10 Steps & $600

How to Start a Small Business as a Marginalized Independent Consultant

Before I even begin, I have to start by saying I am no expert on starting a small business. Just 8 months ago, I started my consulting firm, Shobana Powell Consulting, where we provide training and technical assistance to nonprofits and government agencies on the intersection of human trafficking and systemic oppression.

Since doing so, many marginalized folks and survivors have reached out to share that they wanted to start their own thing, but have no idea where to start and how/if they can if they do not have the financial capital, privilege, or access others have. I am still learning as I go- mostly thanks to the advice from other women who have empowered me- but I hope this article provides some clear, affordable options for starting your own small business. Remember, you can do it, and you are not alone.

I want to emphasize that for marginalized individuals (BIPOC, LGBTQ+ folks, women, persons with disabilities, immigrants, survivors of violence, etc.) who are starting small businesses, there are additional systemic barriers. Although there will never be enough resources to counteract institutional oppression, there are at least some options out there to help, including grants, fellowships, and networking groups. To learn more about organizations specializing in this area, please this resource list I put together: National Resource List: Business Advice for Marginalized Entrepreneurs and/or Survivor Leaders.

Please note, this article does not cover options for public benefits nor options for those with barriers due to immigration status. For more on public benefits, see here for a tip sheet from Vera Institute of Justice on Compensation Considerations for Individuals Receiving Government Benefits. For more on immigration, see here for A Guide to Working for Yourself from Immigrants Rising.

Please see below for an overview of the costs for the basics of starting a small independent consulting business, followed by the steps to get there. I also provide some notes on safety and level of comfort, especially for those who are survivors of gender-based violence (i.e. domestic violence, human trafficking, sexual assault, etc.). This list is not exhaustive, but I hope it gives you a place to start. See here for a more detailed Business Guide from the US Small Business Administration.

10 Basic Annual Costs of Independent Consulting

Links: DBA, LLC, Square Space, QuickBooks, TurboTax, Google Workspace, Asana, Doodle Poll, Calendly, Medium

10 Steps to Starting Your Small Business as an Independent Consultant

1. Prepare Yourself

Believe in Yourself: This may sound like a strange place to start, but creating your own business is a huge milestone, and no matter who you are, it takes believing in yourself. If you are a marginalized individual, institutional and systemic oppression will make your journey more challenging. But you deserve to pursue your dreams and take up more space in the world.

Regardless of your history, you will likely experience challenges with self-doubt that you may not have even realized you have. Starting your own business is often a very personal journey. You may want to consider getting into therapy, if you are not already, as well as building a robust, holistic self-care plan to ensure you have the support you deserve.

You may also want to consider engaging in an existing support network for entrepreneurs in your field. Alternatively, you might want to start your own formal or informal small network by connecting with people in your community who believe in you and who you can go to for support and/or advice when you need it. For some, social media may even provide a virtual community of entrepreneurs and/or marginalized individuals who can empathize with your barriers, celebrate your successes, and encourage you in your journey.

Tap into Community: Begin networking by setting up meetings with folks who have done similar work. You will be surprised how willing the right people are to meet with you, encourage you, and share lessons they have learned from their experiences. It is great if you know exactly what you want to do, but it is also okay if you are still figuring it out- just let them know where you are in your process. When you meet with folks, let them know you want to learn from them, be clear with how long you want to meet with them (15, 20, or 30 minute meetings are ideal), and respect their time by ending the call/Zoom when the allotted time ends.

See if you can find someone who might serve as your mentor, meeting with you monthly or quarterly to give you advice along the way. This might not happen right away, and that is okay. Don’t let it stop you from getting started, but put in the work and effort to cultivate relationships because finding a mentor can really help you in your journey.

Most importantly, never forget to express your gratitude for those who empower you, and hopefully one day, you can do the same for someone else.

2. Name What You Do

Company Name: Decide on your company name. What is the industry standard for naming your type of company? Will your company name include your personal name? Will it be your legal name? If so, is that safe/comfortable for you? If not your name, what other word/company name fits for you? What do you want to convey with your company’s name? See here for more on Choosing Your Business Name.

