Small Biz Tech Talk ™

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. 

In starting an IT consulting business, you need to get the steady clients that are willing to pay premium rates for premium services. If you want to be perceived as a professional solution provider and you want to do this full time, you need to be charging what other IT consulting businesses charge.

You should charge somewhere in the same ballpark as the competition because if you’re charging way below market it’s going to be really hard to raise your rates over time.

Remember Overhead Costs

Your full-time competitors have figured out what they need to bill to be able to cover their overhead items and you may be overlooking a lot of those items. When determining your rates for your IT consulting business take into consideration taxes, training, insurance, a decent marketing and promotions budget, research, administration, and billing.

There’s good reason why your competition needs to charge more than $100 per hour. It’s not that they’re greedy, it’s not that they’re being opportunistic; their costs are that high. Even when it’s just you and you’re not paying a technical person, you need to know what your going rate is in the marketplace as an IT consultant.

Be Patient

It may take until the second year to realize your desired income.  Starting an IT consulting business is not about working 80 hours a week to draw $200 a week. If you can’t cover your basic expenses it’s going to be really difficult to make the transition to operating a full-time IT consulting business. 

Don’t Work Too Cheap

In the IT consulting business you want to ensure you don’t make the mistake of working way too cheap. Make sure you go for steady clients when you’re moonlighting. At the end of the day you need steady business from clients that have the willingness and ability to pay premium rates for your premium services.

The Bottom Line about IT Consulting Business

In this article, you’ve learned about the IT consulting business. To learn more about the IT consulting business, 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 expenses are a fact of life.  Before you start your business you need to take some time and create a budget that lists your main business expenses and what you estimate each will cost per year.

The best way to do this is to use a cash flow planner.  It will take you through planning for your business expenses and the cash that will be leaving your business 13 weeks at a time, or one quarter at a time. Let’s look at some of the common business expenses in detail:

• Salary – by six to nine months down the road, you should be pulling in enough income to take a draw. This is a significant business expense at the start, even if you’re only taking out $400-$500 a week.
• Employee benefits – another huge area of business expense.  Search around to find out what people are paying right now.  If you are still employed, try to find out what the total monthly premiums are. Remember to account for the fact that you might not get a group discount rate.
• IRA – this is a business expense that many people forget about.  You will want to retire, so make this or some other retirement vehicle a priority now.
• Payroll taxes – this is a business expense that you should talk to your accountant about.  He or she will be able to assist you better than any general guidelines.
• Training and certification – typically you should factor in about $1,000 a year for this.
• Dues and subscriptions – expect this business expense to come in at a little over $300 a quarter or $1200 a year.
• Products purchased for internal use – here we’re talking about spare PC systems and parts.  You are wise to budget this business expense at between $3,000 and $4,000 per year.  The key here is to only purchase items that will bring you immediate ROI.  If it doesn’t tie directly to billable hours, then it is a business expense you can’t afford right now.
• Telephone and ISP expenses – budget for about $110 a month for a business phone plus an inexpensive DSL account.
• Marketing and promotion  – this will be a large business expense.  Plan for $5,000 to $6,000 a year.  
• Commercial insurance – budget for $2,200 per year.
• Transportation – a fair estimate is $30 per week.
• Professional services – typical yearly totals are around $2000.  
• Corporate income taxes – this is another business expense that you need to discuss with your accountant.
• Loan payments – these will be specific to your situation but need to be included in the budget.

The Bottom Line on Business Expenses
Business expenses will happen on a daily basis.  To plan effectively you should use a cash flow planner or spreadsheet to keep track of your budgeted business expenses on a regular basis. Some expenses can be budgeted for based on common experience.  The others will need to be discussed with your accountant or banker.  There are a lot of variables, but the common factor is the need to budget carefully for your business expenses.  

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

Marketing tests are an important component of your overall marketing strategy.  When you first start out you will be on a shoe string budget.  You need to save money everywhere.  Marketing tests will help you determine whether you should spend a large part of your budget on a particular sales tactic or not.
 
