Small Biz Tech Talk ™

A lot of people involved in information technology consulting truly believe they can’t really get started until they’ve managed to get 20 certifications or more.  They seem to think they won’t be considered legitimate in the world of information technology consulting unless they are highly decorated.  This couldn’t be further than the truth for the following reasons:

1.     Small businesses are typically not using the latest technology.  Most businesses are not even going to know what your certifications mean let alone care if you have that many because they will be pretty behind – often about two years – when it comes to technology.  

2.    A lot of technology for small businesses is pretty outdated.  When you work in information technology consulting with small businesses, you’ll usually be working with a lot of things that need updating … but chances are, you won’t be able to update it all because they just don’t make small business technology that is cutting edge.  

3.    There are other skills that are much more important to information technology consulting than technology savvy.  If other people come to you for computer advice, if people ask you to help them with their gadgets and you generally are known for knowing your stuff and being a real resource, your certifications aren’t going to mean a thing.  

4.    Information technology consulting skills are very variable.  Even if you have very junior (or very senior!) skills when it comes to computer skills, there will be a place for you in small business information technology consulting.  

Added By:  Computer Consulting 101 Professional Kit

In order to have a successful IT consulting career, you need to have a variety of technical skills.  But even more important than technical skills is business savvy.

Just Say “No”

As you start your IT consulting business, you will get a lot of strange service requests.  People will waste your time with proposals that make no sense and will not have the money to pay you.  Learn to say, “No!” to these people, or you will find yourself struggling.    

Banking and Merchant Accounts

Setting up a business bank account is necessary.  If you want to resell products, a merchant account will be needed so you can take credit cards as part of your IT consulting business.  

Managing Money

You need to get paid well and fast.  You will need to know how to calculate expenses, balance a checkbook, deal with credit and collections and handle a billing and invoicing system.  

Tracking Prospects and Clients

You have to pay close attention to your IT consulting clients and prospects.  Set up databases to track them with off-the-shelf products.  

Delegation is Key

Even if you are going to run your own IT consulting business for a long time, you need to do some skill delegation.  At some point, you will probably work with some business partners, contractors and you will definitely be dealing with vendors.  Know when to pass off work to other IT consulting professionals.  

Submitted By:  Computer Consulting 101 Professional Kit

If you are thinking about a career in computer consulting, you are probably currently working in a PC support position in a company either large or small.  What do you need to know to handle computer consulting startup?

There are hundreds of people starting their own computer consulting businesses today, and all of them have decided they both need and really want to go out on their own.  You shouldn’t invest lots of time getting IT and business training and spending a lot of money on computer consulting startup unless you know you really want to get started.  

Why Computer Consulting?

People have differing reasons for getting into the computer consulting field.  Your reason for getting involved might be gaining more control over your own career, the satisfaction of creating your own business from scratch or a dissatisfaction with your current job.  

Take Action!

To get started with computer consulting, get a piece of paper and write “The Top Five Reasons Why I Have To, Need To and Want to Become a Computer Consultant.”  Listing these will help you get a handle on your passion for computer consulting.  

A Deadline is Key

Once you’ve decided to get involved in computer consulting by listing your own personal reasons, you need to outline specific steps that will help you achieve your goals.  Before you create a plan, set a deadline for getting it all done.  Get calendar out and decide to make your computer consulting business happen by writing the specific date down on your paper.  Print it out or rip it out of your notebook and put it on a bulletin board next to your desk so you look at it every day.  

Added By:  Computer Consulting Kit

If you are a computer consultant starting your own business, there are some tips you should follow to make sure you are building a stable business that will last long term.

Know How to Bill, Know What You Should Charge

If you don’t know how to bill and the specific rates you should be charging, you will end up losing a lot of money as a computer consultant.  If you don’t set billing and pricing up right from the beginning, prospects will not comprehend or believe in your value.  A computer consultant that sets up low rates and does not have structured billing procedures is declaring that he/she is an amateur.  If you bring low-paying clients into your fold early on, you may find yourself starting all over from scratch later.  

