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Pro’s Con’s etc…

What do you think about ditching the nine to five and starting your own consulting company?

7 Spice ups
2

I think you’re probably going to work 6am to 10pm 6 days/week and probably several hours late late at night on the 7th day. Not to say it can’t be done or isn’t being done, people quit their jobs all the time and go out on their own. But don’t think it’s going to be less “work”, it’s more.

It’s a crowded cut throat market already. If you have something nobody else has, you’re one up on your competition. Just make sure “low price” is not your leg up. It has to be a skill or special knowledge or location. If you compete only on price you’ll sell yourself short and only get customers who want work done cheap, not correct.

3 Spice ups
3

In general, I advise against starting your own business. IT people don’t tend to be business people, it is an oversaturated market and it is very, very hard to make a serious go of it. Most MSPs burn out in a few years and give up.

4 Spice ups
4

As Kyle points out, working for yourself means that there is no break, no vacation… never. You work all day, every day.

5

Things to consider.

  1. Insurance / Bonding

  2. Wear / Tear on car

  3. Cell Phone usage

  4. Unstable Income ( Slow Months)

I quit a 9-5 job 10 years back and it was the best thing I did. It started slow but I was a real go getter. If there was a job I had to tackle that I’ve never done before it was quite a rush. What may help you to fill in the income holes on slow months is a site called onforce.com or work market. Those two sites give jobs out to the IT professional kind of like side work.

Good luck.

2 Spice ups
6

I agree, I’ll always be on the clock. … but better pay

7

You’ll need to incorporate (do this before going any further), you’ll need a CPA and an attorney, you’ll need a payroll company most likely (one that handles HR and stuff.)

3 Spice ups
8

BWAHAHAHAHAHAHAHAHAHAHA…

Oh wait, are you being serious? No, it doesn’t work that way. How much do you think that you can make?

1 Spice up
9

Keep in mind that if you aren’t doing the work yourself that you are paying someone else to do it. You have to pay all of the taxes, not just your taxes but the corporate taxes, payroll taxes, workman’s comp taxes, health care, etc. out of the incoming money.

For every hour of service that you provide you probably need one or two hours or non-billable background work, if you are lucky. You have to do the accounting and the billing, deal with accounts receivable. Money that comes in is often slow to do so, 30 days or more after the work is completed. Sometimes year later. Sometimes never. Sometimes only after a lawsuit or you sell out to a collection agency.

Even if you bill $100/hr. Take away the taxes. You are down to $80 at most. Now split that three ways. That’s $26/hr. If you can bill at $100/hr, do all of the work yourself and get the time down to three hours for every hour of billable labor (good luck on that) you might be able to pay yourself at $50K if you sustain that every day, forever, without a break.

But there is no money to pay for retirement, health care, vacation, sick days, etc.

2 Spice ups
10

People manage to do this, but be aware that it is insanely hard. Even if you have all of your clients lined up and ready before you get started, it is really hard. If you need to take out loans and “ramp up” it is that much harder. How will you do sales? How will you handle off hours? How will you handle getting sleep?

1 Spice up
11

You will likely need to work out outsourcing arrangements. You will need bigger, established IT firms to back you up. Companies that can do 24x7 support, cover more technologies than you can alone, have more experience, have a stable staff, can ramp up or down as needed, etc.

12

Nothing better than being your own boss, but in addition to supporting clients, remember you’ll be sales, marketing, and accounting, too. It takes a lot of self-drive and long hours to start a successful business. I don’t think that you’ll find having your own business will help you “ditch the nine to five”. It is more likely to require a five to nine.

On the financial side, there is also the matter of dealing with your own estimated taxes, social security and other government regulatory payments, plus a higher likelihood for tax audits. You may consider starting an LLC or other corporate formation to protect your personal assets, and of course there are filing fees for business licenses, separate taxes if not sole proprietorship. When it comes time for home and car loans, lenders look a little harder at the self-employed since there isn’t a third party reporting income, debts, and such.

Not to dissuade you, but as long as you go into it with eyes wide open to those matters, go for it. Speaking as someone who hires IT people, I don’t hold it against anyone if they’re interviewing for a job and have run a business that they decided wasn’t working out, so in my opinion, trying shouldn’t close any doors for you.

13

Lots of valid points Scott. There is room for the little guy out there. Especially for the residential aspect of I.T. There are alot of home users that need help too. Hey Ricky as Scott pointed out too…Check what your tax liabilities are going to be. Sit with a CPA before diving in.

1 Spice up
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( Moved to the IT Service Provider group, which has many threads of the same variety )

1 Spice up
15

If you decide not to start your own business now, you may want to focus on getting a job at a mid-size consulting firm or VAR, where you can learn the ropes of the business, meet people and build a reputation. That might be a better springboard for starting a business later.

1 Spice up
16

Funny…all the negatives pointed ou from you all are the same I have. I know I will work more, the accounting and sales would be on my shoulders as well. And…non payment and overdue payments would be a huge problem. I dont mind the work hours, my nine to five statement was a little tongue in cheek, I’m basically on call now 7 days a week 24 hrs a day.

I support two sites, 25 users, sales, production, wharehouse. Six servers, VM, PFSense, VPN, Security Access, Video Surveilance, VOIP, backups, MAR / Imaging, policies, ecommerce support, one man shop and I am making $18.00 hrly.

My skills have increased over the years and I have a very large scope of skills, worked at Microsoft, American Airlines, Land America, top companies and was successful at each.

My problem has been that after 9/11 my background checks prohibit me from working for companies that pay well for my skill set. I was a heathen when I was a much younger and dumber man.

I had a drug charge in 1990, I put that away and have not had any convictions since, but it HAUNTS me and cripples my viability in the market.

FML…I can stay where I am and exist… to the day I have a heart attack and die at work . Or I can get off my arse and make more for my family as a contractor. But the reality of the "dry " months and failure, well, theres that!

17

Wow, a lot of negative comments here :confused:

One of the main benefits of starting your own business is the extra work you put in, you gain from that. Working for another company, you bust your ass, go the extra mile, you get to keep your job, maybe get a raise, maybe not.

Two of the biggest hurdles I’ve seen with IT people going off on their own is their lack of knowledge in Business and Marketing. If you feel you have a good handle on those things or know people who do and are willing to contribute then you have a shot.

1 Spice up
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Sales and Marketing I would need desperately and quite frankly I am not the guy for that job. I need a IT Pimp! :wink:

19

Scott…

I support two sites, 25 users, sales, production, wharehouse. Six servers, VM, PFSense, VPN, Security Access, Video Surveilance, VOIP, backups, MAR / Imaging, policies, ecommerce support, one man shop and I am making $18.00 hrly.

My skills have increased over the years and I have a very large scope of skills, worked at Microsoft, American Airlines, Land America, top companies and was successful at each.

My problem has been that after 9/11 my background checks prohibit me from working for companies that pay well for my skill set. I was a heathen when I was a much younger and dumber man.

I had a drug charge in 1990, I put that away and have not had any convictions since, but it HAUNTS me and cripples my viability in the market.

FML…I can stay where I am and exist… to the day I have a heart attack and die at work . Or I can get off my arse and make more for my family as a contractor. But the reality of the "dry " months and failure, well, theres that!