So You Want to Start Your Own IT Business?

Great!

But obviously you have a lot of questions, mainly, Am I Ready?

Well there is no easy way to answer that question, in the end it comes down to who you are, a little bit of luck, and preparation. I started my IT business with about 1000 dollars, five friends and no preparation, to be fair I was still living at home and had most of my expenses covered by my parents. Over the years my business has grown, probably in part to the incubator period and relative protection of that environment. Most of you will probably not be as lucky as I was, and to be honest, despite this advantage,  it was still no cake walk.

I think the questions you need to answer before taking the plunge can be divided into two general categories, business sense and emotional fortitude. In my opinion you really need to have a little bit of both. So whether you just had the idea yesterday or you’re seriously considering leaving your job tomorrow, at the very least, make sure you ask yourself the following questions.

Do I Have Enough Money To Do This?

There are a lot of costs associated with running any business, the IT world is no exception. You need to factor in the costs of advertising, purchasing supplies, uniforms (maybe?), legal costs, the cost of setting up your workshop or car, not to mention your phone bill, utilities costs, business registration and rent/mortgage!

If you were previously working, chances are you have saved up a large sum of money, say maybe 10,000k AUD. Assuming you spend $500 dollars a week keeping yourself alive ( rent, phone, internet, utilities, food) you have 20 weeks before you run out of money.

This may seem like a lot, but it can disappear very quickly!

Lets assume for the moment that you take out an ad in the local paper for $500 dollars, you purchase  some basic supplies ( Ram, HDD, Motherboard, Testing Gear etc. ), perhaps $400 dollars. You also decide you want a shirt with your logo on it $50 dollars, and you visit a cheap lawyer who makes you some contracts and gives you some advice, $400 dollars. You decide to have a home office which costs about $500 dollars to convert after you replace the furniture, and make a usable workspace for fixing computers.

So where are we so far…. $500  + $400 + $50 + 500 = $1,450.00

So you’ve spent nearly 1.5k , down to $10,000-$1,450 = $8550.00 or just over 17 weeks, assuming nothing breaks like your car or your leg!

Now running a business comes with certain extra costs, for example insurance, perhaps a mobile EFTPOS machine, an accountant and much more!

For the sake of argument lets say you have 15 weeks of savings left once you buy everything you need to get your business going, including any services (such as a phone, insurance, and internet plan) covered for about 1 year.

So, assuming you don’t need to spend any more money on advertising, or anything else you have 15 weeks to be making  over $500 dollars every week from your business.

Is that enough time?

Can You get that growth rate – Will that cost extra in Marketing ?

Can you sustain that level of work?

Will you even get that many customers?

Say you charge $80 dollars an hour and manage to bill $300 dollars of work in your first week! (Well done!) Chances are the people who called you this week are not going to be calling you next week, in fact to have a stable income of over $500 dollars a week, you may need a database of thousands of customers.

Am I trying to scare you? Well, a little – but better me than a debt collector!

It comes down to this, how long can you afford to build my customer base?

As I mentioned earlier the other quality you should have is emotional fortitude! Do you cope well under pressure?, say when a client yells at you for doing a bad job, demanding you pay him a refund ( it happens!), or when someone simply refuses to pay ( that happens too!) or when you get conned by a professional who absconds with a laptop and your self respect ( that happened to me! )

Can you cope with the uncertainty, not knowing when or from where your next pay check is coming ? Recently my business went for an entire month without a single new customer, and we’ve been running for over three years now. It happens to everybody, at some point it will happen to you. Can you cope with financial uncertainty? At the very least you may have to change your lifestyle to accommodate your change in income from week to week, this is especially important to remember when signing up for contracts. ( Do I REALLY need that new iPad with the 2GB/month data allowance?)

Another often overlooked but important area is the effect this uncertainty will have on others, particularly your family, Can your family cope with the emotional rollercoaster? At the end of the day, this is what it is like when you run your own business, you move from success to success, failure to failure, idea to idea so fast that it can sometimes be difficult to take anything in. Without a doubt if you are successful you will have to deal with long hours, unexpected problems and possibly difficult staff. Remember you’re the boss now, it falls on you to fix the problems, not to mention bare the liability.

