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Hi All,

I feel like all IT Professionals arrived at this point once or twice in their careers: should I start my own business or not?

Some background - I have a full time gig that I don’t plan on leaving any time soon. I’m very happy here. But I also do some light consulting and network administration on the side (just recently helped a friend of my wife set up her computers and her network for her medical practice). I was considering applying for an LLC, and using that business name to do work for my wife’s friend, as well as any other business that I help support AND get paid for.

Is it worth it? What are the pros/cons? At this moment I’ve been working with this client for a little over a year, and I think there may be room for some expanding, I just want to know if it’s worth it from those who have done this before.

Thanks,

B

74 Spice ups
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Depends? The reason saying that is a I used to do a bit of ‘Private’ work on the side , mostly for a bit of beer money. Which was OK , but the trouble is when these people call you during your normal work time.

31 Spice ups
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First things first, especially as your friends run a medical practice is you need to be careful regarding insurances and cover for yourself just in case anything goes horribly wrong. Being a business will give you more clout with this as liability will be directed at the company rather than you as an individual, but i would still make sure your a**e is covered just in case.

But saying all that the real question you need to ask yourself in my opinion is are you going to be doing more work for other people? if not would setting up a company be worth all the hassle?

16 Spice ups
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If you start your own business, there are lots of benefits. Like not paying yourself right away, staying up late, and losing your hair from stress.

But in all seriousness, it is hard and stressful. You mention your background, but not why you want to own a business. You get to be the captain, but you also have the liability. What’s the reasons?

19 Spice ups
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I started my own IT consulting LLC years ago. I did it mostly for tax and liability purposes. Eventually I got to the point where I was sick of working all the time (burn out). I still have the LLC but have had zero activity in it for 2017 and plan to keep it that way.

In the end, my advice is find one job that pays the $ you need and has growth potential, unless you’re starting at the top. I was never able to justify a viable income doing my side-business without doing a crap-ton of helpdesk for SMB, which I have zero interest in at this point in my career.

8 Spice ups
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Do eet! Definitely form a LLC; you need the liability protection of a LLC. Keep your company’s and your finances separate.

Pros:

  • A lot of things can now be deducted as business expenses: travel expenses to/from clients, the fraction of your house used for your office (and all house expenses such as insurance, utilities, etc.).
  • Having a name and logo and business card and marketing collateral looks more professional and credible.

Cons:

  • Having to keep books: not a big deal really, but not a zero effort. I use Quickbooks Online.
14 Spice ups
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I don’t see why it would be “hard and stressful”? What would he be doing that’s different from what’s he’s doing now? The only difference would be in the bookkeeping of income and expenses.

12 Spice ups
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Careful though. As a contractor, sometimes placement agencies want us to set ourselves up as a business and run our money through that business. It has pros and cons.

Pro: We end up making more money.
Con: We can only bill Net 30.

Pro: We end up making more money:
Con: We have to do our own books.

Con: We don’t get sick or vacation pay.

Con: We also can’t write off things like travel, cell phone, part of my house, “business lunches”, etc, because of the “type of business” we run. In Canada, it’s called a “Personal Service Business”. The Canada Revenue understands what we are doing, and how we aren’t running a typical business. Because of this, they don’t treat us like a traditional business. We don’t have staff, we don’t sell products, we don’t really have overhead costs, etc. So we can’t write anything off.

3 Spice ups
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Expanding scope. When you stop being the guy doing it to be nice, and start being the professional, we tend to own projects until we or it dies. That’s what I flat refuse to help anyone in my off-hours, I’d rather not support a pensioner’s computer for the next few decades because it never “worked right again” after I installed their new printer.

More to the point, I think it’s been mentioned enough already, but definitely get an LLC going to protect your own assets if you’re going to be doing billable work on the side. If it’s just a side gig, then the constant SMB-style management of users won’t be so bad…

Financially and legally it’s a no brainer to protect yourself. Expansion means taking a long look at your work/life balance and debating if you want the risk of taking on a client who will immediately suffer from learned helplessness and pester you at all hours.