Type of Services You Offer: Consider what type of consulting services you plan to offer. Narrow down to a key expertise within your field that addresses an unmet need of your target client agencies. You can ask those in your community/field what it is you are known for and/or what makes you and your work unique.

Consider writing down your company mission, vision, values, strategic plan, and maybe even a quick SWOT (Strengths, Weakness, Opportunities, Threats) analysis. This part is not required, but it will help you hone in on your goals and plan for the future. If these “businessy” words intimidate you- especially if you are someone who does not have the same educational or professional access others have- remember you can do this. There are so many entrepreneurs who have succeeded without a formal background. Strategic planning is at the very basic level, just writing down a few things on a piece of paper or a Google doc. You’ve made it this far; it’s worth giving it a try and believing in yourself. Sometimes fancy terms can make us feel alienated or like we don’t belong, but oftentimes, it’s a simple one-page document anyone could complete. When it comes to strategic planning, I recommend using some free basic templates online, and you’ll impress yourself with what you create.

Remember, it is the very real history of oppression that we have experienced that makes us feel like we can’t do what those with more privilege are doing, and that is not to be minimized. You are not weak if you struggle to believe in yourself, but I do hope that through your personal and professional journey you can begin to see all that you are capable of.

Your Title: Are you the CEO? Founder? Executive Director? Owner? Consultant? A combination or something else entirely? Consider what will convey the messaging you desire and/or what is industry standard. Your title may also depend on the entity type you choose.

Elevator Pitch: Write down and practice an “Elevator Pitch”. An Elevator Pitch is a term referring to what you would say if you met an amazing potential client in an elevator and had only that elevator ride (around 30 seconds) to tell them about what you do. Hopefully, they leave feeling interested to learn more. This will help you when you introduce yourself in new spaces and when you pitch your work to potential clients. I recommend reading articles and watching free videos on how to write an Elevator Pitch and then practicing with trusted loved ones or colleagues.

3. Register Your Business

Type of Business Entity/License: When deciding how to incorporate your business, you might want to connect with a resource that helps people start small businesses (see National Resource List), ask a colleague who has experience starting a business, and/or research the differences between all options. Your business might remain as a sole proprietorship without submitting any paperwork to formalize, you might choose to remain a sole proprietorship but create a DBA (Doing Business As), or you might choose to go another route such as a Limited Liability Corporation (LLC) or an S Corporation (S Corp) or another option entirely. (See here for more on Choosing a Business Structure, DBA vs. LLC and LLC vs. S Corp). When deciding which is best for you, you may want to consider:

1. What is the best fit for your type of consulting work?
2. Are you planning to work independently or will you hire others in the future? If you hire others, will they be subcontractors and/or employees?
3. Which option best protects you legally and financially?
4. Is there any reason your target clients would not contract with you depending on the type of business entity you have? (For example, some agencies prefer to contract with LLCs over sole proprietors or DBAs.)
5. How might each option impact your taxes?
6. Can you change to another option later, if needed?
7. What state are you going to file your paperwork in, and what is the cost to file paperwork in that state?
8. What address are you going to use for your company? Is your home address a safe option? Or should you pay for a physical PO box through somewhere like UPS or virtual mailbox through any number of services that offer to receive your mail at an address unique to you and email it to you? For more on choosing your business location, see here.

If you know an attorney who can help answer these questions, even better! Do not be afraid to ask your colleagues and community if they know of an attorney who can help you make the right choice for you that you can feel confident in.

Formalizing/Incorporating/Registering: “Formalizing” your business is not as complicated as it sounds. Once you do the research and decide on the right type of entity for you, you can use Google to look up how to submit paperwork in your state/county to register your business and what the cost is. Some choose to hire an attorney to help them file their paperwork, others utilize resources in their community that help entrepreneurs incorporate, while others file on their own. Depending on the business entity you choose to establish, you may not need to register at all. See here for more on Registering Your Business.