So by now you may be asking, So wait, why does anybody do this again?

Well for me that’s simple, I love developing something bigger than myself, for me, honestly it’s not about the money. It’s about creating, sharing my ideas, improving and always learning, oh and I love being my own boss. But hey, that’s my drive,  you have to find your own, maybe you want to take on Apple, maybe you want to challenge gender stereotypes, maybe you want to sleep in on weekends (not so good!) – Whatever it is you have to be sure it will drive you, drive you to persevere in the face of everything I’ve talked about – money, uncertainty, people telling you not to risk it, (that happens A LOT), stress, happy clients, bad clients and STRESS(again) So, What’s your drive? Will it get you out of bed to deliver brochures, deal with headaches, make plans and above all, keep going?



James Gilbert

About the Author

James Gilbert
More articles by me...
James has always had a passion for trying new ideas and taking risks, he hope to share with you his enthusiasm for IT and pass on practical ways you can grow your business. James been running his own IT business for over three years now and in the past he have dabbled in everything from international imports to hand made wheat bags.

Comments (12)

  • Victor Nunez says:

    Good Pointers wish i would of ran into technibble when i first started fixing computers … i would of set in stone everything more smoother like pricing for my customers and the most important thing is getting their information down so u can advertise directly to their home’s…. a post card , flyer .. or whatever it only cost like .25 cents to 45.. but if they come back for a service your guaranteed to make your money back.

  • NETWizz says:

    Yeah. Starting a business is crazy hard. That’s why I haven’t done it. Working for someone else can be pretty comfortable as an IT person though. For example, I spend about $800 a week staying alive rent, utilities, bills, etc., and I can still save money!

    It would take a LONG time to build up that cutomer base, and I think it would be harder working for customers than my current employer.

  • Great article James, I agree with a lot of your points. You really just need to stick with it and have the passion for the business.

    However, I think the cost of entry into the computer consulting business can much less than most people think. I started my computer business part time while working a day job. I built it slowly and I only put money into the business that I earned from fixing computers. In that way, I invested nothing and there was very little risk in this approach. When I starting running my business full time, I already had the basic infrastructure in place to where I could concentrate on growing my customer base.

    Of course not everyone has the luxury of growing a business in their spare time while working full time. In that case, there will be some start up costs and investment in advertisement will be necessary to build a customer base.

  • Joe41225 says:

    In my case, the industry that I was in was eliminated here by cheaper goods from China. I was out of a job feeling scared and unsure of myself. And while I spent years in IT, I didn’t know how I would compete with my lack of higher education. At the lowest point, I studied for and received my Comptia and Microsoft certifications. I then started going business to business with fliers that I just printed from home. On the first day and very first office building I went to, I got a big contract. I’ve been doing this since 2004 and have never looked back. I have never spent a cent on advertising other than that one time printing fliers from my house. All my jobs come from referrals and I only work with businesses. I also found a niche market for myself using the skills that I have acquired over the years working in my industry.

    If I can give anyone advice it is this:

    1.Always be well groomed and friendly.
    2.Never take your personal problems to work and keep politics and religion out of conversations.
    3.Network with others (VERY IMPORTANT)
    4.BE PAITENT with slow people. They will be your biggest supporters.
    5.Be On-Time
    6.If you can’t do step 5, then call ahead and let them know ASAP. People will understand if you are honest.
    7.Stay away from clients that give you a bad feeling. Go with your gut instincts.
    8.If you have a particular skill set, try to market that.
    9.If a client gets angry, keep your cool and let them vent. 99% you will not get fired.
    10.Don’t be desperate with your pricing.

  • Tony says:

    I have consulted many people starting a new business, not necessarily a computer business.

    If you are thinking about it while working for someone else there are concrete steps you can do now to make it much cheaper and much easier later when you take the jump.