The Importance of IT Audits

If you can do IT audits right as a computer consultant, they can really benefit your business.  You will get paid to write proposals and do needs assessment.  If you can’t do these tasks, you will end up doing a great deal of exploring without getting paid.  The ability to do IT audits means you can get paid for initial consultations.  

Local Partnerships

Partnerships are necessary to grow your business as a computer consultant.  They will bring you great clients, and not having them will probably mean you lose clients to local competitors.

Go Beyond Client Expectations

If you want to get paid a lot as a small business computer consultant, your clients are going to expect great things from you.  Your clients will have a different idea of what is perfect than you will.  Thus, you need to figure out how to exceed their expectations and meet their greatest needs.  

Utilization Rates and Profitability

As a computer consultant, you must make the most of your work week as possible, which means more billable hours.  Eliminate the draining non-revenue-generating tasks and activities.  Deliver small business computer consultant services to build your stable business and get clients that will last a lifetime.

Added By:  Joshua Feinberg

When you are starting a small business computer consulting company you need to be aware that small businesses with 10 to 50 PC’s are going to have more than one office.  Prospects this large are typically accustomed to using professional computer consulting experts and are willing to pay for support.

Small Business Computer Consulting:  Is There an In-House IT Department?

If a prospect has an in-house IT staff you need to know what they are thinking of having you do for the company.  If the prospect wants a deep specialty or if it is a strange outsourcing situation, you need to know.  

Small Business Computer Consulting:  Research Prospects

Finding prospects for your small business computer consulting company is as seasy as Googling towns using area, ZIP and postal codes.  Also try telephone prefixes when conducting a search.  Typically the best prospects will also belong to local or regional chamber of commerce organizations or similar organizations.  You can join these organizations to meet people or attend as someone’s guest.  

Small Business Computer Consulting:  The Location of Your Prospects  

Your prospects will typically be found at B2B events, so market your small business computer consulting firm by going to these events.  Target clients for your computer consulting firm will be covered in business sections of local papers and publications, so subscribe to these or read them in the library or on-line to increase your chances of finding the best prospects.

Small Business Computer Consulting

Narrowing your focus to the best small business computer consulting prospects in your area is as simple as networking at local events and reading about businesses in local publications.

Blogged By:  Joshua Feinberg

Joshua Feinberg, author of the Computer Consulting 101 Professional Kit was recently interviewed by Deborah Rothberg in eWEEK

The Contracting Life: Caveats to Cashing In (link to Yahoo! News syndication feed)

In the article, under the heading "You Must Know How to Manage the Fiscal End of Your Work", Feinberg talks about the right and wrong ways to calculate hourly billing rates.

And Feinberg describes two very simple formulas that computer consultants can use to calculate an hourly billing rate that takes into account their

1. Sales and Marketing expenses
2. Taxes, Insurance, and Administrative overhead
3. Technical Salary requirements

The West Palm Beach, Florida-based consultant and Computer Consulting 101 Professional Kit author also discusses one of the most business-threatening mistakes that new computer consultants make when first getting started in the business.

see link above for full article

Business billing and collection can be very smooth if you have a great policy in place and you follow it consistently.  As a computer consultant, if you have difficultly getting paid, you can often trace back the problem to your practices of business billing and collection.  Here are some tips to follow when outlining your policy for business billing and collection.

Business Billing and Collection Tips

• The first invoice or first project with a new client is like a proving ground. You’re proving yourself as a reliable and knowledgeable vendor and the client is proving they can follow your business billing and collection policy.

• Bill every week without fail for the previous week’s work.

• Send out past due notices at the same time. Get yourself a “past due” rubber stamp from the stationary store.

• If an invoice goes more than a week late, make a phone call and ask them if everything is okay on the invoice and the work you performed.

• Always use a specific due date as opposed to due in a certain number of days.

• Insist on getting paid.  Even if your clients fall on hard financial times, you cannot afford to be their banker.

• Become familiar with your aged receivables.  This is a valuable cash flow tool that will help you manage your business billing and collection.