In my case, I started with filing for a DBA in my county for $85, and I received approval about 4 weeks after I submitted the one-page paperwork (which required basic information like my name, address, social security number, company name, etc.). That process is very specific to my county and state, so I recommend you research what your options are. In the US, it costs an average of $10 to 100 to file a DBA, varying by state or county and an average of $50–100 to file an LLC, varying by state. See here for the cost by state for filing and maintaining an LLC.

Additional Steps: Depending on the type of business entity you select for your small business, you may have additional steps such as forming a board of directors, getting insurance, or applying for licenses or permits. Research what is required for your situation, and consult with an attorney or another expert if possible.

Depending on the type of business entity you establish, you may need to get federal and state tax ID numbers. For a sole proprietorship, you may choose to use your personal social security number as your federal tax ID, rather than creating a separate Employer Identification Number (EIN). If you do not have a social security number (SSN), you can use your Individual Taxpayer Identification Number (ITIN) to start your business. (For more specifics regarding immigration status, see here for A Guide to Working for Yourself from Immigrants Rising.)

4. Set Up Your Finances

Bank Account: Consider whether you want to set up a separate bank account for your company. If you already have a personal bank account, you can go to your local branch and let them know you are starting a business and need to open a business account. Many experienced entrepreneurs recommend opening a business checking account that is separate from your personal account.

Accounting: Decide how you plan to keep track of your income, expenses, and taxes. You may want to use an affordable platform like Quickbooks, or you may want to hire an accountant and/or tax expert. Quickbooks costs about $14/month, and there is an option for it to generate the 1099 tax forms you are expected to submit. Some folks keep track using their own spreadsheets; however, many say that the more your company grows, the harder spreadsheets will be to maintain.

Taxes: As an independent consultant, depending on how your company is set up, you will likely need to pay taxes as a self-employed individual. You will likely pay taxes on your income either quarterly or at tax season. As each case is different, it is generally recommended you set aside about 30% of every paycheck just to cover taxes. You should also consider setting aside an additional amount for business expenses. If you are doing your self-employed taxes yourself, it costs about $120 on sites like TurboTax or H&R Block.

In terms of your “paper-trail” or documentation to keep throughout the year, whether you do your accounting through Quickbooks or spreadsheets or another avenue, be sure to keep track of everything. Keep track of all projects you work on, invoices you submit, payments you receive, and receipts from purchases you make for the business. Keep track of all expenses, including rent, utilities, supplies, travel, etc. that are related to your business, as you can write those off on your taxes. See here for more on IRS Home Office Deductions.

In terms of paperwork for taxes, see here for the IRS Self-Employed Individuals Tax Center. If you are self-employed, you will typically need to submit a W9 Form to each client with whom you work when you begin working with them. Where the W9 Form asks for your Taxpayer Identification Number (TIN), you will see the option to list either your personal Social Security Number of your Employer Identification Number.

In addition to W9 Forms to your clients, you will typically also need to file a 1099 Form to the IRS for yourself.

*If you pay any independent contractors (other than yourself) $600 or more in a year, you must also submit a 1099-NEC or 1099-MISC. If you are hiring or paying other independent contractors, you will typically ask them to send you a completed W9 Form for your records. You will also want to consider whether you are hiring folks as an Employees vs. Contractors, as that will impact how your business handles taxes for that worker.

Please note, the paperwork you must file for taxes will depend on what form of business entity you establish. The amount you pay in taxes will also vary state-by-state. For more on tax requirements based on your business structure, see here.

5. Design Your Branding

Color Scheme: Consider what color scheme best fits your company. You can find free color palettes through a simple Google search or through searching on Pinterest. You may want to consider the meaning of different colors in various industries. You can also look up the research on what responses people have to different colors in a company’s logo and/or branding.

Logo: Create a logo for your company. I used a free site called Canva to create mine myself. I recommend upgrading to the paid premium membership for $120/year if you do graphic design for any aspects of your consulting projects or social media presence. You can also pay a graphic designer or artist to develop one for you. Some folks use freelancing website/apps like Fiverr to find the right person and price for them. Consider what values, emotions, and messages you want your logo to reflect.

Font: At this time, you can also consider a few key fonts you want to use for your company so your branding is consistent. You can Google what font combinations looks best together so you have a few you utilize for your company. Your color scheme, logo, and fonts should all work together.

