Setting up your own consulting firm

You want to start your own business as a consultant or advisor. What permits, taxes and other entrepreneurial matters will you have to deal with? In this article you can read what you need to arrange if you start as a consultant.

The Netherlands has over 122,000 KVK registered consultants. Every month there are over 2,000 new ones.  If you start as a consultant, you have to deal with the following issues:

Registration at KVK

If you, a self-employed professional,  start as a consultant or advisor, you will probably have to register with KVK. You become an entrepreneur and must choose a legal structure; the legal form of your business. Most consultants choose the legal struccture of sole proprietorship when starting their business. You are then the only one responsible and liable for the company. You can always change a legal form. At a later time, for example, you can decide to change to a private limited company (bv).

Employment Relationships Deregulation Act (Wet DBA)

Suppose you have only one client for whom you do a long-term consultancy job. Does that make you an entrepreneur? You can find out with this check (in Dutch) from the Netherlands Tax Administration. If you do not meet the conditions for entrepreneurship, you are actually employed. We call this false self-employment.

If you are sure you are not a false self-employed person, you can record your relationship with your client in a model agreement (in Dutch). This way, you show the Netherlands Tax Administration that you are not employed. You can find model agreements for various situations and sectors on the website of the Netherlands Tax Administration. You can also draw up a model agreement yourself. But you must first submit it to the Netherlands Tax Administration for assessment. 

Training and permits

For most consultants, there are no training requirements. Experience and knowledge are often enough for clients to hire you as a consultant. Sector organisations (in Dutch), however, may require you to have a completed education if you want to join them.

Financial advisor

Do you make recommendations to clients on financial products, such as pension insurance and mortgages? Then you do need an education. Moreover, a licence from the Financial Markets Authority is mandatory.

Location

Many consultants and advisers start from home. If you want to do the same, check the conditions with the municipality before you get started. If your plans fit within the environment plan, a notification that you are starting a business from home is usually sufficient. Do you want to renovate or advertise on your facade? Then apply for an environment and planning permit.

You can also rent business space for your own consultancy firm. This is possible in a multi-tenant business building, among other places.

Take yourself seriously: you run a business, not a project or hobby.

Finding clients

How do you convince people to become clients? Your own network can play an important role in bringing in the first orders. But there are more ways to find clients. To determine how to bring your service to the attention of your target group, it helps to make a marketing plan. Patries Baijer of Baijer Mediation is an independent consultant. She stresses the importance of choosing a target group: ‘You cannot have everyone as a client. Consider for whom you can add value. If there is a target group that does not suit you, send it to your competitors. See competitors as colleagues. You can learn from each other and maybe even work together.’

Even if your assignments initially come from your own network, it is smart to work on your online findability. You can use various social media channels for this, for example. Regularly show what you are working on or respond to current topics. ‘Use social media that suit you and your target group. From a business perspective, this is mainly LinkedIn. To reach private individuals, Instagram, for instance, is more suitable.’ And very important according to Baijer: ‘Call your work a business right away. Never use the term project or hobby (or bedrijfje, a ‘little company’ in Dutch). Take yourself seriously.’

Non-disclosure

As a consultant, you do not have professional confidentiality or secrecy by law, like a doctor, psychologist, or lawyer. But usually, you do discuss confidential matters with your clients. You can make agreements in the assignment confirmation about how you handle confidential information. Or record agreements in a nondisclosure agreement (NDA).

Risks

It is important to insure yourself against risks you may face as an entrepreneur. Before you start, assess the business risks you face and how you can limit them with insurance or general terms and conditions.

Professional indemnity insurance is mandatory for certain professions. For example, if, as an architect, you have made a wrong calculation. It may also happen that a client requires you to take out insurance before you can do a job.

For possible damage to people or client property, business liability insurance is useful. Think of a cup of coffee you accidentally knock over your client's laptop.

KVK Insurance Check

While some insurance policies are compulsory, others are simply practical and convenient. Which ones do you need? The KVK Insurance Check helps you choose your insurances.