Regardless of how good the technique appears to be, if you do a market test with a small measure sample you won’t waste large amounts of marketing dollars and you will come out with a highly effective, highly targeted marketing campaign.
 
Marketing Test Tips:

• If you are considering direct mail, rent a marketing list in small portions.  People who don’t do marketing tests will rent thousands of names before even knowing if the list is worthwhile.
• Print a small quantity of marketing materials.  If you print thousands of fliers or postcards without doing any marketing tests how do you know your money isn’t ending up in other people’s garbage cans?
• Track your leads by marketing material source.  Tell your leads that you are doing marketing tests and ask them how they heard about you.  Figure out what percent are coming from each type of marketing activity you are doing.  By doing this your marketing tests will show you exactly which campaigns are effective and which ones are duds.

The Bottom Line on Marketing Tests
Marketing tests are designed so that you make intelligent decisions about your marketing strategies before you roll out large, costly campaigns.  Without performing marketing tests diligently you risk spending a great deal of your precious start-up capital chasing leads with no direction and no real results.  Whatever your marketing strategy is, make sure you incorporate small measured marketing tests into your overall strategy.

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

Pro forma income statements look at revenue and expense projections for future periods.  Pro forma income statements are generated by looking at financial performance the year before, comparing it to the current year figures and using the changes to make projections into the future.

Pro forma income statements can be made without past and current data as well.  Figures are estimated for the first year and then assumptions are made about how those numbers will change in future periods.  The most important thing with pro forma income statements is that you need to track changes from period to period and then apply those changes to the future.  

Estimating Pro Forma Income Statement Numbers

Revenue

• How much service revenue do you anticipate generating?  
• Are you going to be reselling products and if so, what do you anticipate your sales to be next year?
• Will there be other potential revenue coming in i.e. acting as an agent and getting referral fees from ISPs or Web hosts.  

Cost of Goods Sold

• What does it cost you to purchase the items you are reselling?  

Budgeted Expenses

• Exhibits
• Sales Seminars
• Direct mail expenses

Postage
Printing costs
List rental
Copy editor or graphic artist

• Sales Call expenses

Gas
Tolls
Parking
Telesales
Phone expenses

• Display advertising

• Commissions

• IT expenses

Training and certification
Research and development
Subscriptions
Extra PCs

• Administrative expenses

Payroll
Subcontractors
Telecommunications expenses – cell phone, business line
Insurance – Business, General Liability, Casual
Travel and entertainment
Office supplies
Health insurance
Car payments
Bank fees
Credit cards fees
Professional fees – accountant, lawyer

Total up your revenue – Subtract your expenses – You have a pro forma income statement.  Analyze your numbers against previous years’ data or assumptions about the future and create statements for 3 – 5 years into the future.  

Breaking your pro forma income statements down into quarters is a good idea. Obviously, the further out you go out the more subject it will be to change, but it’s important to be thinking about the future and putting a plan down on paper.

The Bottom Line on Pro Forma Income Statements
Pro forma income statements are an excellent planning tool.  They are based on historical performance and best guess estimates of the future.  The numbers on a pro forma income statement won’t be perfect but the exercise of analyzing all your sources of revenue and expenses is one that will assist your business planning process immensely.

In this article, you’ve been introduced to pro forma income statements. To learn more about how you can improve your knowledge about pro forma income statements, 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.

Promotion tools come in all different shapes and sizes.  They also have different prices and rates of effectiveness.  Regardless, the promotion tools you use have one purpose:  They must promote your business and get your name out there.

Some of these promotion tools will work extremely well; some of them work some of the time, and some of them don’t tend to work well at all.   Your job is to analyze each type of promotion tool that presents itself and determine its efficacy.

Promotion Tool Analysis

• Think about the different places that you’re going to be promoting or advertising
• How will the promotion tool you use reach the market:  email? postcards? organizational membership? etc…
• Is the promotion tool capable of highlighting your uniqueness and your services?  A full page color ad in the yellow pages is not going to portray you as unique but it sure will cost a lot of money.  All of you competitors have the same basic text on their ads, it’s just a matter of which one a prospective client chooses to dial first.  