• Get thick-skinned when dealing with business billing and collection.  If you can’t do it, you have to hire someone who can, like a bookkeeper or virtual assistant.  

Business billing and collection is too important to the health and viability of your business from a long term perspective to let it fall through the cracks.  The harsh reality is there are a lot of small businesses out there that will hire your firm and never have the ability or even the intention of paying your company at all.

Bottom Line on Business Billing and Collection
If you don’t follow these basic business billing and collection practices, you are going to get stuck on bills. It’s inevitable. Be aware that even if you DO do everything mentioned, you’re still going to get stuck from time to time.  The idea is that by developing and adhering to solid business billing and collection practices, you can lessen about 90% of your risk.

In this article, you’ve been introduced to Business Billing and Collection. To learn more about how you can improve your knowledge about Business Billing and Collection, 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.

Billable hours, as we talked about last time, is an important element of your overall profitability.  We left off with the concept of triple billing where you are left with only one third of your total revenue for salary payment.

When you start putting together a billing rate you need to make sure that given a reasonable number of billable hours, you have enough to pay yourself of someone else a decent salary.   At a $75 per hour billing rate and 30 billable hours per week, you have to consider:

• "What kind of technical person will I be able to find who has the high end technical skills  needed by my sweet spot small business clients if my technical salary budget is only $37,500 a year?"

• With that rate level and billable hours based on 75% utilization, "What kind of polished B to B sales person are you going to be able to find if you can only offer a base salary of $27,500 a year?"  Remember, you lose $10,000 from your sales budget for things like direct mail, attending organization and networking meetings, sponsoring events, doing seminars, etc…

Finding good staff with high skills for such low salaries is like Fantasy Island for most new small business computer consultants. That’s why the rate you set must factor in billable hours and the triple billing concept.

Let’s run the numbers with a rate of $100 an hour.   

• One third ($50,000) will take care of taxes, insurance and overhead items.
• Another $50,000 will pay a technical staff salary - yours or someone else’s.
• The last third is plowed into sales and marketing.  $10,000 of that goes for marketing expenses and now you can afford a base salary of $40,000 for your sales account executive.

The difference between $75 an hour and $100 an hour is significant.  The billable hours stay the same as does the utilization but all of a sudden you are working with acceptable salary figures. A range of anywhere from $100 to $125 per hour provides you with the revenue base you need.  Going beyond the $125 is not recommended though, because you’ll price yourself out of the sweet spot market.

Bottom Line on Billable Hours
Billable hours and your billing rate are key to your business success.  Make sure that when you set your billing rate you take into account a realistic view of the number of hours billable per week.  An hourly rate may seem great at first glance but when you crunch the numbers you have to be able to make enough to account for the triple billing phenomenon.  
 
In this article, you’ve been introduced to Billable Hours. To learn more about how you can improve your knowledge about Billable Hours, 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.

Billable hours are what determines your utilization rate. Your utilization rate determines your gross revenue.  These three things will ultimately determine how much you can pay yourself and future staff.  This two part article identifies the issues you need to consider in terms of the relationship between salary, utilization, and billable hours.  

The percentage of your total hours worked that are actual billable hours is your utilization rate.  When you know your utilization rate you can begin to set a sustainable hourly rate.

In general, you can expect your billable hours to be, at a maximum, 75% of your total hours worked.  Now don’t get too excited about that 75% utilization rate because not all the revenue generated from your billable hours goes to the bottom line.  

At $75 per hour, which sounds like a darn good hourly rate, 2,000 working hours per year is more like 1,500 billable hours a year.  This translates to $112,500 a year in consulting revenue, which sounds awesome.  You think you’ll work from home and keep your overhead low and enjoy a huge income.  Right? Wrong.

When you look only at billable hours and your hourly rate you overlook your future needs as your business grows.  Scalability is the issue.  Think about a consumer grade PC. Think about a tiny server with a minimal amount of RAM. Think about a server that maxes out at 512 MBs of RAM. What happens when you add more applications and you want to grow? You need more capacity.  It’s the same with your business.

