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Anyone here that started an IT Consulting Business? I’m looking into doing it myself and I’m just trying to get a few thing started up. I believe that this is one of those types of business that you don’t need hardly any capital to start up with. Just a ton of knowledge and knowhow.

I’m mainly looking for people’s Experiences, Do’s and Don’ts, and how they managed working full time and then transferring to FT Business owner.

This will be Small and Medium Consulting. My biggest obstacle is customer acquisition.

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A-Always

B-Be

C- Closing (selling)

You need a pipeline of business. Don’t forget to pay your estimated taxes.

Others here will tell you the first thing to do it form an LLC/Inc/ something-

My first thing I’d do is see you have enough business to “form a business” No business=no money.

Put on your marketing hat everyday.

Good luck

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Talk to people, networking is key. Have a decent web site so when people Google you, they see you are serious. Doesn’t have to be big & complex, just useful.
And get your LinkedIn profile looking good too.

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Consult both legal and financial professionals to ensure you have a solid base for your business and know what to expect the economics of your business to look like. Depending on what your goals are, they can help you decide whether/how to incorporate and what your overhead and profit margins will look like.

Unless your job is very flexible with allowing you to do your consulting during the day, you’ll find it quite difficult to split your attention between your growing client base and your full time job. I tried to do this when I started my business (was doing full-time temp work through RHT) and I just couldn’t be there for my clients and perform my duties at the full time job. I found a way to automate most of what I was doing for the temp job and leave the contract early to everyone’s satisfaction. This allowed me to focus fully on my clients and grow the business instead.

It’s a big leap of faith needed to make that change, but it should be firmly rooted in good financial understanding (what does your savings look like vs your burn & growth rates?). There are plenty of competent I.T. people out there, but the vast majority of them are not sufficiently good with people and business concepts to go it on their own. Make sure you’re very honest with yourself here and take classes/read-up to get yourself where you need to be before you take that plunge.

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(I was self-employed repair and consultation for MANY years…I wouldn’t recommend it)

Be prepared to never, ever be able to have a moment where you aren’t thinking about work / customer issues. The advantage to working for someone else lies in this simple fact: at 6pm, I leave here, go home, and I don’t have to think about / worry about work stuff until 9am the next day. Owning your own business is quite the opposite - you never get to leave work behind, especially in the startup phase. You’ll get to work 26 hours a day, 9 days a week, 407 days a year… I only have to put in 40 hrs, beyond that is overtime, my check is consistently good, I don’t have to think about business strategy, customer relations, marketing (Satan’s own occupation), or any other non-technical BS that the business owner is forced to do. I gave up the entrepreneurship route for job security and lots more money. YMMV, but remember that you won’t get any days off. You will also have customers that won’t listen to your consultations, then want to blame you for what went wrong, even though they ignored your suggestions. I don’t have those, and I’ll never go back to that side of the industry. I’m finally freeeeee…

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Have a wife with a really good paying job!

Don’t work for individuals, only companies. And if you are doing that you need to be available during business hours. I turned my full time job into my first contract client. That way I started of with a pretty good footing.

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MrBoston best answer👍

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Actually, I disagree entirely. Yes, you need to make sure you have clients lined up before making the plunge (perhaps start off with side work until you can make the full time leap), however if one just starts taking clients, and one doesn’t CYA, one can wind up in a world of hurt.

At the minimum, he needs insurance to cover potential losses/damages against him in case he screws up (and the % of downtime, lost data, and damaged equipment by human error is large). One reason why people encourage the LLC step is to offload liability onto an organization rather than the individual. Taking down a client accidentally (or even having it crash when it is worked on, without it being his fault) can cost tens, perhaps hundreds of thousands of dollars. It can not only cripple a new business, but also cost somebody their personal assets.

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As for a new consultancy, I would recommend working a day job until you are ready to take the leap. Do you homework. Find out what other MSPs are doing, how they are doing it, and how you can compete. Perhaps you should specialize in a specific industry or service to gain initial market share. If you have experience with medical, or financial, manufacturing, legal, gov, whatever, then leverage that and find areas where your expertise can provide value to a business.

In that vein, develop business relationships with VARs (or become one yourself). Reselling is a huge potential for service providers.

Network, network, network. Find out areas where you can meet people, develop relationships, gain a good report, and make yourself known. Word of mouth works both ways, and can do wonders.

Put together a good business model (get a consultant to help if necessary), and CYA with taxes, insurance, LLC or corp, and plan for growth. If business takes off, you will need help.

A lot of people fail in their first year or two because they have no plan of attack, and have no idea how to manage their business. If you do your homework, and have a solid service plan with competitive pricing that will keep your revenue stream capable of keeping your head above water, then you should be ok. Good luck.

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I did this. It wasn’t easy at first. You’ll have some tight times but it’ll pick up once you meet the right type of people.

Advice: Join a chamber of commerce or similar way to network with smaller businesses.

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It takes a lot more money then you would think. The longer you can work in the business without having to take money out the faster it will grow.
Also I would spend some time thinking about the size you want to be. Are you wanting to be a 1 person shop or a 100 person shop? Changes what you look for in employees and potential clients.

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I think it’s critical that you demonstrate a thorough understanding of the verticals you’ll be going after. Do your research. Become familiar with key terminology, apps and challenges commonly seen in those arenas. Selling your services starts with selling yourself as a subject matter expert (SME). Best of luck… and I hope you’ll recommend Quorum onQ for clients in need of super slick DR solutions :wink:

Matt

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i can tell you from doing both, that my job as a network admin is way more fun and pays better than my days an MSP

if you want to learn that the hard way though, some things that will help you are:

  1. Hopefully having a 2nd income (spouse or something to cover basic bills)
  2. dont touch a home users computer EVER under any circumstances. stick to businesses and business machines 100%.
  3. charge enough to make the work worth it and you will have higher quality customers. you dont want to be the cheapest guy that all the cheap people go to. be the guy thats the best and charges a premium and you will only have customers that understand and appreciate than.
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You need to know how to say NO.

