Small Business Computer Consulting

Terms of sale are what will keep you in positive cashflow.  As a new business you can’t afford to finance other people.  You need to keep cash flowing through your business so you have to set clear terms of sale from the start.

Terms of Sale Tips

• Don’t be too quick to give new clients credit. You can really get taken to the cleaners if your terms of sale include generous credit extension.  If you do offer credit, keep the limits relatively low until the client has built-up a solid credit history with you.    
• Always insist on written agreements as part of your terms of sale.  Verbal promises are for amateurs. Even if everybody knows everybody in your town,  you should insist on a simple one or two-page agreement that clarifies your role, responsibilities, and obligations.
• Always get a deposit check on any major project.  Require 25% at the absolute minimum and 50% if you can get it.  
• Bill weekly and not when you get around to it. A lot of people start off sending their bills out every week, but then they get really busy and it slows to every three or four weeks.  The reason for setting favoriable terms of sale is to get money into your bank account, not let your clients keep it in theirs.
• Always enforce your credit policies.  When you have a late payment, send past due notice or make a phone call to make sure the invoice gets paid.
• Make sure you have funds set-aside for the inevitable dry spell. Despite rigourous terms of sale you will have slow periods.  Don’t get cuaght with insuffienct funds.  

The Bottom Line on Terms of Sale
Setting appropriate terms of sale is an important function.  You need to understand your total capital needs and that includes monitoring your daily cashflow.  Make sure your terms of sale are such that you are not caught short.  When you do the work, you expect to be paid and the best way to protect yourself is by setting, and sticking by clear and reasonable terms of sale.

In this article, you’ve been introduced to terms of sale. To learn more about how you can improve your knowledge of terms of sale, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Before starting your IT consulting business, take the steps that will lead to your success. In this article, learn about three steps you should take before beginning your IT consulting practice.

Step Seven: Arrange Your Telecom Services

Get a business telephone number or a mobile phone or something that you can answer with your IT consulting business name so you sound professional. Don’t go too cheap and use your home phone number and a cheesey answering machine or it will really destroy your professional image.

Make sure you convey a professional image all the way.  The $40 or $50 a month you spend will be well worth it.

You should also get a domain name registered. Ideally, you should pick out your domain name and IT consulting company name at the same time so you make sure you get your first choice of a dot com.

Get your email and Webster-hosting ready to go.  Decide what physical address you are going to use.  Watch out for any home office zoning laws if you are going to be operating your IT consulting business out of your home.

Step Eight: Order Your Business Cards

Go either with 2 color or 4 color at this stage of the game. If your budget for business cards is 60 to $80 for a thousand cards, you should be fine.  Don’t go overboard on printing a ton of them.

If you do, your bound to decide to change your logo or address and you’ll be stuck with cards you can’t use. Get the minimum quantity. You can always get a reprint later. 

Step Nine: Set Up Your Sales Tax

If you are reselling products, you will need to get a sale tax certificate or sales tax collection receipt from the province or state you are located in.  It is one type of regulatory agency there.

You may want to open up some distributor accounts especially with the big two Ingram Micro and Tech Data.  Ingrammicro.com and techdata.com.   The big two distributors are XENIX, which just went public, and D&H.  You should also have a merchant account. You want to be able to get a credit card authorization for any sales.

The Bottom Line about IT Consulting
 
In this article, you’ve been introduced to IT consulting.  To learn more about IT consulting, click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Years ago, your clients never would’ve had a problem finding "takers" for old PCs. After your clients got four or five productive years out of PC systems, they may have given the PCs to employees or sold them to employees for pennies on the dollar. Alternatively, many others donated PCs to local schools, charities or nonprofit organizations.

Changes in PC Recycling

In the past several years, this has all changed. In the U.S., about sixty percent of households own at least one PC. Schools and charities have become so deluged with PC donations that many get more selective on the equipment they’re willing to accept.

In many areas, it’s even illegal to dispose of a PC in a dumpster. Rather, the PC needs to be recycled. So how do you accomplish this?

Finding a PC Recycling Program

Several PC recycling programs and resources can help you and your clients comply with various environmental regulations as you dispose of long obsolete hardware.

• Dell Asset Recovery Services — www.dellfinancialservices.com/solutions/asset_recovery.asp
• EIA Environment: Consumer Education Initiative (CEI) — www.eiae.org/
• HP Environment: Return and Recycling — www.hp.com/hpinfo/community/environment/recycle.htm
• IBM PC Recycling Service — www.ibm.com/ibm/environment/products/pcrservice.phtml
• International Association of Electronics Recyclers — www.iaer.org/

If You Still Can’t Find One

If any of the PC recycling resource addresses above are invalid by the time you’re using this list, start at the home page of the website and look for links related to asset management, disposal or recycling.  You can also try the website’s search function or site map to look for PC recycling information.

The Bottom Line about PC Recycling

In this article, you’ve been introduced to PC recycling. To learn more about PC recycling click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

As a new IT consulting business, it is important to learn about the most common mistakes made with time tracking and invoicing so you can avoid them.