As you get busy with more sweet spot clients, you’re going to need to bring in help. Even if you plan your business on just being yourself indefinitely and you’re thinking, ‘I’m not planning on ever hiring employees,’ you still need to understand what comes next.  

It’s called triple billing.  The basic premise is that the revenue from your billable hours, is divided into three. 

• One third goes to sales management:  commissions, referral fees, “schmoozing” time, sales follow-ups, sales calls, etc…

• The second third of your billable hour revenue goes to administrative and management items:   taxes, insurance, fringe benefits, R&D, training certification, and all the other overhead.

• That leaves one third for your salary and the salary you are able to pay contractors or staff.  

So a $75 per hour rate at 1,500 billable hours works out to $37,500 for salary payment.  Not so lucrative a prospect anymore when put in a realistic perspective.

Bottom Line on Billable Hours
The number of billable hours available to you will largely determine your overall revenue.  You need to take your calculations much further than that though, in order to figure out what type of hourly rate you should charge in order to pay yourself, and others, a decent yearly salary.

In this article, you’ve been introduced to Billable Hours. To learn more about how you can improve your knowledge about Billable Hours, 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.

Small business development is what you need to concentrate on when you first start out as an IT consultant.  There are a myriad of things that can get you off track, but, if you watch out for them, you will be able to remain focused on small business development.

Here is a list of the most common ways small business development gets derailed:

• Avoid spending too much time on technology training.  You’re probably six to 18 months ahead of what small businesses in your area need. They’re not early adopters, they’re late adopters. Put your small business development needs ahead of your need to feel like you’re keeping up.

• Avoid spending too much time reading technology magazines.  If you’re like most new consultants you probably spend hours a month in this reading black hole. Take all this time and apply it to your small business development instead.

• Avoid channel programs.  Do not get seduced by an aggressive sales person twisting your arm to join a channel program. Don’t get seduced by tech gadgets that don’t fill an immediate need with your paying clients. When you spend money on these things it takes away precious resources needed for small business development.

• Avoid “freebie mooching sessions” disguised as sales calls. Make sure when you go on a sales call that you are not there for endless hours of brain-picking that leads nowhere. You need to know exactly which kinds of prospects to focus on at all times. This will drive your qualification process and will help you with your long term small business development.

• Network smart.  You need to know what kind of prospects you should be talking to at networking events.  Find out what they do, what their company is like, do they have and use computers, and how many computers they have.  These are the 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.

Bottom Line on Small Business Development
The basic rule when starting out in IT consulting is this:  Remember that you are not in the technology business. Yes you are an IT tech firm but in the early stages of your business, you are in the client acquisition business.  Do not allow other activities or time wasters distract you from your small business development goals.

In this article, you’ve been introduced to Small Business Development. To learn more about how you can improve your knowledge about Small Business Development, 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.

Full time employment is generally the goal of most people who start computer consulting companies.  Many of the one-on-one consulting sessions I do involve evaluating a business and telling the person how close he or she is to moving to full time employment with the consulting company.

A lot of moonlighting computer consultants are initially so enamored with the idea of getting some self-employed income that they forget to remember that eventually they need this income to be at least equivalent to their current full time employment. 

Sadly, a lot of them are never going to make it because of one simple shortcoming: they’re not planning ahead for how and when the transition is going to take place. They’re hoping to move the business to full time employment but they’re not planning for it.

There are two very common mistakes these people make.  Here is an explanation of each and how to avoid them:

• First, you should not be messing around with anything but steady clients.  To get full time employment from your business you can’t afford to deal with the one-shot cherry pickers that you hear from once in a blue moon.  You need steady commitments in order to get yourself to full time employment as a consultant. 

Your ideal client as a moonlighter looking to make the transition to full time employment as a consultant, is the $1,000 a month business who needs you for one or two evenings a month, maybe one or two Saturdays or Sundays, and some light phone support in between visits.