Especially to friends and relatives.

As Jenyus Said NEVER touch a home computer. They cannot ever be fixed the way the user wants.

I have done exactly what you are planning, it is not a pleasant road.

NEVER open/consider a Retail shop front. That cost me over $250,000.00 (ok it was only AU$ but it still hurt)

Know that it will always take longer than you think because you will NEVER be told the true extent of the problem. If you must quote a fixed price then think of a fair price and double it.

If you are consulting and quoting pay attention to the detail. I once got a quote for mounting wall racks that did not include drilling holes, now that was a fight.

Life is good now after 20 years. I do not own a boat or Lamborghini but I do get to do lots of things I want to. And I only work 3 days a week.

Good luck

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Don’t undersell yourself. It’s easy to quote a low rate just to get work in the early days, but all that gets you is a time suck. Several times I quoted a low fixed monthly rate because the client claimed that they wouldn’t need much time at all - only to end up with an unhappy customer sucking up time that I could have been billing at triple their rate.

Leading on from that: avoid fixed monthly fees for support unless you also have fixed hours.

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Building on what Joe Williams said; defining the scope of work is very important. You should provide a quote which meets their stated needs, but define what that amount encompasses.
If they place more demand on you than originally agreed, there should be a pricing schedule which allows them to access more of your time & skill for an already-agreed-upon fee.

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Don’t have any experience, but there’s a blog I used to read of an Australian guy that built a tech support company:
www.technibble.com

Beside the many technical articles, he has many articles about how to build a computers business from the ground up, including all sorts of legal considerations, costumers relationships, etc.

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I started a computer repair shop 4 years ago that turned into many things. One of which was commercial and government IT consulting. It was a huge learning experience, let me share it with you:

Never start a business unless you are absolutely sure you have enough startup capitol

Skip out on working for the general public, they will constantly nag you and honestly cant pay you enough

Don’t open a storefront. Stick to consulting out of a home office and get a P.O. box for your accounts receivable

Same thing goes with a phone. Get a VOIP line with a separate number for customer contact. Make sure the service has the ability to forward calls to your cell phone. NEVER GIVE OUT YOUR PERSONAL NUMBER. If you do, god help you

Keep your overhead as low as possible

Build in the ability to remote access your primary systems from the start. There’s nothing more irritating than having to drive back from the vacation you thought you could take because everything was “running smooth” to fix a simple problem that could have been done remotely

Don’t take on projects that you aren’t 100% sure you can complete in a timely manner and with the required specifications. Sometimes you need the money, but it turns out that you lose every time because your time is spent troubleshooting instead of on your bread and butter with new clients

Charge what you are worth. If your client doesn’t have the money to properly take on a project, don’t agree to cut corners for the sake of helping them out. Again, you will lose every time

Some clients become good friends over time. Don’t let that get in the way of good business decisions. Business is a nasty dirty mistress who can make you cold hearted hermit.

Always be honest with your clients. Don’t build up their expectations of what you can do for them to sign them on.

Remember to bill regularly and as often as you can. Don’t let a job complete and wait weeks to bill for it.

Set aside time for yourself and your family. Make sure that your clients understand you are a human being and not a robot.

I am sure there are many others. I have seen all kinds of things and been in all kinds of situations during my run. I closed my shop and consulting firm to take a job with a steady paycheck and benefits, but I still do some consulting on the side. I recommend doing it as side work for a while until you get a grasp for exactly how the market works in your area and have crunched all the numbers on expected profits.

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A thousand times yes to what iLLiXiR said. If I could spice what you said 100 times I would.

@illixir

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I run a consulting company. Here are my main tips:

  • Make a Scope of Work for EVERY CLIENT YOU WORK WITH
  • Find out the average rate around you and charge around that
  • Track all your time (even time you’re doing internal stuff that you aren’t getting paid for, you’ll get powerful insight).
  • Prepare to get inconvenient calls, I had to go to a customer site on my wedding anniversary
  • Get some good support tracking software, but don’t blow your overhead up. Currently, I’m using Kayako (the version before their self-hosted version was a rip-off, I think it was like $700). I’m hosting it in Digital Ocean for $5/month.
  • Make a good web site for your company, it doesn’t have to be huge, just professional. It lets people know you’re serious. Also, when one of your clients hands out your card, their referral will have a nice site to loo at
  • To boost referrals, offer an account credit for referring (I offer $100/referral after the referral receives a bill)
  • Form a legal company (an LLC is the easiest as taxes pass right through to you, but you still get a legal shield)
  • Partner up! I’m a Microsoft Partner, a Dell Partner, and a Lenovo Partner. I also has an Equus (Nobilis) partnership to offer white-label sales

I’m starting to get a little bigger, so I have had a little bit of capital to invest in expansion, such as offering some managed services. The most important thing it to take it slow and cautious, and always be marketing. For example, I was at a local fast cas joint a week or so ago and the cashier was having trouble with the computer. BAM, whip out a business card. They are now a lead I’m working on a proposal for. Always be marketing and networking, and make sure you deliver good quality service. When you make a mistake, don’t charge the customer for that time. They’ll recognize you for it by sticking around.

I almost forgot, make sure you have a work life balance. I pretty much always throw my ThinkPad in the trunk when I’m going out. But, when it comes to family (be it dinner or soccer games or whatever), it doesn’t come with. Set aside time where you are not working. Period.I have a trusted friend who I bring in as a contractor to handle things during family time (it’s an affordable way for me to get some help in when needed, and it provides him with some side cash).

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