Swag: If you have the ability, you may want to purchase some company swag for yourself and/or for marketing. When you make it this far in your journey, sometimes buying yourself even just a sticker or T-shirt or mug can be a little reward. It can be a reminder of your hard work thus far and your vision for the future. I get my stickers from StickerMule when they were having sales for $29 for 50 stickers. For custom clothing, I recommend supporting local small businesses that do embroidery or custom printing. You can also order custom clothing online through places like Zazzle or Promotique by Vista Print, or you can purchase iron-on paper and print them yourself at home or at a local printing shop like Staples or Kinkos.

6. Formalize Your Communication

Company Email Address: I recommend creating an email address for your consulting work. When you use Square Space to build your website, they provide you with one email address included in your annual membership, and you can tie it to Gmail/Google Workspace if you use that platform. Otherwise, you can create a free Gmail account, or there are many other options for free email accounts. Not only does having a professional email help build your credibility, it also helps protect your privacy and safety by not sharing your personal email address publicly. It also allows you to set boundaries around when you are checking work emails vs. personal emails- remember, even entrepreneurs need rest and time off! Consider whether having your name in your professional email address is safe and comfortable for you, as it will likely be shared widely.

Company Phone Number: I recommend creating a professional phone number that is separate from your personal number. You can use a free app like Google Voice to create your own number and choose the area code. This way you can set boundaries around when you answer your work calls/texts and/or listen to voicemails. This allows allows you to protect the privacy and safety of your personal phone number.

(Disclaimer: Please note, depending on the type of work you do, you may be required to use more secure email and/or phone services to ensure client confidentiality.)

Signature Block: Create a professional signature block that will automatically show up at the end of every email you write. Ideally, your signature block will list your name, your title, your email address, your website, and any social media pages you would like to include. You can create your own signature block or use a free website like Wise Stamp. Using a professional-looking signature block helps potential clients and connections see that you are a formal business entity and can help build credibility and trust, similar to your website.

Business Cards: Depending on the type of work you do (especially if it is all virtual), you may not need business cards. They are not essential to running a business, but they can serve as a great marketing tool if you are meeting people in person and attending networking events/conferences. I used the free version of the website Canva to develop mine and paid about $20 for 100 business cards.

7. Develop Your Website

Create Your Website: I created and maintain my website myself using Square Space. It cost $216 for an annual membership. Many sites have pre-existing templates that make designing your website fairly easy- although it does take time. I am by no means a graphic designer, so developing my website took me many hours. However, it was well worth it, and for me, it was a fun, user-friendly learning experience.

For those who do not wish to create their website themselves, they might use freelancers through Fiverr or other websites/apps to create their websites for them. Remember, it does not need to be perfect or complete. You can always start with a powerful opening page and continue to work on your website as your company grows.

Consider Safety: Consider whether using your real name and/or photo is safe or comfortable for you. Remember, you can successfully do consulting work without putting your face out there. What is most important is what feels right for you.

8. Organize Your Work

Creating Documents: You can use Google Workspace for free, which offers free use of Google Docs to write documents, Google Sheets to create spreadsheets, Google Presentation to create slide decks, Google Form to create forms/surveys, and Google Drawing to create visuals. You can share Google documents with colleagues with options for them to be able to view, edit, or comment, as needed. For those like me who are not naturally tech savvy, there are some excellent free online tutorials on using Google Workspace. There are also many other online platforms for creating and sharing documents.

Saving Documents: Consider using a platform to save all your work in one place, such as Drop Box or Google Workspace. Both options are free, with the ability for paid upgrades depending on how much storage space you need. I always recommend backing up your work and saving it in another place, just to be safe.

Organizing Documents: For me, organizing my documents is key to my small business’s sustainability as well as my own sense of peace. I keep all my documents and spreadsheets organized in virtual folders so I can easily find anything I need. The more I organize my work, the less likely I am to feel overwhelmed as my company grows and I get more and more work. I feel in control and able to make informed decisions and set boundaries around what I can take on and what I cannot. Remember, for those who have experienced trauma, chaos is what is known and familiar, but structure and organization- when trauma-informed- can bring peace.