    For example: most of us have a car/truck/van

    When you trade vehicles next time, get one that is economic (above 30mpg) and clean looking and doesn’t bust the bank. A handsome light colored MiniVan or Scion tc are economic and great for putting your information on and making a moving bill board. You have the room in them to store a small amount of tools and inventory to do on the spot repairs. They look clean and professional and add to your credibility as a technician. Showing up in a Corvette might be fun but actually hurts your credibility.

    Get ready for for the jump. You might have low pay for a few periods so get your bills into order. Pay double payments on your student loans, visa and car payments until you are debt free. Not having those will take a significant burden off your shoulders

    Just like paying off cars and student loans prolongs your ability to survive while you figure things out and start to make real money, if you can live at home with your folks, a girl friend, sister/brother or even frat brothers whatever…those payments you don’t have to spend are like money in the bank.

    Of course you must make sure you can fix most every type of software problem and hardware problems. If you have no other way to get this, then start part time and build that experience with jobs you take from your friends and relatives or doing small scale business opening part time.

    $200 buys all the tools you will likely need and use as discussed on many tech-nibble forums. Most of the valuable tools are free.

    The biggest issue is figure out how and where you are going to get customers. DO not assume that $500 ad will keep you working. You need to put yourself where people are likely to go when their stuff breaks. Optimized web site gets some free leads, yellow pages in many cities are affordable, index cards in super markets, dry cleaners, coffee shops and laundromats might help as well.

    After 17 years doing this, advertising is still the big unknown that I continually experiment with.

  • John says:

    I started my IT Business 12 years ago when I was 13 years old with 20 bucks in my pocket, a summer break off school and Flyers!

    What gave me my boost was the friend of a newspaper columnist recieved my flyer on her mailbox. She thought it was cool enough to send it to her friend at the newspaper. So they did a story on me entitled “The Next Bill Gates”

    So 12 years later and client list of 50 or so I’m still running my business with 4 customers staying with me from the very beginning.

    At times I think I’m running my business is a inefficent way. I have learned everything I know about computers by trial and error. Luckily, i’ve never ruined a clients computer. Technibble has helped me alot!

    My business has been a great way to make money to live on while i’m in college. It was really nice to have money in high school. I have no desire to expand after college. I plan to keep my website clients and a few consulting clients when I get a real job, Maybe one day, I will go back into business for myself. For now, I’m tired of all the requirements of being a business owner.

  • Paul says:

    “If you were previously working, chances are you have saved up a large sum of money, say maybe 10,000k AUD.”

    Why on Earth would you pass up a job that allowed you to save ten million dollars in startup capital?

  • Great article James. We started I.T. Monkey in Ireland in 2009 and it really is all about taking the plunge and building a customer base. If you accept from the start that you’re probably going to have a tough few years (financially & emotionally!) and stick at it you should get there in the end. Love the articles on Technibble keep it up!

  • Tate says:

    Those are great points. I started my computer repair business with only $200 bucks in my pocket. Ask me how!

  • I’d just like to add that even though you’ve figured out your timeline on when you’ll run out of money, you can still have months (like this month) that just about kill you. Have as big of an emergency fund, business and personal, as you can afford.

  • This is a really good notion. Stay On writing!

  • I’ve been running my business and working as an network technician at a bank – both at the same time for over 3 years now. It’s been hard keeping up with both, but luckily my job at the bank allowed me to work from my computer repair shop several days a week. I’ve hired several entry level technicians who do the easy virus removal, data backup, and system reinstall kind of stuff. This, combined with getting up early and staying up late has flourished my business to the point at which I could comfortably quit my bank job.

    I finally put in my two weeks notice two days ago! I can now devote 100% of my time to my business! THANK YOU to MY CUSTOMERS for sticking with me through my though times and my busy days. I’m very excited and am looking forward to providing the best computer support services to small businesses and residential customers in the Portland, Oregon area. Wish me luck!