Doing so will put your company in a better overall financial position.  You will also be able to sleep better knowing you have greater financial control over your business.

Time Tracking, Billing and Other Issues

Time tracking, billing, invoicing and dealing with credit and collections are big issues in IT consulting.  A lot of people wonder which software they should use for time tracking and billing.  If you’re just focusing on that, you’re probably missing the bigger point here. 

It’s a heck of a lot more important than the software you use. Of course you should use a piece of software that makes it a little easier to do your IT consulting job, but the software is not going to fix the underlying problems.

Your Service Gives IT Consulting Clients Peace of Mind

Steady clients will perceive your IT consulting business as an insurance policy.  A steady client is motivated to pay your IT consulting business on time.

There’s a tremendous fear that if they forget to pay your invoices on time, when they have a network emergency, you’ll forget who they are.  These are the clients you want to seek out.

The Bottom Line about IT Consulting

In this article, you’ve been introduced to IT consulting. To learn more about IT consulting, click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

If you’re about to start recommending that your clients buy extended service plans for new notebook PCs, be sure to get a written statement detailing what’s included and not included.

Unfortunately, PC vendors won’t always tell you specifically what’s not included. Sometimes, you’ll only be able to surmise what’s missing by comparing written warranty statements from different PC vendors.

Hazard Coverage

For example, most notebook PC vendors specifically exclude warranty claims arising from obvious neglect issues, such as spilling liquid on a notebook or dropping it. Other notebook PC vendors, for a hefty price, may cover such calamities under limited circumstances.

Also, consider whether your clients’ end users will be traveling with their notebook PCs. Unlike their desktop PCs, which likely stay relatively stationary throughout their life cycle, notebooks go "on the road" a lot.

International Coverage

Some notebook PC vendors include international warranty coverage in the base price of the extended warranty. Others charge extra for this supplemental coverage. Regardless, if your clients’ end users of notebook PCs travel abroad, be sure to ask about specifics.

Just as with a desktop PC, find out whether the notebook PC extended warranty is on-site, whether technicians come to your clients, or whether your clients will need to ship their notebooks back to a service depot for warranty work. Also, ask about promised response times and estimated turnaround times.

The Bottom Line about the Notebook PC

Make sure you have reviewed a price list of available notebook warranty upgrade options.   Also, examine the related terms and conditions of what is and isn’t covered under various warranty upgrade plans.  Find out if the notebook PC warranty limits coverage under certain circumstances.

In this article, you’ve been introduced to the notebook PC.  To learn more about the notebook PC click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Since micro small business often rely on internal gurus or free help, many IT consultants find the sweet spot small business ideal for computer consulting. In this article, you’ll learn what IT consulting rates are appropriate for this group. All rates are in U.S. Dollars.

The Sweet Spot IT Consulting Rates Range

The sweet spot of small businesses is where everything starts to open up, and unless you’re working with companies where your competing against a moonlighter or gurus, it can go anywhere from 50, to 75, to 100 dollars, 125 dollars an hour on up, depending on your skill set, your niche, and your geographic area.

No one that wants to project a professional image working with micro or sweet spots small businesses should be coming in at anything less than the 75 up to 85 dollars an hour range.

Know Your Rock Bottom IT Consulting Rate

75 to 85 dollars an hour should just about be your floor, and you should only really get to that level when they’re committing to you for a large block of time, or, retain your service agreement on an ongoing basis. Anything below that your going to see when you figure out what your expenses are of running your business.

The Bottom Line about IT Consulting Rate

In this article, you’ve been introduced to IT consulting rates.  To learn more about IT consulting rates, click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

In IT consulting, what does a $75 an hour consulting business equate to in the long run? What happens if your rate structure extends beyond that?

If you keep carrying something like a $75 or $85 level beyond the grand opening special to get your first couple of clients, your business will become more of a hobby or non profit-type organization.

Consider Overhead and Expenses

You say, "How can that be? Why doesn’t $75 an hour equate to $150,000 a year?" Wrong, $75 an hour in running your own IT consulting business doesn’t come out to $150,000 a year because you can’t bill 2,000 hours a year.

New consultants often fail to consider all the overhead and expenses that usually come up as an IT consulting business matures. The uninformed person just starting out usually believes that $75 an hour times 40 hours a week times 50 weeks a year is $150,000 a year in IT consulting revenue because they think they’re going to bill 40 hours a week every week.

Know There Will Be Inconsistencies

It’s not going to happen unless you’re working 100 hours a week, and it’s probably still not going to happen every week consistently, for many reasons. Starting an IT consulting business sounds great on the surface. You’re thinking, "I’m going to work from home. I’m going to keep my overhead as low as possible."

Consider Your Utilization Rate

You need to consider what’s called your utilization rate. It’s the reality of only being able to bill out, on average, about 75% of the 40 given hours in a week. It still can take you six months to a year to even get to that level consistently.

