Storm Clouds on the horizon

[jhill7000]

The background: I am currently an Admin at a medium sized company. I do the infrastructure (cisco routers and switches), the security (ISA Server, PIX, Tipping Point, etc.) and the phone system (Nortel Meridian 1). I am also in school at nights to finish up my masters (information systems), plan on graduating next Fall. I have only been in my position for a year and have several years of on off help desk support. While in college I ran a computer service business that was successful enough to pay most bills, but I never put enough attention to it to develop it.

The Dilemma: My wife is still in school and will be graduating at the same time. She wants to move "back home" to have kids which we both want. The problem is right now I'm in Atlanta, a large source of IT jobs. Her home town is about 80K strong, not so much for the IT jobs. The closest cities are 2 and 3 hours away and only have about 250K to a half million, respectively, people at the most. I desperately have wanted to start an IT solutions firm. To be honest I developed a business plan and then saw that Matthew Moran has essentially the same ideas so this post is sort of to him, but open to all. There is already an established business there which is a typical IT provider and as Tun Szu suggests I have researched my enemy and he is formidable. Very good ideas this guy has. However; I know I will probably need to work at a company long enough for my wife to get a job and insurance so I have a few years still.

The question: Can I do it? What should be my plan of action? I WILL own a successful business one day, that is not the question. My question is what do I need to do now (a few years before it can become a reality) to position myself to succeed. Any insight will be helpful.

As always, thanks for your knowledge.

 

[ecobb]

Well, it sounds like you have the right attitude, and the fact that you're already researching and making preparations a few years in advance is an excellent move! I recently started my own IT business a little over a year ago, only about 90 miles from Atlanta as a matter of fact! Probably the most crucial thing I can tell you now, a couple of years ahead of time, is to start saving money. You will need, at the absolute minimum, at least 1 year's salary sitting in the bank before you start. If your wife is working, you might can factor her income into part of that, but you will need a good chunk of money to help get you through the first 12-18 months.

No matter how good you know your business is, no matter how superb your skills and services are, for the first year or so you will have to convince people to give you their money. The sad fact is, there will be months when you will have to have your savings account in order to survive. You may make $5,000 one month, but you may not make $500 the next two. Income is very sporadic when you're first getting started, and expenses are high.

Don't underestimate your competition, either. They may suck at what they do, but if they're the only one in town then that's all everyone knows and people will be reluctant to change. You'll have to prove that you're better (several times) before word starts to spread.

It's not all doom and gloom, though. After about the first year or so everything starts to pick up and you'll be alright. I made more money and got more new customer's in my 13th month of business than I did in the previous 3 months combined. I guess it's because you've been around, you're established, you've got several happy customers that are sending their friends to you. A lot of people won't try the "new guy" until you prove your here to stay...especially in the IT business. They don't want to rely on someone that may not be here in a few months.

As far as marketing goes, I highly recommend you get Guerrilla Marketing for Consultants. It has helped me in many ways, I wish I would have read it before I started my business. It would have kept me from dumping money down dead-end streets.

Hope This Helps!

ECAR
ECAR Technologies

http://www.ecartech.com

"My work is a game, a very serious game." - M.C. Escher

 

[mmorancbt]

Jhill7000

There is no reason, in my opinion, that you cannot quickly develop an income as a consultant/solutions firm. I don’t know your current income needs but let’s assume you need to make $5,000/month – that is attainable in a few months of focused marketing.

I would disagree with ECAR’s assumption that expenses are necessarily high. You should be able to start your business out of your house, most likely with existing equipment (if you are in IT, I assume you have a computer – although a laptop will become necessary). Boot strap everything.

You do not need flashy cards, four color brochures, big office, expensive copier, etc. If you are a solutions firm, you need to work at positioning yourself as an intellectual commodity.

Also, because you are willing to start slow – start your consulting part time. Niche yourself to firms you are comfortable with – 5-15 person small companies. Marketing involves visiting a business park – going door to door (shriek) and meeting people. That is the quickest way to pick up work short-term. As you expand, you may need to start marketing into those cities that are further away but remember that most IT consultancies do not beat the streets.

I’ve relayed this story before. I moved to my current city and set a goal to work no further than 15 minutes from my house and make $8k-12k/month – mostly telecommuting. I only marketed in a small geographic area and in 9 weeks exceeded my income goal and have not had a month earning less than that in 2 years. I work 28-33 hours a week right now.

I am in a large and growing area, so dynamic growth is definitely attainable. If you expanded your marketing to those outlying cities you could probably do the same. The local market will take a bit longer and may not have the same long-term income potential. But $5k seems attainable.

I do infrastructure design and rebuilt, strategic technology planning, desktop and server automation technologies, and custom productivity applications using Microsoft Office (document and report assembly and distribution). I don’t resell hardware or software. I don’t do any repair but sub-contract it occasionally.

My objective was simplicity, work-at-home, and clients with money and that are easy to work with. I do not EVER work with clients who fight bills, pay slow, or are difficult – it just isn’t worth the anguish. It is easier for me to simply find a new client.

Read some of my blog entries categorized under The Consulting Life.

http://blogs.ittoolbox.com/pm/career/

Good luck!

Matthew Moran (career blog and podcast below)
Career Advice with Attitude for the IT Pro

http://blogs.ittoolbox.com/pm/career

http://techcareerconsult.blogspot.com

 

[Sheco]

The yellow pages are delivered but once a year.

