Thinking of starting a small business IT consulting

[Webhead]

I'm thinking of starting my own IT consulting business. Is it worth it? Or better to just find a new job? So far the things I've been thinking about are:

- What kind of services will I provide
- How much to charge
- What will the business be called?
- Create a logo, get a trademark
- Get a business license
- Figure out how I would do invoices
- Figure out how to put money aside to pay taxes?

Did I miss anything? I'm in uncharted territory here.

[CeeBee]

Your biggest concern should be finding a constant stream of revenue.
In my experience the word of mouth is the best tool for finding new customers - people who get thrilled by your services and recommend you to others.
For the beginning your best bet would be combining it with contract consulting unless you have a different steady source of income.
What services will you provide? - well what services can you provide??? Start with what you know best and expand. Having an associate might help.
How much to charge? The going rate for your kind of service in your field and location.

I only did it on the side, last time I charged $75/h for 1 day setting up a small office from the scratch - and the owner thought initially it was outrageously high but finally accepted because I came with very good recommendations (and was very happy because I ended up being overall less expensive than other people who quoted 2 days@50/h) . When I did consulting for a former employer after leaving them I charged $100/h and could have probably gotten away with 150/h but I didn't want to burn bridges.
I'm no longer doing any consulting because my time is limited and valuable, but if I were to do it the absolute lowest would be $100/h since 45% goes to taxes due to my regular income.
The rest are less important.
Last time I used an app called GnuCash. Pretty good handling all the business side and free.

[Webhead]

Your biggest concern should be finding a constant stream of revenue.
In my experience the word of mouth is the best tool for finding new customers - people who get thrilled by your services and recommend you to others.
For the beginning your best bet would be combining it with contract consulting unless you have a different steady source of income.
What services will you provide? - well what services can you provide??? Start with what you know best and expand. Having an associate might help.
How much to charge? The going rate for your kind of service in your field and location.

I only did it on the side, last time I charged $75/h for 1 day setting up a small office from the scratch - and the owner thought initially it was outrageously high but finally accepted because I came with very good recommendations (and was very happy because I ended up being overall less expensive than other people who quoted 2 days@50/h) . When I did consulting for a former employer after leaving them I charged $100/h and could have probably gotten away with 150/h but I didn't want to burn bridges.
I'm no longer doing any consulting because my time is limited and valuable, but if I were to do it the absolute lowest would be $100/h since 45% goes to taxes due to my regular income.
The rest are less important.
Last time I used an app called GnuCash. Pretty good handling all the business side and free.

Yeah, that is definitely my main concern. My plan is to look for work but also do this on the side in parallel. Then if the IT consulting thing turns out to bring in enough income then I'll just do that for full time work. But that's further down the road. For now I'm just trying to think of the things I need to get started.

$75 per hour sounds good to me. I'm going to have to write down a list of all the things I can do and put together some kind of list of services I can provide.

[CeeBee]

$75 per hour sounds good to me.

Keep in mind that as main income this isn't that much unless you get to work full time.
You will pay your own taxes and cover 100% of your own medical insurance that you must buy by law. No 401k or retirement plan.
So the equivalent is probably $50/h salary, but most likely not even close to 40h/wk at the beginning. Don't be surprised with 10-20k in the first year.

[Pinnacle-Project]

Keep in mind that as main income this isn't that much unless you get to work full time.
You will pay your own taxes and cover 100% of your own medical insurance that you must buy by law. No 401k or retirement plan.
So the equivalent is probably $50/h salary, but most likely not even close to 40h/wk at the beginning. Don't be surprised with 10-20k in the first year.

I was going to type what CeeBee said but since he already said, I will just say he is right.

In the mid-90's I worked for a company that offered a variety of technical services to its clients. Our biggest client got technicians for $65/hour. Small clients paid us $125/hour. Project managers got slightly more at each end of that range.

Starting your own business is a big commitment so I think what you said about starting out doing this on the side is a good plan. Do your existing job 8-5. Try to do your own business during off hours. The nice thing about IT is some things work out better during off hours because you are not interrupting people's ability to do their job while you upgrade the server.

[Webhead]

I was going to type what CeeBee said but since he already said, I will just say he is right.

In the mid-90's I worked for a company that offered a variety of technical services to its clients. Our biggest client got technicians for $65/hour. Small clients paid us $125/hour. Project managers got slightly more at each end of that range.

Starting your own business is a big commitment so I think what you said about starting out doing this on the side is a good plan. Do your existing job 8-5. Try to do your own business during off hours. The nice thing about IT is some things work out better during off hours because you are not interrupting people's ability to do their job while you upgrade the server.

I can't remember if I mentioned this or not but my current job is ending. Our company is closing down after 12 years. Our parent company in Japan and our partners are absorbing everything. So I'll be in job search mode soon. Last day here at my current company is 3/31.

[Webhead]

Keep in mind that as main income this isn't that much unless you get to work full time.
You will pay your own taxes and cover 100% of your own medical insurance that you must buy by law. No 401k or retirement plan.
So the equivalent is probably $50/h salary, but most likely not even close to 40h/wk at the beginning. Don't be surprised with 10-20k in the first year.

Thing is, thankfully my wife has a great job and I can be on her medical benefits plan through her work. But either way, even $50 per/hour is more than I've been making.

[northbayteky]

....

$75 per hour sounds good to me. ....

For your area $75 is peanuts. Even my area, which has a lower cost of living than yours, $100-$150 an hour is pretty standard. You should ping slgrieb, he can probably help you out.

[CeeBee]

For your area $75 is peanuts. Even my area, which has a lower cost of living than yours, $100-$150 an hour is pretty standard.

It all depends on customer and service. Will someone pay $450 for cleaning a badly infected 7-yr old machine or buy a new and better one for $350? Imagine the recommendation one would get after sitting most time watching the screen during a 2h during a scan and charging $300.
On the other side a failed RAID array on a server nobody knew existed may bring a pretty penny and people bowing to you. Or fixing the small e-commerce website of a company when nobody working there knows it was setup by a 18yo intern geek and was running from a 10-yr old linux box stuck under a desk, without backup... because linux is failproof.

[slgrieb]

For your area $75 is peanuts. Even my area, which has a lower cost of living than yours, $100-$150 an hour is pretty standard. You should ping slgrieb, he can probably help you out.

Actually, I am at about $75 per hour. But, I'm in a very rural, and frankly pretty low income area. The upside is living costs, particularly taxes and utility rates. Personally, I'd call some of the businesses in your area, and pump them for some info. My hard drive just went dead. Any idea what that will cost me? That sort of thing. That will give you a good baseline for rates.

I wouldn't back off on service rates, but I'd think about tossing new clients a bone in terms of perhaps free diagnostics, a free ADWCleaner scan or some such. Free diagnostics.Chances are once you have the machine in hand, you are likely to get the job. Since about 90% of my customers are about 10 minutes or so away, and often older folks, I offer free pick up and delivery. Here's the scenario; you check a machine on site, need to take it in for further diagnostics, and that usually means you get the work. But of course your situation will vary.

For corporate customers, you will have to have some materials prepared that help establish your credentials, references, certifications, etc. in a nicely printed Word or Publisher document are fine. For credit card processing I just use Square, because for most processors, you're looking at contracts that are almost impossible to decipher, with an incredible amount of hidden charges and fees. Imagine a credit card agreement times 10.