Wanting to start my own IT consulting firm

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killerasp

Gawd
Joined
Jul 17, 2001
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963
I am in the early stages in starting my own IT consulting firm. I already have 3 clients that have agreed for system installations and a contract support. The details are still be worked on. While these are small installations (5-10 PC's), im looking to expand to medium sized business that are looking to outsource their IT dept b/c they dont have the resources to employ a full time staff.

I know there are many professionals that are older and much more experienced than I. Is there any advice that you can give me as i start my own business? I would VERY much appreciate it. I want to start off on the right foor rather than make mistakes and learn from them.
 
From one entrepreneur to another... trust me when I say this.

The ONLY way to learn is by making your own mistakes and learning from them!

That is the step in the right direction... I started my 'own' web development/networking/pc repair co. in January. It didn't pick up majorly until a few weeks ago. You know how many mistakes I made? And you know what? I'm glad I did!

Hope this helps :)
 
i work as a system/network administrator during the weekDAYs. I posted on craigstlist looking for nighttime/weekend work. I got in contact with one guy that needed some small work done at his law office. the guy really liked me and noted that i was brilliant compared to the other craigslist people he talked to. Anyhow, he was impressed wtih me and he put me in contact with this stupid IT admin. We are working out on future projects right now. And for the other two, a cousin of mine who is a dentist got word that friends of his were opening up new dental offices and needed systems installed in their offices. Natrually, i got in contact with them and the rest is history.
 
RavinDJ said:
From one entrepreneur to another... trust me when I say this.

The ONLY way to learn is by making your own mistakes and learning from them!

That is the step in the right direction... I started my 'own' web development/networking/pc repair co. in January. It didn't pick up majorly until a few weeks ago. You know how many mistakes I made? And you know what? I'm glad I did!

Hope this helps :)
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Thansk man.

If you dont mind sharing, what mistakes did you run into?
 
killerasp said:
i work as a system/network administrator during the weekends. I posted on craigstlist looking for nighttime/weekend work. I got in contact with one guy that needed some small work done at his law office. the guy really liked me and noted that i was brilliant compared to the other craigslist people he talked to. Anyhow, he was impressed wtih me and he put me in contact with this stupid IT admin. We are working out on future projects right now. And for the other two, a cousin of mine who is a dentist got word that friends of his were opening up new dental offices and needed systems installed in their offices. Natrually, i got in contact with them and the rest is history.
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i see..thanks
 
peeps get many hits off of craigslist? all i ever browse is the nsa personal ads for giggles.
 
killerasp said:
Thansk man.

If you dont mind sharing, what mistakes did you run into?
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First and foremost... my BIGGEST mistake was NOT having a BUSINES PLAN!!! That sucked major ass. I thought I didn't need one... I thought I knew what I was doing. Boy was I wrong!

After that... not charging enough. I did a couple of websites and I only charged $200 for each. With $35 domain registration and 4 months of hosting, I got a check for $275. Needless to say... I didn't put much effort into the site. Now, it just hangs there as the project I did but am not too proud of. Now, I charge more, I also spend more on the clients/customers.

Hope this helps!

Tune in next week for 3 more mistakes :D
 
RavinDJ said:
First and foremost... my BIGGEST mistake was NOT having a BUSINES PLAN!!! That sucked major ass. I thought I didn't need one... I thought I knew what I was doing. Boy was I wrong!

After that... not charging enough. I did a couple of websites and I only charged $200 for each. With $35 domain registration and 4 months of hosting, I got a check for $275. Needless to say... I didn't put much effort into the site. Now, it just hangs there as the project I did but am not too proud of. Now, I charge more, I also spend more on the clients/customers.

Hope this helps!

Tune in next week for 3 more mistakes :D
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one book that i definitley recommend reading is "good to great". i swear..that has to be one of the best business books i ever read. as my business proceeds i will live by that book.

In my opinion, its not how much you charge but rather how is the quality of service you provide. I have a very outgoing personailty but i manage to balance that with a level of professionalism that as my previous customers always coming back to me for more work.


but thanks for you advice man. i hope your business soars and you get so much money you dont know what to do with it.
 
killerasp said:
one book that i definitley recommend reading is "good to great". i swear..that has to be one of the best business books i ever read. as my business proceeds i will live by that book.

