing competitive analysis + finding your competitors.

Then pitch your competitors to partner with them.

BTW, Net 30-60 is crazy, to me. In fact, Net anything is crazy.

Our agency starts with a $1000 retainer + then we bill weekly. If any client slow pays, they go on 100% retainer basis.

Anyone how has to pay on Net... geez... I won't take. There are just to many people who fast pay.

If you go long Net terms + company dies or sells or loses interest in paying, your out your money.

I just won't even consider a client who required long Net pays.

Net on Monday for last 7 days work is how I go.

Most people pay monthly or weekly base cost + overages which add hours outside their plans.