Whats the difference between a government contracting company and a consultant?
Not much. We recommend you still incorporate to take advantage of the enormous tax benefits, but as a consultant you will be limited to one employee – you. Some entrepreneurs opt to first set themselves up as a consultant for security clearance reasons. As a consultant, the prime contractor you are working for can sponsor your security clearance. As a subcontractor, you have to sponsor your own clearances. It’s not unusual for entrepreneurs to promote their company from consultant to subcontractor once they get their Facility Security Clearance (FCL) and are able to hold their own government security clearances. Of course, this only applies to those individuals that need a security clearance for their government contract. If you want the increased revenue but you don’t want to deal with having employees, then becoming a independent consultant might be the right path for you.
