Approaching to Start an IT Consulting Business,are you ready for such move??
Starting an IT
consulting business is an excellent path for those who are interested in
becoming an entrepreneur. Here's how to open an IT consulting firm.Starting an IT consulting firm is relatively easy if you have strong IT skills that are in high demand.
The good news is that there is a labor shortage right now for talented IT workers. Companies simply cannot find enough resources to accomplish their IT objectives, so they are turning to external IT consultants for help.
As such, if you open an IT consulting firm today, you may find that you immediately are busy and you are profitable right away.
If you play your cards right, you can grow your IT consulting firm to be big and profitable.
But, before starting an IT consulting company, you should think things through. Here are some important considerations for those of you who want to open an IT consulting business.
- Do
you have a first client? If possible, it's best to start
your business with a core client. The alternative is to simply start an IT
business and begin selling work but it's much better to have that first
client in hand before you quit your day job.
- What
IT problems will you solve? Position your business based on
what pain points you will address for your clients. It's important to
narrow your focus at least to the point where you know prospective clients
will be interested in your offerings. Just saying you are an IT consultant
is too broad. Saying you are an IT consultant specializing in SAP
outsourcing is much better. If you can narrow it even further, that's
good. Perhaps saying that you are an IT consultant specializing in SAP
outsourcing with strong skills in supply chain logistics would be even
better positioning. That's very specific and differentiates you from
competitors. You get the idea.
- Don't
define yourself too narrowly. It's good to
offer more than one thing. In a meeting with a prospective client, you'll
hear all sorts of pain points. You don't want to not be able to generate
business from one of those pain points simply because you've micro-niched
your site too narrowly.
- Form
a legal entity. If you don't form a legal entity and
simply act as a sole proprietor, you are effectively just an independent
contractor. That doesn't really count as far as starting an IT consultancy
goes. To be a real company, you need to be a corporation or an LLC. As a
bonus, setting up a corporate entity of some kind will also shield you
from personal liability.
- Build
a website. No IT consulting company worth its salt
doesn't have a website. Plus, people who are buying technology services
generally search for firms via the web. As such, you should not only have
a website, but you should also search engine optimize that website so you
do well when prospective customers are searching for your services via
popular search engines.
- Try
to get long-term contracts. Be willing to offer a lower
rate if you can get a longer project. Having too many small projects that
start and stop can be a deathblow to new IT consulting companies. It's
much better to get bigger, longer projects.
- Never
stop selling. A common mistake when opening up an
IT consulting company is to sell your first project, do the work and then
find you have nothing to do when the project ends. You should always be
selling new work to ensure that you never have long periods of time when
revenues are not flowing into your bank account.
- Build
a network of freelancers. Given the ebb and flow of
consulting work, don't get stuck with employees who are on the bench between
projects but consuming payroll dollars. Instead, leverage independent
subcontractors on a just-in-time basis. It may be more expensive on an
hourly basis, but it can be more profitable over the long term.
- Track
utilization and use good professional services automation software. An IT
consultant that doesn't use good software tools to help them manage the
work will soon find themselves in trouble, both in terms of customer
service and financial stability. Whenever you can afford it, invest in
tools that will make it easier to manage your consulting business and
provide great service to your clients.
- Consider
your car. Will your
current automobile work as a service truck? Can it haul five PCs and
monitors at a time, along with 100-feet of category five cable? With
gasoline at three-dollars a gallon, is it the best bet as a fleet vehicle?
Take a look at your options. Once you make your decision, take your
branding information to a local sign company and prepare to pony up $200
to $500 or more per auto to extend your brand properly.
- Get a new phone. You want a
cell phone that’s masterful at e-mail. You’ll constantly require access to
vendor, client and partner e-mails between service calls in the field. I
prefer a Treo, with its simple and intuitive access to POP3 e-mail, while
others recommend Blackberries or Windows-based Smartphones. Whatever you
choose, be sure to purchase a vehicle charger and a Bluetooth headset.
You’ll need both.