• The second common mistake we see that hampers people from getting to full time employment with their consulting is giving away their services. Do not under any circumstances price yourself below the market rate in order to get clients.

Many newbies charge ridiculously unsustainable rates for their services.  First, you can’t sustain those rates if you hope to transition to full time employment and second, you aren’t perceived as a professional when you charge ridiculously low rates.

Bottom Line on Full Time Employment
In order to transition to full time employment from your consulting you need to plan ahead.  It won’t just happen unless you make an effort to do so. Moving from a moonlighter to full time employment as a computer consultant requires a good client base and a good revenue base.  Don’t sell yourself short by keeping poor quality clients or by charging low end rates.

In this article, you’ve been introduced to Full Time Employment. To learn more about how you can improve your knowledge about Full Time Employment, 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.

Target businesses for your computer consulting company are typically small businesses.  These are what we call the sweet spot small businesses.  Your target business has generally outgrown their peer to peer network and they have one or more dedicated servers.

That’s a very key fork in the road for the kind of business target you are looking for as a client.  Once they get to the point where they have a dedicated server, they need professional help along with it. They can’t limp along with low budget economy, no-frills options.

The typical target business in your sweet spot will have 10 to 50 computers and 10 to 100 employees. Revenues for your target businesses should be anywhere from $1 million to $10 million in annual revenue - sometimes as high as $20 million.

Beyond the sweet spot small businesses, many new computer consultants are curious about  other types of target businesses there are and what their needs are.  

Medium-Size Small Businesses
If you want to move into medium-size small businesses and make them your target business you need to get into really deep networking skills. Here you start looking at things like enterprise-oriented platforms like Computer Associates, IBM, Linux, Oracle, Sun Solaris - you really need to specialize.

Large Small Businesses
Large-small businesses have 50 to 100 computers and 50 to 200 employees and are doing anywhere from $5 million to $20 million in annual revenue. The big distinction of these larger small businesses is they usually have at least two dedicated servers and you start to see an in-house IT manager who handles most of the generalist work. Because they’re handling the generalist work, they don’t need virtual IT or an outsourced IT department. This is why they are not your target business.

Very Large Small Businesses
Next are the very large small businesses. To appeal to this set as your target business you need to drill very deep in two or three core networking skill sets and be a strong specialist. Here there will be an in-house IT department that will handle almost all of the generalist work. The only things they’re going to outsource are deep specialties.

Bottom Line on Target Businesses
The best place to focus on for your target business is the sweet spot small business client who is too big for economy service but too small for their own IT manager.  With this type of target business you will be able to find your specialty and market yourself accordingly.

In this article, you’ve been introduced to Target Businesses. To learn more about how you can improve your knowledge about Target Businesses, 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.

Hourly rates of your competitors, both the high and low range, will help you decide where to position yourself in the mix.  As we talked about last time, if you put your hourly rate too  low, clients will assume your work is worth that rate.  You want to attract clients who know you are worth a high hourly rate and who are willing to pay that rate for your services.

In order to attract these sweet spot clients you need to determine where the upper echelon of network consultants sets their hourly rates.  Unfortunately, finding out this class of hourly rate is not so straightforward.  

Hourly rate of high margin/service contract IT Consultants
Finding the hourly rates of the IT consultants you want to compete with is much more difficult. These competitors are unlikely to publish their rates in public places.  What’s even trickier is some of them don’t even stick to their own hourly rates.  They adjust their hourly rates to the client based on price sensitivity.  

To find out the hourly rates of this group:

• Ask your business partners that may have worked with other IT consultants in the past
• Ask accountants, management consultants, or attorneys what they think the going rate for LAN support is
• Ask your contacts that are deeply niched non-competing technology providers what they charge
• Inquire with the Chamber of Commerce and economic development offices  
• Ask around at user group meetings and networking events
• Ask for previous IT service invoices from new small business accounts
• Look in CRN and VAR Business - occasionally they will have articles that mention these kinds of things

The Bottom Line on Hourly Rates
Finding out the hourly rates that your competitors are charging is important.  You want to make sure you are setting your hourly rate in the top range.  This way you can ensure you attract the type of clients who will sustain your profitability long-term.  It’s not always easy to find out these rates, but taking the time to do so is well worth your while.  

