| Are you an entrepreneur but don't like | | | | on that project. |
| selling alone? A consortium is a combination | | | | |
| of different industry-types of entrepreneurs | | | | |
| working together to attract business as a | | | | |
| group. Even though each member maintains | | | | Okay, that is fairly straightforward. |
| their individuality and operates as the same | | | | |
| as self-employed. | | | | |
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| | | | After the client receives their contractual |
| | | | services by the member, the member then bills |
| They band to create a more valuable package | | | | their time to the consortium in "units" not |
| to fulfill bigger needs for clients and for | | | | dollars. Units work better than dollars |
| increased visibility and credibility. | | | | because they equalize the various billing |
| | | | rates of the members. For example: a CPA |
| | | | may bill four units per hour, a writer three, |
| | | | and a virtual assistant one. The consortium |
| The positive side to being part of a | | | | keeps track of everyone's units and pay |
| consortium is that you can work on larger | | | | members on a regular basis as set up in the |
| projects. Larger than any single | | | | consortium's charter. |
| entrepreneur can accomplish alone. Together | | | | |
| they can enter into contracts that require | | | | |
| multiple skills and still maintain the | | | | |
| freedom of their entrepreneur-hood they so | | | | When the consortium is properly |
| desire. They gain being part of a team and | | | | tax-structured, the revenue and expenses can |
| organization while still keeping your | | | | balance themselves out. It is important to |
| independence. | | | | see a tax professional for details on |
| | | | structuring a consortium for tax efficiency. |
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| A consortium can provide the security of core | | | | |
| revenue that helps them breath, not chase | | | | A challenge when starting a consortium is to |
| prospects as hard, and usually take care of | | | | make sure that when looking for members, |
| regular living expenses. It is also a great | | | | prospects do not mistake the first meeting as |
| way to transition from employee to | | | | a new networking group starting up. People |
| self-employment. The transition allows the | | | | confuse the two and show up. This will give |
| learning and growth at a slower steadier | | | | the organizers a misrepresentation of the |
| rate. Each member learns from other group | | | | "real" number of interested parties. |
| members by sharing their success and mishaps. | | | | |
| This way the risk factor of being | | | | |
| self-employed is less. | | | | |
| | | | Joining a consortium is not a short-term |
| | | | project. It is important to know that |
| | | | joining or starting a consortium is |
| The consortium can also band products to | | | | long-term. There is the initial investment |
| create higher priced, more valuably | | | | of time and money from all members. The |
| perceived, packages. Larger packages are | | | | startup phrase doesn't occur in one meeting. |
| easier to sell. A group package of various | | | | An agreement on many items needs addressing. |
| authors is more attractive to buyers. | | | | Some established consortiums require a |
| Everything that the buyer needs is then | | | | minimum of three years, however, many |
| packaged and available with one purchase. | | | | startups can require five, ten or twenty-five |
| | | | years commitment. |
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| Being a part of group also removes the | | | | |
| pressure of trying to be an expert at | | | | Oh, but when they work, they are make being |
| everything. And allows each individual to | | | | in business so much nicer. |
| focus and be brilliant at what they | | | | |
| specialize. There are many types of group | | | | |
| configurations for consortiums. Let me give | | | | |
| you a few examples of some of them. These | | | | Usually the founding group elects three |
| groups formed a single purpose. | | | | leaders to handle the administration. One of |
| | | | the three may have a higher voting right. |
| | | | Usually the one given the higher voting right |
| | | | is because of their investment of time or |
| An entrepreneur consortium can include: * CPA | | | | money, but not always. These leaders have |
| * A writer specialty in business plans and | | | | the responsibility of organizing meetings and |
| advertising copy * A financial management | | | | splitting up the consortium responsibilities |
| consultant * a human resource consultant | | | | between members in a fair manner. |
| specializing in benefit programs and employee | | | | |
| manuals * An Internet consultant * Web master | | | | |
| * Strategic planning consultant * A | | | | |
| secretarial service or virtual assistant * | | | | Money is an important factor when entering |
| Graphic artist * Brand specialist * Public | | | | into these types of agreements. It is the |
| relations firm | | | | main purpose of forming the consortium. |
| | | | Money is also one of the main reasons they |
| | | | breakup -- like most marriages. Because of |
| | | | this, it is important to have a buy-out |
| A training consortium can include: * Writers | | | | clause in the agreement that protects the |
| (copywriter, web writer, direction mail | | | | members and the consortium. |
| writer) * Editors (line editor, grammar | | | | |
| editor) * Reference checker * Graphic | | | | |
| designer * Multimedia specialists * | | | | |
| Videographers * Presentation trainer * Voice | | | | Respect, appreciation, and acknowledging of |
| coach | | | | each other's contribution is mandatory -- put |
| | | | a cap on the M to mandatory. The boundaries |
| | | | and scope of each other's services must also |
| | | | be clear. It is not uncommon for some |
| A software consortium can include: * | | | | members to offer similar services. Thus, the |
| Programmers * Multimedia specialists * | | | | boundaries of who does what is extremely |
| Graphic designers * Marketing consultants * | | | | important. |
| Packaging consultant * Retail consultant * | | | | |
| Product Development consultant * Accountant | | | | |
| Bookkeeper * Virtual Assistant * Business | | | | |
| coach | | | | Being a consortium member doesn't ban them |
| | | | from obtaining outside clients for their |
| | | | particular speciality. However, working with |
| | | | other members to gain contracts separate from |
| A consortium can form that specializes in | | | | the consortium breaks their membership in the |
| children books or educational products. The | | | | consortium. And always have consequences |
| group can consist of educational specialists, | | | | stipulated in the consortium charter. |
| graphic designers, marketing consultants, | | | | |
| self- publishing expert, agent, and various | | | | |
| types of writers. Artist guilds work off the | | | | |
| same principle of consortiums. Some | | | | Communication and cooperation are challenges |
| consortium, many guilds in fact, purchase | | | | for groups of this size. Each member needs |
| real estate together to display and sell | | | | to make big effort to work and be patience in |
| their art. | | | | these two areas. The need for |
| | | | professionalism is important so that the |
| | | | group does not degenerate into personality |
| | | | conflicts or professional battles. Having an |
| Let us follow the money trail of a | | | | outside arbitrator for disagreements is a |
| consortium. | | | | good idea. |
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| The client enters into a contract with the | | | | Even though there is a challenge in finding |
| consortium. The consortium bills the client. | | | | the right members and keeping the |
| Each consortium member discounts his or her | | | | relationships working, remember the |
| rate and bills the consortium. | | | | advantages outweigh any and all cons. |
| | | | Consortiums have been in existence for |
| | | | several decades now and have proved their |
| | | | possibilities. |
| The billing difference supports the business | | | | |
| side of the consortium. It can pay for | | | | |
| marketing or other overhead expenses. | | | | |
| | | | For a list of additional resources, visit: |
| | | | Franz is a Marketing & Writing Coach, niches, |
| | | | product development, Internet marketing, |
| After the client pays the consortium, the | | | | nonfiction writing and training. |
| consortium then pays the members who worked | | | | |