The Bottom Line about IT Consulting

Finally, one of the most important things new IT consulting businesses overlook is the question of what happens as your business grows and you want to scale up?  In setting your rates, you need to consider these factors.

In this article, you’ve been introduced to IT consulting.  To learn more about IT consulting click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Before you even print up your business card or pick your company name, you need to know where you fit into the whole competitive marketplace of IT support. You don’t want to make a lot of expensive mistakes so you don’t take up a lot of money and time to fix later on.

Where do Micro Small Businesses Get Their IT Support?

Micro small businesses have 1-10 PC, anywhere from 100,000 to a million dollars US annual revenue.  Where do they get their IT support, number one answer: internal gurus.

Also, on that list are independent hotlines, 1-800 numbers, 900 numbers, from different hardware vendors, software vendors, ISPs as well as independent vendors.

That’s where you will see services that charge anywhere from $1.99 to 2.99, 3.99 a minute whatever it is there.  They go to a lot of different websites and forums.  Both vendor website forums, as well as independent website forums looking for help.

Micro Small Businesses Use Volunteers for IT Support

The huge thing about micro small businesses is that they depend on volunteers.  These businesses have a PC-savvy friend or family member, who does their IT support for free.

They may be annoyed that the brother-in-law that happens to know about computers can’t get there until a week from Saturday, but heck, its free.  He works for beer, pizza and donuts.

How Do You Compete With Free?

Well, It’s hard. But you can use micro small businesses as stepping stones. Micro small businesses get their IT support from the system builders, too.  White boxes system assemblers basically put the system together out of brand name parts and assemblies.

Sometimes they’ll get support from retail store clerks 6-$10 an hour store clerks who work in consumer electronic stores, supply stores as well as telesales reps for basically the mail order equalivant of those companies.

The Bottom Line about IT Support

In this article, you’ve been introduced to IT support.  To learn more about IT support, click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

In starting an IT consulting business, make sure you avoid extended "freebie mooching sessions" disguised as sales calls.  Make sure you’re not there for endless hours of brain-picking that’s leading nowhere.

You need to know exactly which kinds of prospects to focus on at all times. This will drive your qualification process toward the larger sweet spot small business clients.

Who to Talk to

For your IT consulting business, you need to know what kind of prospects you should be talking to at networking events. You should be sizing up people within the first 30 or 60 seconds of the conversation.

Find out what they do, what their company is like, do they have and use computers, and how many computers they have. These are three or four key questions that will determine, very quickly, whether you’re talking to someone who’s got a future or whether you’re completely wasting your time.

Get an Accountant

Do not try to become an expert on tax code. Get a good accountant early on. That can also be a really great referral source, not only for their business, but for your IT consulting business.

The Client Acquisition Business

Remember that, when forming a new IT consulting business, you are not in the technology business; at least not for the early stages of your business. You are in the client acquisition business.

As your IT consulting business grows, your focus is going to be more on providing technology services to those clients, but in the early stages, don’t worry about keeping up with the latest and greatest IT stuff.

The Bottom Line about IT Consulting

The most important thing for your start-up IT consulting business is finding good, solid, long-term, high-paying, steady small business clients in that sweet spot.

In this article, you’ve been introduced to IT consulting.  To learn more about IT consulting click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Can you strike up a conversation with a stranger? Do you wake up on the right side of the bed every morning? Do you show up on time? All these variables will be important in your success as an IT consultant. 

IT Consultant Traits: Are You Extroverted?

Computer consulting is very much a people business. You need to be humble; you need to be able to ask for help.  You need to be extremely passionate about what you are doing.

It is a 7 day 24. The good thing about it is if you get the right kind of clients once you are doing this full time, then most of them are 9-5 or 8-4 types of shops and for the most part you are not going to get called in the evening. 

IT Consultant Traits: Are You Patient?

Starting up a business like this is not an overnight success.  Its all based on relationships and it can take anywhere from 3-6 months to get enough of them going, and a lot of times 6 months to a year to get enough of them going to build a solid consulting business that can support you on a full time basis.

Yet, you need to start somewhere. If you keep procrastinating it’s just going to take longer and longer.  Be realistic and be patient.

IT Consultant Traits: Do You Have a Positive Outlook?

There will be good days and bad days. You need to feel strongly and passionately about your business, growth and plan that you stay on track. So you are having a bad day you pull out your plan and you see where you are and what direction you need to go in.

A positive outlook yes you are putting your head out there.  There are going to be some tough days, but tomorrow is going to be better.  Can you just shake it off and move on?

IT Consultant Traits: Are You Reliable?

You need to be self-driven; nobody is going to be sitting there flogging you everyday.  You will not have your boss.  You need to be motivated by your inner drive.  You might get some praise, but no one is going to be clapping for you.

The Bottom Line about IT Consultant Traits

In this article, you’ve been introduced to IT consultant traits.  To learn more about the IT consultant, click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.