In my opinion, its not how much you charge but rather how is the quality of service you provide. I have a very outgoing personailty but i manage to balance that with a level of professionalism that as my previous customers always coming back to me for more work.


but thanks for you advice man. i hope your business soars and you get so much money you dont know what to do with it.
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Good luck and let us know how it goes!
 
My advise is to not undersell yourself and never do anything for free.

It creates false expectations when someone thinks that you will do work for free or next to nothing. If it takes you three hours to do a job then charge that three hours even if it took longer because you had to learn something new. The only time that I make exceptions is if a job takes 20+ hours depending on the situation.

Plus I have found that when you do a good job and the client considers it worth the money that they paid then they appreciate you much more.

Of course when you are first starting out this is hard to do while you build your client base. You probably want to start with low rates and raise them as you get better.

A lot of times you will solve the problem and it will be because of something stupid that they did (like install Kazaa or they tried to fix it themselves and made it worse). In these situations I gently explain that this is why it happened and it's not their fault because they are not a tech but it would be best in the future to not attempt it again.

The best thing you can do is setup maintenance contracts for coming in once a week for 4 - 8 hours and doing systems administration. This way you have guaranteed money rather then some weeks that are super busy and some weeks that you have no work at all (and no income).
 
Bean Dip said:
The best thing you can do is setup maintenance contracts for coming in once a week for 4 - 8 hours and doing systems administration. This way you have guaranteed money rather then some weeks that are super busy and some weeks that you have no work at all (and no income).
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Definitley, i will have a maintaince contract for my clients.

But what would you do if you cant fix the problem? Would you still charge them?
 
killerasp said:
Definitley, i will have a maintaince contract for my clients.

But what would you do if you cant fix the problem? Would you still charge them?
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No such thing in this industry. Sometimes fixing an issue means resolving it in a different way. :D Replacing software, wiping systems, going with a different vendor, etc. And they aren't necessarily paying for a fix, since they can "fix it" themselves by doing the above. What they are paying for is a professionals time. That doesn't just mean actual work, it means advising for the future, all the research knowledge you have accumulated, wisdom, etc. I'm gonna butcher this story because I only remember the concept of it, but there was a guy that got called in to fix this huge million dollar machine that had a lot riding on it. He walked in, looked at it for a bit, turned a small knob and then walked away. The machine worked great and the company got an invoice with two details on it. "Turning knob: $5." "Knowing which knob to turn to fix machine: $500." This is the information business, and even if you don't do work, providing information is a service.
 
OldPueblo said:
The machine worked great and the company got an invoice with two details on it. "Turning knob: $5." "Knowing which knob to turn to fix machine: $500." This is the information business, and even if you don't do work, providing information is a service.
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oh god that is funny..

good post pueblo. thanks.
 
While you are on this subject. Can somebody tell me what the legal issues are with starting your own business? A friend and I are interested in starting a small business and I am just curious what all you have to go through to register your name and all that fun stuff.

Thanks
 
Good luck man ... hope you keep updating this thread with updates as you go ... you could make a writeup of your experiences setting it up.

I have been doing freelance consulting for a couple of years now ... but nothing formally. My problem is I don't grasp management & finance so I basically do this to feed my hardware addiction.

Be proud of your work and it will be your best advertisement ... I find that I'm turning down jobs more more since I don't have the time ... some of my clients will even wait a couple of weeks until I'm free rather than bring their PCs to Best Buy or Micro Center ...
 
another thought on this. i am in DC and may or may not get into this same situation. with the way the industry is these days making some side money is sometimes a requirement ;) anyway, i think it might be a good idea for people to form a professional network here. RavinDJ is in the baltimore area. killerasp is in new york. i am in DC. etc. there is always a chance you are going to generate a lead that is out of your area and it would be nice to refer that person to someone else here who is looking for work.

-hopefully after some experience with the person here on the forums and after referring a few clients you would get an idea of how knowledgeable they are and whether it's actually a good idea to refer people to them
- you would hopefully get some business thrown your way in return
-you could take on big jobs you may not otherwise be able to handle alone if you call on another person in your area (like RavinDJ calling on me for example) to assist
-you do not actually need to share any business practices with someone; you can offer service contracts while someone else doesn't; this is a loose referral network except when you are actually calling on someone else to help you- in that case if you would need to work out the details of the partnership in advance

just some thoughts.
 
big daddy fatsacks said:
another thought on this. i am in DC and may or may not get into this same situation. with the way the industry is these days making some side money is sometimes a requirement ;) anyway, i think it might be a good idea for people to form a professional network here. RavinDJ is in the baltimore area. killerasp is in new york. i am in DC. etc. there is always a chance you are going to generate a lead that is out of your area and it would be nice to refer that person to someone else here who is looking for work.