Branding Documents: Consider creating a template or “letterhead” for your company that includes your logo and has your fonts saved. This will save you time and will help your documentation look professional. Any documents you send externally should include your logo, if possible.

Time/Project Management: Consider using a project management tool like Trello or Asana which are free. I use Asana to keep track of all my projects, tasks, and deadlines for myself and my team.

Calendar: Consider using free options like Google Calendar (available through Google Workspace and easily connected to your Gmail account) to manage your calendar. Block out time not only for meetings, but for all the various types of work you do, including strategic planning and networking.

Scheduling Appointments: Consider using free websites like Calendly or Doodle Poll to book appointments/meetings with others. I live in a different time zone than many of my clients, so Doodle Poll is very useful in coordinating meetings, as it translates the time zones for you.

Documenting Your Time: Write down what you do each day. You may want to do so in a spreadsheet, your calendar, or whatever makes sense for you. Starting a business requires a combination of doing a great deal of work and feeling like you have no idea what it is you do all day. Writing it down will help ground you and remind you that building something requires all of the steps you are taking, including checking emails, testing new websites/apps/platforms to help streamline your work, and researching/Googling questions you do not have the answer to- only to end up with more questions.

9. Decide Your Compensation Structure

Setting Your Rates: Setting your rates can be a very challenging process as a consultant. Speak with your colleagues and learn what is a competitive rate in your field. Do not sell yourself short. Even if you do not have the same level of education or experience as others, remind yourself what makes you unique and why someone would benefit from working with you.

As a consultant, you are not receiving benefits like someone who is an employee. Therefore, when setting your rates, you should not only consider your time, but also your benefits, your business expenses, and your taxes. If you feel bad or guilty or unworthy for charging an amount that seems fair, write down all the work you do and expenses you have. Do not just think it in your head- write it down, just for you. Reference that document whenever you doubt yourself and your rates.

Do not forget to consider how you want to set your rates- do you want to be paid hourly, at a flat project rate, on retainer (usually a monthly fee), or is there another option that fits you best? Research your options and find out what is most common in your field. You may find over time that one method works better for you than another or that it depends on the type of project. The beauty of running your own consulting business is that you can learn and adapt along the way.

Contracts: Some client agencies you work with will have their own contract template that they use. Other times, you may need to type up a contract yourself. It is not as intimidating as it sounds! Depending on your field, a contract can be a simple one-page document. Look around online for free contract templates or ask your colleagues/community for an example of one in your field so you can make your own template to use for your company.

I always have a contract for every project I do, so as to protect myself and my client and to ensure we have clear expectations. A contract may outline items including but not limited to: the name of the client agency, independent contractor (your business) name, scope of work/activities/deliverables, timeframe, compensation, expectations for invoicing, intellectual property rights and/or confidentiality, guidelines for amendments/termination of contract, and a signature and date from both parties.

You might consider using a platform like DocuSign for $10/month so you can use electronic signatures with your clients on up to 5 documents per month. Some contracts may require handwritten signatures, in which case you will need to print and mail your documents.

Invoicing: Consider what documentation you need in order to charge your clients and keep adequate documentation for tax and accounting purposes. You may need to submit paper or electronic invoices. If that is the case, you can use a free template online and tailor it to reflect your company’s name, address, and logo. Decide the frequency with which you will send invoices to your clients, which may depend on the projects. Some contracts will include monthly invoicing and payments while others may state you will be paid upon submission of deliverables/products. Some projects may require detailed timesheets in addition to invoices.

Method of Payment: Consider how you want to receive payment for your consulting services. You can accept checks that are mailed to an address of your choosing, you can set up your website so that you can take credit cards online, you can be paid via apps like Venmo, Zelle, or Cash App, or there are many other options. Consider which methods of payment work best for your clients. You can also be clear what your preferred payment method is.