6 Spice ups
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Do some serious investigation into liability insurance and the costs associated with it. If you are going to do any type of IT work on someone else’s property you will NEED to have this.

I know several different MSP’s locally that tried to have a go of it without the liability ins… they are no longer in business.

Second thing you need to look at, is health ins. as a small business you need to have health coverage. You will need to see about any state, township or county licenses that you may need. some of the licensing may require you to have an actual OFFICE and not “i work out of my home”.

make sure all the things you need to take the step are attainable and within reason. then a year or more prior to taking that step you put the plan into motion, and set up the ins, and lic stuff so that when you are ready to do it, its all done and you can concentrate on getting business.

6 Spice ups
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If you are thinking of doing it as a side gig ongoing to make some extra cash I think it would work. That way you can really choose your customers.
If you are planning on leaving your current job to do your business full time it will be hard getting good customers, paying customers, etc etc.
If you are really set on starting your own business, I would advise you to still keep your full time job until it gets to the point that you can’t. Why? Because at first, say the first year, will be really, really slow for you. So just build up your client base until you have enough work to do as your own business.
Best of luck!

6 Spice ups
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If your out to make a difference and bring a certain change to the market as well as offering something no-one or very few offer, then do it.
Just keep in mind, you will be your own worse boss and own worse employee. It WILL be very demanding and the job becomes very thankless. Any expectation in regards to pay go out the window. You will basically have a kid on your hands and if you believe in the child, you will keep it alive.

I made the leap because I wanted to make a difference after dealing with many IT company’s as and IT guy myself. I often times felt taken advantage of, dispite my best efforts, or was only offered solutions that only benifited the IT providers sales commission stratagy.

Hope this helps, good luck!

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Thanks for the responses, all.

I am just looking at this from a side gig perspective: is it worth filing for the LLC? I don’t plan on having TOO many clients, maybe a few here and there. I do not plan on quitting my main gig either.

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I would.

My martial arts instructor makes <$6,000 a year and he has a full LLC and liability insurance so that he can actually retire at some point and not worry about paying off debts.

At the end of the day, neglecting the cost of insurance, it shouldn’t be too much more than a few hundred $$ to get rolling.

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One of the most difficult aspects is gaining a clientbase. I took over the clients from another company that went bust.

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Just make sure that you don’t bite off more then you can chew. It can be tempting at times to go straight out of your day job to do a small gig at someone you know trough someone which pays great, but in the end you stay up working all night, they are not paying on time and you have to go back 5 times to fix everything.

Starting for your own as a side job is just fine and has a lot of perks, but just keep in mind that the only one who cares for your well being is your self. There’s no boss to say no or say “Enough is enough”.

Also make sure to check with your current employer, not all are to keen on people doing jobs that take their attention and dedication of their day jobs.

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There are many good points mentioned here, especially about the insurance.

What I found doing some side gigs is that no one wants to pay you what you and your time is worth. Keep your neighbors out of this unless they understand upfront that you are charging for your services, not giving them away to them because you are a ‘nice neighbor.’ Most people are skinflints and want things done perfectly for free, if possible. They don’t mind paying a big-box store a large sum of money to do something but expect someone who works alone to do the same job for a penny on the dollar, if not less.

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Cons:

Accountant fee

Lawyer fee

Insurance fee

Both contributions for pension fee

Health insurance fee

Collection agency fee when clients don’t/won’t/can’t pay

I’m sure there are other cons

Pro:

You’re the boss

1 Spice up
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Will this bring you more wealth or money? The two are very different.

http://www.relfe.com/A06/wealth.html

If you are doing this to create more money, don’t do it.

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This I don’t understand. Personal credit card readers exist, and if you’re dealing with individuals rather than businesses, payment on completion is a must.