In this article, you’ve been introduced to hourly rates. To learn more about how you can improve your knowledge of hourly rates, 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. 

Hourly rates of your competitors are good to know. In order to put together a competitive hourly rate you should be familiar with what other IT consultants are charging.  This means knows what both IT consultants in the low-margin sector are charging, as well as the hourly rates of those consultants that are targeting the same sweet spot clients as you.

This first half of our discussion will focus on the finding hourly rate of the IT consultants you don’t necessarily want to compete with.  The consultants who charge really low rates, attract price sensitive clients, and leave themselves no margin to take time to focus on business development issues.  

Hourly rates of low margin/high volume IT Consultants
The reason you need to this group’s hourly rate is not because you want to emulate it, but because you want to distance yourself from it.  If you set your hourly rate in this range then, advertently or not, you are positioning yourself as their competitors.  You will low ball yourself out of being able to attract the sweet clients you want.

To find out the hourly rates of this group:

• Go to Web sites (Try Googling your city, state, province, etc… and type in something like Redmond, Washington network consultants or Austin, Texas PC repair)
• Look around in consumer-focused advertising  - fliers, leaflets, coupon packs, newspaper display ads, etc…

These hourly rates will tell you what your market’s definition of being way, way, way too cheap is.  You don’t want to be anywhere near these providers because their clients are extremely price-sensitive and that’s not where your biggest opportunities are.

The Bottom Line on Hourly Rates
Finding out the hourly rates that your competitors are charging is important.  You need to know the range where your hourly rate should and should not be set. You don’t want to set an hourly rate that competes with low margin competitors because you’ll end up attracting highly price sensitive clients - you don’t want that.  

In this article, you’ve been introduced to hourly rates. To learn more about how you can improve your knowledge of hourly rates, 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. 

Pricing strategy is like walking a tightrope:  price too low and you lose money that is rightfully yours; price too high and you lose business.  Without knowing how to bill and what to charge, you risk looking like an amateur to the prospects that you desire most as clients.  And it can take years to recover from a poor pricing strategy.

There are three common ways to determine the pricing strategy for an IT service business: 

1. Price-fixed
2. Per PC or per server basis
3. By the hour

1.  Price Fixed Pricing Strategy
In order to offer a fixed pricing strategy you need to know the exact scope of what you’re doing.  You also need very tightly defined parameters so that you don’t end up doing work that is beyond the original scope.

2.  Per PC or Per Server Pricing Strategy
This type of pricing strategy is pretty much the same as price-fixed, except you need to have a handle on unit costs.  You need to know what’s going to change as you add or remove a PC or add or remove a server, and how it scales up the project.  A per PC or server pricing strategy does give you more flexibility if the scope of the project starts to include more boxes.  Some IT service businesses choose to combine the price fixed and the per PC or server pricing strategies.

3.  By the Hour Pricing Strategy
Another name for this pricing strategy is "time and materials" pricing.  This is the most commonly used pricing strategy in the IT service industry.  You set an hourly rate and you may choose to add a markup on the materials you provide.  This is the most flexible pricing strategy and the one where you are most protected when the scope of the project goes beyond your original estimate.

Bottom Line on Pricing Strategy
There are three main categories of pricing strategy.  Before deciding on the best pricing strategy for you and your business, you should consider the pros and cons of each.  The way you price your services has a significant effect on your business’ profitability and longevity - take your pricing strategy seriously, right from the start.

In this article, you’ve been introduced to Pricing Strategy. To learn more about how you can improve your knowledge about Pricing Strategy, 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.

Product ideas or services that your computer business will offer are not as easy to decide upon as you may think.  When you start a new business this part of business planning is often taken for granted.  

Deciding upon a product idea or service to offer typically starts with an assessment of your technology skills.  Once you know what you are good at, it is easy to come up with a service or product idea that interests you.  Therein lies the problem.