Be sure to communicate clearly in your invoices the date you submit an invoice versus when you expect to be paid. Set a notification for yourself to follow up if you do not receive payment by that date. This will all depend on the project. For some clients, they can pay within two weeks. Others may take a month. For those who do government contracting work, it may take months to be paid. Keep track of everything in a spreadsheet, Google Sheets, QuickBooks, or whatever platform you use so you can follow up with the client if needed. Remember, sometimes it might be a clerical error or a miscommunication, so it never hurts to follow up and just ask!

10. Invest Time in Marketing & Networking

Group Networking: Join networks, groups, and coalitions in your field or where you know your potential clients will be. Don’t just join, but be an active participant in areas where you are passionate. They will see you in action and will either reach out with potential work or connect you to others. Many consultants get their contracts through word of mouth.

Individual Networking: Set up 15–30 minute meet and greet calls with potential clients and/or those who have connections to potential clients. Asking for these calls and having them does not have to be scary! You just let them know you are and that you want to learn more about what they do. You share who you are, hear who they are (hopefully you Googled their work beforehand so you have some context), and you just end the conversation by saying, “It was so great to meet you and learn about what you do. I will definitely keep an eye out if I see anything that fits your expertise, and please keep me in mind if you see anything that might fit for me.” Remember to respect their time by ending the conversation when you said you would and scheduling them for times when you can give them your full, undivided attention.

Public Speaking: The more you do public speaking events, webinars, or conferences, the more you get your name out there. Many of these opportunities will pay you for your time, but if you choose to present pro-bono, be sure to document your time and decide in advance how much of your work will be pro-bono. If you do choose to do pro-bono work, make sure you get documentation from the organization you donated where you donated your time, as that is also something you can write off on your taxes. It is helpful to consider how the event matches with your values, as well as whether it will help you with marketing.

Social Media: Social media may not be safe or comfortable for everyone. Before setting up your professional social media presence, consider what feels best for you, whether it be considering what name to use, whether to use photos of yourself/loved ones/colleagues, whether to make your pages public or private (some platforms may not allow a private option), and whether or not you want to see/respond to comments. It can also be helpful to create a safety plan for what your concerns are, including pre-scripting a response for negative social media interactions. If social media does feels safe and comfortable for you, here are some options for building your online presence:

1. LinkedIn: If you do not have a LinkedIn, it is very easy to set up. Your LinkedIn profile is more or less your virtual professional resume. I recommend looking up a free webinar on the basics of LinkedIn, especially if you do not have experience creating a resume.
2. Instagram/Facebook/Twitter: You may want to consider starting a professional pages, separate from your personal pages (if you have them). Keeping them separate allows you to set boundaries around not only your content, but also your usage of the platforms. If we have healthy boundaries, when we are off works hours, we shouldn’t be checking our work social media. If you use Instagram, I recommend also using Linktree, a free platform that allows you to link multiple websites to your Instagram page instead of being limited to one. This works great for folks who want to keep their consulting website up, but also want to easily direct users to registration links or articles.
3. YouTube: Some entrepreneurs use platforms like YouTube to share videos that share their expertise, personality, or useful resources for their target audience.
4. Hashtags: Hashtags are how your page can be found by people who do not follow you. Use hashtags that will reach your target audience. You can search Google to see what are the most popular hashtags in your field of expertise, or you can learn by seeing what hashtags others use.
5. Writing Articles: Consider writing articles for news outlets, magazines, or blogs or consider starting your own blog. I started publishing my articles for free on Medium. This is a great way to establish yourself as a thought leader in your area of expertise, and a great way for folks to get a feel for who you are and the kind of work you do. Write articles about the topics you consult on or would like to consult on.

Next Steps

There are many more ways you can start and/or grow your small independent consulting business. I hope these few “lessons learned” thus far give you a place to start.

For next steps, I recommend to continue researching, to attend free webinars on entrepreneurship and financial literacy, and to write down your plan for this year and the next five years if you can. If you’re visual like me, maybe you start with a vision board to ground yourself in your goals and dreams for your future.

Most importantly, believe in yourself and surround yourself with those who see and believe in you. And remember, you deserve to take up more space in the world.

For more resources and upcoming trainings on self-employment for marginalized and survivor entrepreneurs, follow me on Instagram at @drshobanapowell.