 

[jhill7000]

While I would love to say I get the deep philosophical reasoning of your cryptic message, assuming there is one. I can't. Please Explain.

To the others, thank you. I am always ready to gain what knowledge I can from those who have gone before me. I really have some reading to do. In one of my classes I have been researching the relationships between IT/IS departments. A portion of the disconnects that are seen are because most IT professionals do not "speak" business. Would you agree from a consultant stand point (I'm trying not to classify myself as a consultant, but it's the only universal word I could use)? If so what could I do to increase my vocabulary/knowledge.

 

[boethos]

You said that there was only one other company in the 8ok town. Are there others in neighboring towns that may be coming in to service those users?
One thing you could do, since you are in an I.T. program in a college, you could use that to your advantage. If you were doing a paper on computer services and solutions (hehe), you could go to that town you want to move to, and do a SURVEY of the customers there. Who is their current service provider, are they happy with them, what service would you like them to provide that they aren't, etc. Let them tell you how you can compete !! Building a business is meeting needs. And finding the niche is the key. Sure, you'll do the common stuff, but if you can go above and beyond (and it is doable with a good ROI) then you can compete. There's a lot to be said for customer service, but then standing around drinking coffee with your customers isn't paying the bills.
One more thing: Set your price and don't drop it for anyone. When you discount your own price, people wonder why (doesn't he know anything?) and if they can get it cheaper from you once, word gets around and others will want it that cheap, too.
In any business the ONE thing you are selling (whether products or services) is PERCEIVED VALUE. If you have a low hourly rate to get the business, then they percieve your value as low. Get the drift? Why do some people get $100 per hour when others only get $25? Because they can. and because they present a professional image, etc. to substatiate the percieved value. Who would you rather tell you about busiess, Larry down the street for $150, or Donald Trump for $1,000? The quality of the service speaks for itself. Don't discount it.

 

[Sheco]

Referrals from the yellow pages can be very important before you're client base is fully developed.

Unfortunately they only print the book once per year so you might have to wait a long time before your yellow pages advertisment is in the hands of potential customers.

 

[mmorancbt]

Long before I wrote, The IT Career Builder's Toolkit, I published an article titled, Why Technologist Must Learn To Speak Business.

http://www.cbtoolkit.com/consult/whytechnspeakbusiness.htm

This ultimately led to a career column and was the gestation for the book. It provides some guidelines for altering your mindset and your language with customers. Other than that, read a broad spectrum of books - not just technology books. In fact, for every tech book you read, add 2-3 general business articles and books. Throw in fiction occassionally. Be well-rounded in thought and conversation. The appearance of well-rounded intelligence usually indicates well-rounded intelligence. Clients are comfortable with that.

Also, boethos advice on rate is very good. I never strive to be the lowest price provider. Instead, I provide "qualitatvely superior solutions" and then charge for them. I try to position myself as a business solution specialist, not a technology consultant. There is a difference. If you don't recognize it, you are a technical contractor, not a consultant.

I am revamping my consulting, so there are people still looking over my site, but you can look at my consulting site to see the attitude and approach I am trying to foster.

http://www.kreativeknowledge.com

Nothing complicated. I don't have a customer portal or product pictures, or certifications, or industry awards, or blah, blah, blah. I am selling confidence in a business focused approach to solving business problems. Technology is relegated to its proper position as one tool of many used to build a solution.

In all honesty, I let people know that I don't really have competition. I have others who provide technology support and technology ideas, but they are only competition if I have failed to tell my story and to talk about my potential client's business. I am not trying to match them in technical prowess because I can buy that anywhere.

I just had a call this morning from a past employee (5 years ago). He is a senior developer for a very large company. His boss is moving to a new division and wanted to ensure my former employee was taken care of. He invited him to an executive networking event.

A large part of the reason was the way my former employee spoke about the business and solutions. He speaks in holistic, big picture terms. Due to this meeting he was asked to lead the company's analysis team and analysis training. He was asked to do this because they said, "We can hire coders all day long. What we cannot find are people who can think - who can define solutions. That is what you do."

Graciously, he told them it is because he was trained in Concept Over Process - my project development/analysis methedology - and he pointed them at my site and materials.

This is where the consultant needs to live and where you can absolutely distance yourself from your competition. It is, as I have have said for years, the "next hot technology!"

Good luck!

Matthew Moran (career blog and podcast below)
Career Advice with Attitude for the IT Pro

http://blogs.ittoolbox.com/pm/career

http://techcareerconsult.blogspot.com

 

[eyeswideclosed]

concept/process"
Sounds good but what if you're no good at the process part?
Good coders are important otherwise the best concepts in the world will go nowhere, and there are many kinds of coders. Concept is the easy part, then somebody's gotta make it happen.

If more than 1 goose are geese, why aren't more than 1 moose meese??

 

[Trevoke]

Instead, I provide "qualitatvely superior solutions" and then charge for them. I try to position myself as a business solution specialist, not a technology consultant. There is a difference. If you don't recognize it, you are a technical contractor, not a consultant.

What he said..

"That time in Seattle... was a nightmare. I came out of it dead broke, without a house, without anything except a girlfriend and a knowledge of UNIX."
"Well, that's something," Avi says. "Normally those two are mutually exclusive."
-- Neal Stephenson, "Cryptonomicon"