-hopefully after some experience with the person here on the forums and after referring a few clients you would get an idea of how knowledgeable they are and whether it's actually a good idea to refer people to them
- you would hopefully get some business thrown your way in return
-you could take on big jobs you may not otherwise be able to handle alone if you call on another person in your area (like RavinDJ calling on me for example) to assist
-you do not actually need to share any business practices with someone; you can offer service contracts while someone else doesn't; this is a loose referral network except when you are actually calling on someone else to help you- in that case if you would need to work out the details of the partnership in advance

just some thoughts.
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now thats some [H]ard lovin.

that is what life is all about. to survive in the business world, its all about marketing and networking.
 
I was offered a job at respectable consulting firm here in NYC. They guys that own it are taking me out for some beers to talk it over. I was wondernig, how does salary work at a typical consulting firm? is it pay per project? per hour? salary?
 
big daddy fatsacks said:
another thought on this. i am in DC and may or may not get into this same situation. with the way the industry is these days making some side money is sometimes a requirement ;) anyway, i think it might be a good idea for people to form a professional network here. RavinDJ is in the baltimore area. killerasp is in new york. i am in DC. etc. there is always a chance you are going to generate a lead that is out of your area and it would be nice to refer that person to someone else here who is looking for work.
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Amen!

I am going to note down these names and locations just in case I get called for any of those locations.

I am definitely one to network with others, in fact, I have often wondered how many people on these forums are from South Jersey (Cumberland, Salem, Gloucester, Camden) areas that I can call on when I need additional help.

If anyone is interested send me a PM :p ;) :D
 
killerasp said:
I was offered a job at respectable consulting firm here in NYC. They guys that own it are taking me out for some beers to talk it over. I was wondernig, how does salary work at a typical consulting firm? is it pay per project? per hour? salary?
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We get paid salary at the place I work. If we work a lot of overtime or get stuck working a weekend we can take time off here or there and put it down as comp time. I have to say I would much rather get paid hourly with overtime though, if you do the math my hourly pay doesn't look so hot.
 
good news. i got the job.

now...they want me to decide how much i should get paid. what is the average salaray for entry level consultant? im thinking around $35k.
 
killerasp said:
good news. i got the job.

now...they want me to decide how much i should get paid. what is the average salaray for entry level consultant? im thinking around $35k.
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Congratulations.

I'd settle for $40,000 with room to grow.
 
Hey guys, this looks like an excelent thread and i hope it keeps growing. I just got out of high school and am attending a local tech college. I have been working at a local ISP for about two and a half years during the day and have built up a pretty good relationship with the local businesses. I have been doing some stuff on the side as well, and things with that are starting to pick up more.

Anyway, i have been thinking about starting a consulting/service and repair firm after i get out of college (1.5 years). I think i already can have a pretty good client base to start with but im not to sure on a business model and such. But its good to know there are others out there doing the same thing!
 
killerasp said:
good news. i got the job.

now...they want me to decide how much i should get paid. what is the average salaray for entry level consultant? im thinking around $35k.
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Will 35K in NY be good enough living? Ask for $40K and go from there ...
 
I've been consulting for over 10 years now. When I started, I didn't get the business license and state resale license. I just winged it. A couple of years later, I was told that the state was going to audit me. I was charging sales tax but not giving it back to the state. ;) Ultimately, they didn't pursue me, and I didn't have to pay out, but it scared me enough to get my ducks in a row.

Each city has different laws about business licenses. Contact your city hall. Some may not even require one for consulting type of businesses. And, if you're going to buy stuff at wholesale prices and re-sell it to your customers, you need to charge sales tax and thus you need a resale license. This comes from the state you live in. My state has tax offices all over, so it was easy working this out.

Anyway, do all of this research first before you even charge a dime. You'll sleep better at night and if you ever are audited (and it will happen if you're in business long enough), you'll be OK.

