Small Business Computer Consulting

You need to be prepared to invest a lot of time into starting your own computer consulting business.  How can you be realistic about choosing the type of business that is right for you?

Franchises Are Not Guarantees

You might think that if you choose a computer consulting business that is a franchise, a lot of the work will be done for you.  While this is true with parts of the process, you still are going to have a lot of work to do.  For one, the franchiser is not giving you a pre-established client list.  If you want that, you will have to buy a current business, which can cost a lot of money.  Even if you buy a very small but thriving computer consulting firm, you can spend $300,000-$3 million dollars (or about that amount).  The amount will be a multiple of the annual sales.

What Are the Computer Consulting Start-Up Costs?

If you start your own computer consulting firm, you can do it for as little as a few thousand dollars.  You’ll basically need a business phone number and voicemail, a cell phone, business cards and legal licensing registrations.  And you’ll want to figure in the cost of meeting with an accountant and an attorney.  You will also need insurance.  A lot of times you can work out of your home office, which means less money.

Attention Control Freaks:  Steer Clear of Computer Consulting Franchises

When you buy a franchise, you give up some control.  You have to do things a certain way according to pre-set rules and regulations.  There is very little room for deviation.  Your company will be paying the franchiser a percentage of your revenue from now until … forever.  And you won’t get the same level of flexibility when it comes to taking your business in different directions as you would if you opened your own business.  

The Main Idea

Computer consulting has some start-up options:  starting an independent business; buying a franchise; buying an established business.  Ask yourself if you want to start from the ground, up or be handed a client list.  Just keep in mind that any start-from-scratch computer consulting business is more about time and sweat equity than money.

Added By:  Computer Consulting Kit

There are two ways of thinking about being a reseller as consulting firms.

What Is a Pure Consulting Firm?

Some consulting firms choose to be pure consulting companies.  They think they will never make any money off products and that there are some major conflicts when you get into becoming a reseller.  As consultants, these companies help clients decide what to buy, what the specs should be and they show them where they can buy recommended products.

What is a Purchasing Agent?

Another type of pure consulting firm is a purchasing agent.  When you do this, your firm does the purchasing for clients and bills them a couple hours for it.  Your firm gets reviews and quotes, places and tracks orders and handles the whole purchase.  These are more pure consulting functions than reselling functions.

What Are Hybrid Consulting Firms?

When you follow a hybrid consulting model, you do white box PC reselling (reselling PC clones).  A computer reseller that does this is selling generic desktops, servers and sometimes notebooks (called white books).   

Do You Resell or Not?

When consulting firms are deciding whether or not to resell, they need to think about how they want to spend the majority of their time.  If you are facing this decision, ask yourself if you want to pick up some additional profit from product sales or if you want most of your income to come from pure consulting money.  No matter what, you don’t want to lead off with product sales when selling yourself to prospects.

Can Product Sales Get Consulting Firms in the Door?

Many new computer consulting owners ask themselves, “Should I resell inexpensive PCs, cheap software and cheap peripherals to try to get into consulting?”  The answer is typically “No.”  

All of a sudden you will have shown customers that you want to be a commodity broker.  And most will not hire this type of person for consulting.   

If you want to be a reseller, relationships have to come first.  Consulting firms looking for great longevity should focus on relationships.  

Added By:  Joshua Feinberg

Thursday, March 20, 2008
9:00pm Eastern to 10:30pm Eastern

5 Proven Best Practices for Getting More Steady, High-Paying Clients

Free Preview Webinar, sponsored by Computer Consulting Kit™ Home Study Course

• Learn how you can generate more consulting business and attract more of the right kinds of repeat clients.
• Find out quick, right-to-the-point best practices for surviving and thriving in this challenging IT spending environment.
• Discover simple, inexpensive, fast strategies for generating better leads and closing more deals.
• Find out how you can get more long-term clients onto your client roster, so you can have that critical business predictability and recurring revenue each and every month.
• And much, much more!

IT specialists can work with non-profit organizations.  However, there are many more financially-rewarding arenas to occupy.  

The Pros of Non-Profits

1.    You can reach non-profits easily because they are part of trade groups and you can find public directories.  

2.    Working with non-profits as IT specialists is emotionally satisfying and gratifying because you are helping a cause.

The Cons of Non-Profits

1.    Thin profit margins.

2.    Possible bidding wars.  

Bidding Wars Explained

When you get into bidding wars for contracts, your firm becomes a commodity.  And when you bid against someone else’s specs as IT specialists, you can guess that your competitors could be falsely lowering the bid price and keeping you from making a real quote.  

Non-Profits and Government Bids

IT specialists will find that selling to private sector small businesses will be simpler than attempting to work with non-profit and government bids.  A lot of times, non-profit organizations and government entities have to take the quoted price.  

More Cons about Bidding Wars

When you are bidding on projects with non-profits as IT specialists, you don’t have trust, personality and credibility helping you very much.  The main factor is who can post the bond, follow the rules and be on time with the bid.  

You have to do a lot of non-billable work up front that in the private sector can go on a bill.  You will be doing a lot of researching, developing configurations and organizing.  And the contract might be a real long shot.  

Bid Smartly

IT specialists need to bid on non-profit jobs very wisely.  If you want to be competitive, you can’t bet your entire company on it.  Don’t spend more than 20% of your business development time and energy on chasing the bid.  Unless you are devoted entirely to non-profit organizations or government organizations, you are typically better positioned to focus on private sector small businesses.  

When you find a government organization that is looking for outsourced services specifically from IT specialists, you are going to have a better opportunity than if you encounter  someone just looking for hardware or a one-shot installation deal.  

The Main Idea

Non-profit organizations and government entities are better niche options for IT specialists than simply doing retail, but you have to be careful and weigh the pros and cons before getting involved.  

Blogged By:  Computer Consulting 101 Professional Kit

Computer consultants that want to test prospects to see if they are really potential long-term clients can use proving ground projects before signing any long-term agreements.  

What Are Proving Ground Projects?

For computer consultants, proving ground projects are the first projects they will complete with new customers that are not yet clients or steady clients.  Computer consultants can use this time to prove they know what they are doing and are dependable, easy to work with and offer great value.

The customers also use these projects to prove to computer consultants that their expectations are appropriate, they are compatible personality-wise and that the customer will pay for professional IT services.

Proving Ground Projects:  Be Observant

If computer consultants have a positive proving ground project experience, they are on the way to having a steady client.  Many times, computer consultants are not observant enough while doing the proving ground project and end up starting a relationship with a client that is a real problem.  They can’t let themselves get too excited about getting a new client and must look for the following signs:

1.    Does the prospect change his/her mind all the time?

2.    Is the prospect late for meetings?

3.    Is the prospect verbally abusive towards employees?

4.    Does the prospect believe that regular rules are non-applicable?

Computer consultants can’t rush into relationships until they appropriately qualify every prospect with proving ground projects.

Blogged By:  Joshua Feinberg