Many new business owners base their service and product ideas on their interests rather than their target customers’ needs.  

Two Approaches to Service and/or Product Ideas

Approach Number One

• Find a platform that you enjoy working with that sounds really, really cool and sounds like a product idea or service that everyone would want and need.  

• Then go and read every single book you can get your hands on, on that topic.  

• Attend every workshop and conference being held about this product idea or service.  

• Prepare for, and write, a certification exam to improve your credentials when offering this service or product idea.

Approach Number Two

• Start talking to very specific kinds of business owners and managers that are most likely to need IT services on a regular basis from your firm.  

• Determine from their answers, the services or product ideas they are most likely to need in the next year.

With Approach #1 you will need to sell clients on your product ideas and services.  
You will need to convince clients that they need what you are offering.  In contrast, with Approach #2, the product ideas and services should sell themselves.

You’ve already done the selling by asking them what they need.  It’s pretty hard for them to deny needing the product ideas and services they told you they needed in the first place.  If you asked the right businesses, then these people should have the willingness and ability to pay for the services and product ideas you are offering.

Bottom Line on Product Ideas
Your product ideas and/or services must come from your potential clients.  If you choose based on your interests, you will have a much tougher time selling your product ideas to them.  When you go straight to the source and then match your skills with the product ideas they suggest, your business will take off all that much smoother.

In this article, you’ve been introduced to finding new product ideas. To learn more about how you can improve your knowledge about finding new product ideas, 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. 

Small business development is a make or break activity when starting out as an IT consultant. You need to get your name out there as much as you can.  Business won’t drop into your lap - you need to use proactive small business development techniques to get things moving.

The foremost method for small business development is reaching out to business organizations.  You should try to blanket your entire region. To get this kind of coverage, your small business development takes time.  

Plan to get out to 8 to 12 events of all sorts in any given month.  To be effective, in your first year of business you should be spending a minimum of 15 to 25% of your time on small business development.  If you work a 40 hour week (which is more like a 55 hour week) you should be spending one to two days a week on small business development activities.  

Other small business development activities include:

• Follow ups
• Highly targeted direct mail campaigns
• Seminars
• Networking

In the first few months, before you have regular clients, you will likely spend 50 - 80% of your time in small business development.  You can cut this down once you are on your feet.  As your client base improves you can pare your small business develop down to four to six events a month and eventually get down to two to three.  

Small business development is more important than your administrative duties and your IT training.  You will have plenty of time to take care of those things after you have built up a pool of regular, long-term clients.

The Bottom Line on Small Business Development
Small business development is your job.  If it is not most of your job when you first start out then something is wrong.  As you get more and more clients your small business development will get progressively less but it should never get to zero. This is the life-blood of your IT consulting business so give it the attention it deserves.   

In this article, you’ve been introduced to small business development. To learn more about how you can improve your knowledge about small business development, 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.

Payment terms are the one thing that even your best customers will abuse if you let them.  When you set your payment terms you need to look out for yourself.  You don’t want to get into the habit of extending credit and giving discounts when they are not warranted. Here are some tips and tricks to get the most mileage out of your payment terms.

Setting Payment Terms

• Another term for payment terms is stolen discounts.  When you have payment terms like net 30, people assume you’re giving them credit.   Use net seven or net ten instead.  
• Avoid saying payment on receipt. How do you know when they receive it? It’s very ambiguous.
• Always put a specific payment due date on your invoice.  
• When payments go past due, then you have to deal with the issue of collecting your money.  Some tips to use when faced with this situation include:
• When a customer is slow at paying, pull your own reigns back and delay their appointments for another week.  Typically the invoice clears pretty quickly, especially if there’s an emergency.
• Pick up the phone, phone calls work better than faxes or letters. You are likely to get the news you want to hear when they have to talk to you.  
• Even better than phone calls are personal visits.
• Don’t let late payments get beyond two terms.  If they were supposed to pay in 14 days and it is now 28 days, you need to move in quickly to recoup your money.  