Good luck, and keep us posted!
 
killerasp said:
good news. i got the job.
now...they want me to decide how much i should get paid. what is the average salaray for entry level consultant? im thinking around $35k.
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Based on my old job, which was at a Microsoft, Novell, & HP/Compaq consulting company.. the fresh faces with little or no experience would come in at 30k to 38k. An assesment would be made after 6 months and most got bumped up over 40k. The top dudes were making 80k and above. This was in the metro/suburban Philly area. BTW congrats! :)
 
Fantastic thread!!! I've been researching a similar business idea here in my home town for a couple of years now. I was also suggested to put together a business plan before making any major moves as this will make sure that you're not just going where the wind takes you. I'll be sure to keep you all posted on how it goes here too!
 
jmroberts70 said:
Fantastic thread!!! I've been researching a similar business idea here in my home town for a couple of years now. I was also suggested to put together a business plan before making any major moves as this will make sure that you're not just going where the wind takes you. I'll be sure to keep you all posted on how it goes here too!
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Yep, I agree... great thread! I've been doing some consulting work on the side, but only recently have really, really gotten into it. So, I started my company in January 2004, even though the first few months nothing major happened. Only recently has it taken off, like I mentioned above.

In any case, I'll post a short history of how I started, what happened, good and bad, etc. I'll try to do that by the weekend. Good luck to everyone and keep us posted!

ALSO... I agree that we should all keep a contact and their location handy. You never know when you can be called on or when you'll really need an extra pair of hands!
 
I too am trying to get my foot into the consultant/contracting type of work. As of now I have a job lined up for a small company that will be moving to a new building. They have lost all the current hardware they used to have since it belonged to another company. They want me to find the costs on 25 computers, 5 low end training PC's, 10 midrange office PC's, and then 10 high end PC's that will be the most powerful to do Adobe Photoshop type of work.

I have compiled a list in Excel with tabbed sheets for each type of PC, explaining each hardware part, the cost of each part and the (total cost x quantity). For the training and midrange office PC's, I'm using Intel motherboards bundled with a CPU and Memory with integrated Video/LAN/Audio. They are cheap, and we don't need any fuckin expensive Dell's either. As for the high end PC's, I'm trying to find a good bundle deal on pricewatch for an nForce2 board that has all integrated neccessities, you know the rest.

I am trying to get my brother to help me write out a proposal, and I plan on charging about $200 labor for each PC, obviously this price will be negotiable. But keep in mind I will also layout the PC's in a network, the main server will most likely be running Windows 2000 or 2003.

In any case however, I need some good suggestions for networking equipment, switches, etc. We'll hire someone to install the T1 or Fractional T3 lines.

Any input is GREATLY APPRECIATED and best of luck to all of you out there! Obviously this is my first real shot at my planned career and its a bit overwhelming, and I can't even imagine doing something this big. I haven't done a project this large although I don't see how it is impossible. IF all things work as planned, I will try to establish a maintenence contract, maybe 24/7 tech support (due to the nature of their work, they work overnight). How much should someone for being on-call 24/7 get paid for a year?
 
i have been deploying shuttle boxen at my office because they are pretty powerful, really cheap, and come so close to being put together already. think about those as an option when here doesn't need to be 4 drive bays in the system.

for networking equipment, call dell. i have gotten some really good deals from them on switches and they are nice pieces of hardware. it's a whole other ballgame from their "dude, you're getting a dell!" desktops. i actually got 2 x 3348 managed switches plus the stacking kits for under $1000. you can't beat that with a stick. plus, i have wanted to kill someone calling for laptop and desktop support from dell, but for the powerconnect switches it's a different story. i had a guy actually walkk me through fixing my problem once, and then spend 20 minutes giving me a tutorial on all the other features of the switch and explaining STP.

anyway, i'm not sure you need to itemize prices by each piece of hardware. i've never done this so i don't know, and some clients might want more detail. but i would think showing them the final price (labor included) for each computer is the best idea.

good luck,
big boi
 
Yes in the previous office I saw that they were infact using Dell Poweredge servers and Powerconnect switches, looks like some heafty equipment!

