By the way, you might notice that my response to this email was pretty long. It’s funny because I thought I’d be giving the guy a really high-level reply, but, as I got into it, I just kept on writing. This was definitely one of the most interesting questions that I’ve been posed in a while.
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TM wrote:
Hi Marquis,
I’m very impressed with your blog! A ton of info on several topics! I’ve read a couple of your posts on consulting and would like more info.
I’m hoping you can help me decide if I want to start planning to quit my System Admin position I’m at now and go to full time IT consulting on my own – probably in a year or two from now after I save up some cash.
I’ve got about 7 years of experience and a BS from Indiana University in Management. I’ve got broad IT experience covering a lot of different aspects of IT. One and a half years of helpdesk experience, 5 years of desktop support/management for multiple offices spread out in Indiana and now over 6 months of datacenter management. I’m CompTIA A+, Network+, and Security+ certified. I’m working to get the CompTIA Linux+ and MCITP certs by the end of 2013.
I see myself supporting small offices in a metro area with about 5-30 users providing desktop/laptop/mobile device support, network/storage support and more. Do you know of others that do well in this scenario? I currently live in Indianapolis, Indiana. I’ve been toying with the idea of moving to another city, but who knows…
I’d like to get details on what marketing skills, business management, what technical know-how I should have, and everything else I should come to expect starting out. I’ve been struggling to find up to date information. Do you know of any books that could provide such detail?
Thank you!!!
TM
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My response:
Hi TM,
Thanks for checking out my blog and reaching out to me with your question. I’ve written a lot of posts about consulting over the past several years, so, if you haven’t perused all of my archived entries yet, I’d recommend that you do so. There are probably quite a few nuggets of wisdom that may be helpful as you think about launching your own consulting firm.
I don’t know of too many people who have launched consulting firms that provide IT support services, but that isn’t because that isn’t an interesting area to focus on. It’s more a factor of me not having a lot of IT support-focused folks in my network nowadays…that would have been a different story 10 years ago. That said, I have heard of several folks in my hometown back in Virginia (where there is a US Navy base) successfully launching consulting ventures like this to serve the different government and defense contractor offices, so there is definitely a precedent for the type of business that you’d like to create.
Since I don’t have specific knowledge of the area within the consulting sector that you’d like to focus on, I thought it might be helpful for me to offer some high-level comments on areas that you might want to consider as you develop your thinking in advance of launching something:
- Building up your savings in advance of launch: You mentioned in your email that you want to take a year or two to save up cash, which is a must-do for this sort of thing. I wanted to call attention to the importance of growing your savings as much as possible before taking the entrepreneurial plunge because you will likely, not only have to live off of these funds, but also rely on these funds as working capital to pay for equipment, certifications, and services that will be necessary for your venture to be successful. The last thing that you want is for your business to fail because you didn’t have enough savings to ride out any storms that might come your way. I’d recommend that you save up at least a year of living expenses (if not more) before quitting your job to launch your company.
- Determining the “right” services and associated pricing: Based on your background as stated in your email, I’d imagine that you would be capable of offering a wide range of services to clients if you were to strike out on your own, but all of those services may not be called for depending on your target customer segments. For example, the data center management expertise that you’ve developed more recently is great for larger clients, but, if you’re going after smaller clientele, that capability might be irrelevant to those smaller entities. The last thing that you’d want to do is market yourself as being able to offer “the world” to clients and end up scaring off clients whose needs may be relatively simple or easy to address. Also, make sure that the services you offer are ones where your expertise is completely bulletproof because you will be relied upon as the absolute “security blanket” for your clients. You don’t want to position yourself to possibly not be able to answer any issues or concerns that your clients might raise. One particularly important item to focus on is determining the “right” price for each of your services. You’ll have to find a balance between charging rates that your customers are willing/able to pay and that will provide you with enough of a margin to keep your business going while reaping some financial benefits. This can be easier said than done, so I’d guess that you’ll have to do some extensive research on this to make sure that you don’t price yourself out of business.
- Figuring out the best market/customers for your services: You could have the perfect set of service offerings for your skill set, but, if you target the wrong customers, you’ll end up floundering. It sounds like you’ve put in some thought in this area in terms of the size of company that you want to serve, but I want to push you to dig deeper and flesh this out more. It’s nice that you want to focus on companies with 5-30 employees, but there’s so much more that you can put into your determination of the right customers. Do you care what industry/-ies your clients work in? Would you want your clients to have a certain type of technology to be supported (Windows vs. Mac; Cutting edge technology vs. older systems only running Windows XP; iOS vs. Android vs. Blackberry mobile devices)? If you put some rigor behind your customer segmentation, it’ll be much easier for you to ensure that you’re going after the right market(s) for your business.
- Business development: Once you know who your customers should be, you’ve got to be able to reel them in and get them to sign on with you. Business development is something that you’ll have to get right early in order to give yourself a good launching point, but you’ll also have to stay on top of it on a continual basis in order to maintain and grow your business. You could be the most talented IT support guy in the world, but, if you slack on biz dev, then you’ll end up with a failed venture. Also, you mentioned that you’re willing to move to a different city to start your business, but I’m not sure if that’s a good call. It seems like you’re an “Indiana guy” through-and-through and, as such, you’ve probably got tremendous networks in the Indianapolis Metro area. This will be incredibly helpful as you try to build up your initial client base. Imagine going to a brand new city and having to build up a network of leads from scratch…that would be very difficult. I’m not sure if you’d want to sign up for such a tough task.
I recognize that the items above aren’t an exhaustive list of things that you should be thinking through as you consider launching your own firm, but I do believe that they’ll serve as a good starting point. As you dig into these ideas, you’ll likely find that other ideas will pop up that you hadn’t thought of yet and, hopefully, you’ll end up having taken a very comprehensive view of everything before taking the plunge. In this economic environment, walking away from a job with a salary to take on the risk of going into business for yourself is not a move that should be taken lightly.
On your final question about recommendations for books that could teach you some background on different business topics, I can’t think of any except for my business school textbooks, which might be a little dense to get through. Since I did a full-time MBA program, I don’t really keep track of different primer books on that stuff anymore.
As an alternative, you may want to check out something called the Personal MBA (http://personalmba.com/), which I learned about through an article on CNN Money a few months ago. The program was pulled together by someone like you who wanted to learn about business topics, but didn’t want to spend the money to enroll in an MBA program. I don’t know anything about the program other than what I read in the article, so please don’t take this as an endorsement or advertisement for it. I just thought it might be the sort of thing that you’re looking for to build your business knowledge.
A few other links that you might want to check out are:
http://www.moneyspruce.com/personal-mba/
http://www.investopedia.com/articles/professionaleducation/08/alternatives-business-school.asp#axzz2MnQoj1VG
Again, I must state that I don’t know a whole lot about the Personal MBA program and am not endorsing it, but, since you want to jump right into entrepreneurship and seem willing to do self-study, it could be a good option for you.
Hope this helps. It might not have been the prescriptive step-by-step guideline that you were seeking, but I trust that my comments can provide some good input to help with your thinking.
Marquis
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