The Bottom Line of Payment Terms
The best offensive if often a good defensive.  When you think about setting your payments terms, make decisions that are in your best interests.  Collect money up front whenever possible and do not allow invoices to go long over due.  The more credit you extend to your customers the more likely you are to lose.  Keep your payment terms tight and get the money you are owed into your bank account quickly.

In this article, you’ve been introduced to payment terms. To learn more about how you can improve your knowledge about payment terms, 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.

Small business advice from people who have been there, done that is invaluable.  Here is some small business advice we have gathered over the years:

• Do not invest in fancy stationery or letterhead or envelopes. You are much better off just picking up a good box of linen bond paper and matching envelopes at the office supply store.  This is a professional alternative to spending a lot of money.
• Another bit of small business advice is to purchase a color laser printer.  They are very inexpensive these days.  This way you can avoid high commercial printing fees and you can print out marketing material in whatever quantity you need.
• Create a simple web site.  Make sure your email address matches your company Web site domain.  In other words, www.companyname.com, emailaddress@companyname.com.  This is very smart small business advice because it promotes branding.
• Work from a home office.  There is no need to rent commercial office space.
• Don’t spend a lot of time reading IT-related or consumer computer magazines.  Your time needs to be spent marketing.  This is a piece of small business advice that will save you tons of wasted time.
• Do not rely on timed, unlimited use demo software products.  If you’re going to work with Microsoft products, then purchase an Action Pack subscription for approximately $300 a year.   
• One of the most valuable bits of small business advice is do not try to build your own applications.   Buy an accounting and time and billing system like Quickbooks or Peachtree.  For contact management use ACT or some other similar program.
• Send files via email in Acrobat format. This protects the document from tampering and avoids software compatibility problems.
• The number one financial related piece of small business advice is to avoid granting credit to one-time clients and or on product sales.  You are in business to make money not lend money.
• Make sure your invoicing and billing practices are well organized.  You need to collect your money on time to pay your own bills.
• Don’t go cheap when it comes to your phone.  Your phone is your image. A very useful piece of business advice is to get a dedicated business line so that when you answer your business phone you don’t just say, “hello.

The Bottom Line on Small Business Advice
There are many ways you can improve your effectiveness and save money.  Some of the best small business advice comes from people who have already made mistakes.  Learn from their lessons and consider each  bit of small business advice you get very carefully.  

In this article, you’ve been given some small business advice. To get more small business advice, 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. 

Business structure planning entails analyzing the different business entity options and choosing the one that is right for you.  There is no magic formula for business structures.  Your set of reasons for choosing one business structure over another is as unique as your company.

There is, however, one universal rule for deciding on a business structure:  Consult a Professional.  You certainly need to familiarize yourself with the basic types of business structures available but don’t think you can make the final decision.  If your clients read up on Microsoft Small Business would they be able to install their small business server?  No.  The same goes for you and your limited knowledge of business structures.

Business Structure Options:

• Sole Proprietorship - one owner with no segregation between business and personal liability
• Partnership - two or more people with ownership in the company
• Corporation - business is a separate legal entity from the owner, 3 types:  S Corp, C Corp, or LLC

The most popular business structure is the corporation.  There can be liability advantages but the main appeal is the prestige and credibility it seems to bring in the market place.  Regardless, the business structure you choose has to make sense for your situation.  Your accountant will be able to go through this with you.

Your accountant will analyze the business structures from both an operational and tax perspective.  The tax laws are so complex and confusing that you really need to have an expert in that area provide you with guidance and direction.  Do not cut corners here.  Hire the best accountant or attorney you can.

The Bottom Line on Business Structure
The business structure you choose is a huge decision that affects both your personal finances and your business operations for years to come.  Don’t mess around and don’t be cheap.  When it comes to deciding which business structure you should use, you need to get professional advice.  Consult an accountant or attorney who specializes in small business finance and tax laws.  The money invested now will save a lot of frustration later.  

In this article, you’ve been introduced to business structure. To learn more about how you can improve your knowledge of business structures, 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.