Anyways yes, the final price is at the bottom of each sheet, and there is also another sheet in the entire Excel workbook that summarizes the final cost of all 25 computers, networking equipment, etc. The reason why I am listing each indiviual part is because they are paying for it, plus everything is being ordered from different online retailers so each different source should have a price to it so they know exactly how much and where the money is going to. Well, just trying to reduce the questions they ask.
 
A friend and I are thinking (when I say this we are serious) about going into business together. We are not in a hurry to rush into this since were both in stable/ well paid jobs. Were spending the next 6 months to a year getting are skill-sets to a desirable level. But we both realise that you will never make any real money by working for someone else, Be your own destiny and whatnot.

Were planning on offering Application development and IT support. On the programming front we will work for any company with the money. For IT support Were targeting SMB's, Also developing are own software portfolio (we currently have quite a few ideas). We feel that this could work very well for us because it would mean during periods where we are not busy, we will not be wasting are time doing nothing.

Education (which I don’t think is that important)
Me: studied 2 years of computing and a year of business and I’m starting a part time computing and IT degree this year.
Matt: Sports science, degree in computing.

Skills: -
Since were both good programmers (my forte is VB (learning .net at the mo) and ok at c++, he is very good with Java, web design and .net). On the IT support side were both not bad, able to small domain set-ups. I have a love for networking so I will focus on that area; he'll do the web programming. So we will be able to handle most tasks that a client could throw at us.

As I’ve said before that we are not just going to rush into this, were going to improve are skills and are cash-flow buffer (I’ve heard lack of cash is the main reason most start-ups fail). We get alone well together (not in a gay sense) and we both have no problems working night and day to make this work.

As you can see this is pretty much a brain dump as none of this is set in stone. We would like to offer services to consumers but don’t want to loose the company image as a consultancy. But would like to offer products/ services to household.

Edit: It's very unlike me to fill up a screen full of text on here, i guess that shows how serious i am about this.
 
MooCow said:
Anyways yes, the final price is at the bottom of each sheet, and there is also another sheet in the entire Excel workbook that summarizes the final cost of all 25 computers, networking equipment, etc. The reason why I am listing each indiviual part is because they are paying for it, plus everything is being ordered from different online retailers so each different source should have a price to it so they know exactly how much and where the money is going to. Well, just trying to reduce the questions they ask.
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you may be causing them to ask MORE questions though. the more they have laid out in front of them the more they will have to question. especially since you quote individual prices. were it me, this is what i would do- yes, list each component. no, do not list prices for each. dell does not list prices for each on your invoice, why should you? if they ask why a computer is expensive then say, oh it's this video card, i could go with another for $30 less, but you need to do task X with this and that is the best card for you.

list the price for each of the different models you're building. i would not put labor in seperately for the computers. multiply model price by quantity and there you go. for network setup list an hourly price and estimated number of hours to do the job.

others with more consulting experience are welcome to disagree with me on the billing.
 
MooCow said:
IF all things work as planned, I will try to establish a maintenence contract, maybe 24/7 tech support (due to the nature of their work, they work overnight). How much should someone for being on-call 24/7 get paid for a year?
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I am eagerly waiting for somebody who has an answer for this ... I also believe that the future (at least for me is in consulting).
 
primea said:
I am eagerly waiting for somebody who has an answer for this ... I also believe that the future (at least for me is in consulting).
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i doubt anyone will have an answer because i don't think this is realistic. we're talking about 1 or 2 man operations here right? are you awake all the time? or do the clients get your home number and will your phone wake you up? guaranteed it'll wake you up? what if 2 clients call at exactly the same time?

you are not netgear or dell and 24/7 support is something you do not want to offer. in my experience in shopping for consultant support here is what is offered:
-4 hour, 8 hour, or next-day response time
-purchase the support time in hourly blocks for a set rate; use the blocks up and buy more
-the firm usually requires a 2-4 hour block used up-front to come analyze your network so they know what they're walking into when you call with your hair on fire

what is it you want to offer with a support contract? reading a crappy script and not helping anyone like dell? or saying- i will come in and bust your problems out with personal, on-site service including access to all my skills, knowledge and tools? for the latter it is realistic to expect you will be at the site within 4 or 8 hours. charge more for the 4 hour response time. do not promise 24/7 unless you plan on moving a cot into their server room. you are competing against other firms that will be offering contracts like these, not some 24/7 phone wait on hold for 20 minutes mumbo-jumbo.
 
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