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Thread: Thinking of starting a small business IT consulting

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    Senior Member Webhead's Avatar
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    Thinking of starting a small business IT consulting

    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.

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    Senior Member CeeBee's Avatar
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    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.

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    Senior Member Pinnacle-Project's Avatar
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    Lots of highly skilled people fail in business. Not because they do not have great skills in their particular area of expertise but rather because they do not know how to operate a business. Thankfully, there are people who want to pass on their years of experience to people like you so you are more likely to succeed. One example is the Service Corp of Retired Executives (SCORE). SCORE is made up of some really smart old business persons who volunteer their time helping people like you.

    https://www.score.org/

    They are national so they probably have a location near you. If not, there are other organizations that help people who want to start a business. People at your local chamber of commerce may be able to point you in the right direction. Your local city government may have some resources. Your state web site probably has some resources. If your local library has a lecture series, this might be a topic they cover.

    Good luck!

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    Senior Member Webhead's Avatar
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    Quote Originally Posted by CeeBee View Post
    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.

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    Senior Member Webhead's Avatar
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    Quote Originally Posted by Pinnacle-Project View Post
    Lots of highly skilled people fail in business. Not because they do not have great skills in their particular area of expertise but rather because they do not know how to operate a business. Thankfully, there are people who want to pass on their years of experience to people like you so you are more likely to succeed. One example is the Service Corp of Retired Executives (SCORE). SCORE is made up of some really smart old business persons who volunteer their time helping people like you.

    https://www.score.org/

    They are national so they probably have a location near you. If not, there are other organizations that help people who want to start a business. People at your local chamber of commerce may be able to point you in the right direction. Your local city government may have some resources. Your state web site probably has some resources. If your local library has a lecture series, this might be a topic they cover.

    Good luck!
    Great idea! Thank you! I had no idea that even existed. I will take a look. This is the part I have zero experience with. I have no clue how to start a business. LOL

  6. #6
    Senior Member CeeBee's Avatar
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    Quote Originally Posted by Webhead View Post
    $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.

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    Senior Member Pinnacle-Project's Avatar
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    Quote Originally Posted by CeeBee View Post
    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.

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    Isn't there a ton of competition in that? In your area?

    Unless you can partner up with someone and corner an area I would think an upstart would get buried.

    Now, if you are willing to travel outside the city...you might be on to something. Get out into the area where your experience will beat out that kid down the street that fixed his grandma's computer once.
    "But I got it because I'm an iSheep who needs to have all my stuff have an Apple logo on it."

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    Quote Originally Posted by Webhead View Post
    ....

    $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.
    When you're left out of the club, you know it. When you're in the club, you don't see what the problem is.

    I am Green-Eyed.

  10. #10
    Senior Member CeeBee's Avatar
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    Quote Originally Posted by northbayteky View Post
    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.
    Last edited by CeeBee; 03-13-2017 at 07:58 PM.

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