When you start to think about the promotion tools to use, try to be creative.  The more obvious the choice the more mundane the results.  Your promotion tool should help you stand out from the crowd, not show that you follow it.  

Good promotion tools to consider include:

• getting involved in organizations
• being the preferred technology person on a panel of business leaders
• being the preferred provider for a prestigious company.

The Bottom Line on Promotion Tools
Promotion tools are not created equal.  Your job as a business owner is to choose those promotion tools that will highlight your unique selling proposition as opposed to making you look like a commodity.  You will have a limited marketing budget so choose your promotion tools wisely and maximize the dollars you spend.  

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

Selling products as part of your computer consulting business is an option you should consider.  Products can offer an additional revenue stream but you must determine if the extra expense and overhead associated with selling products are a good fit for your business model.  You need to sit down and think long and hard about whether you want to be a reseller or if you want to be a pure consultant.   

As a consultant you will be specifying what products you recommend your clients purchase.  You may actually do the purchasing on their behalf.  The time you spend doing this is billable hours.   Selling products for resell products will make some product margin.  The margin for most of these products, however, is not that large.  

A majority of products you recommend will be available just about everywhere.  Your clients know this.  You might be able to add a small factor for convenience but if you try to reap huge margins selling products, your clients won’t buy from and no one else will either.

Selling Product Drawbacks
Things you need to consider before selling products:

• carrying costs and capital tied up in inventory
• product return issues
• carrying receivables
• merchant account administration

Essentially selling products makes your business model more complicated.  There is also not a lot of money to be made through selling products.   You won’t have sufficient buying power to enjoy low purchase rates so your product margins aren’t going to generate a lot of profit for you.

The Bottom Line On Selling Products
When you open your business you have a choice whether you want to be selling products and services or just services? You should consider selling products as an option but make sure you understand the pros and cons before committing to adding product selling to your business model.

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

Start up business plans are developed because the process of writing them creates huge benefits.  A lot of people resist writing a start up business plan.  They are under the false notion that start up business plans are an academic exercise that people are made to do in college or business school.

Another common misconception is that start up business plans are only needed if you are going to raise capital through pubic share offerings, taking on private investors, or looking for angel investors. The fact is, there are a tremendous number of benefits to putting together a simple start up business plan regardless of the type of business you intend to launch.

Even if the start up business plan will only be read by you or your spouse, the benefits are undeniable.  The things you will learn about your business by going through the process of writing a start up business plan far outweigh the time you will spend writing it.  

The Benefits of a Start Up Business Plan

• Motivation:  your start up business plan can help you get back on track with your original business concept giving you wisdom and guidance. It helps you see your original vision.
• Planning:  your start up business plan is a map showing where you are today and where you want to end up. Following it gives you confidence that you know where you’re going.
• Analysis:  your start up business plan helps you to think about things you wouldn’t normally consider. It forces you to analyze the relationships among different parts of your business. How sales ties together with lead generation, how that ties into services, delivery, profit margins, cash flow forecasting, etc…
• Strategy:  your start up business plan highlights the relationship between your business and the local competitive marketplace. By writing it you will have tapped into the primary sources of information about the competition; sources that will be invaluable in the future.

Overall, the act of writing a start up business plan puts your ideas and concepts down on paper.  When things are in black and white like that you can see the inconsistencies and weaknesses much easier.  Then you have time to address these issues and resolve them before you enter the marketplace.

The Bottom Line On Start Up Business Plans
Having a start up business plan is extremely valuable. The process of researching and compiling the information about your business provides motivational, organizational, analytical, and strategic advantages.  These advantages will continue to accrue long after your start up business plan is written.

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

Consulting salaries are an important factor in your ability to hire the type of talent you will need as your business expands.  You will probably do much of the work yourself, but as your business scales up you will need to employ others to help you.  The consulting salary and payment scheme you offer will be key to attracting and retaining top talent.

You need to ask yourself very early on in your business operations, "Will I be able to afford the kind of technical person that has the skills that are needed for sweet spot clients?"  If your business is only generating enough revenue to cover a consulting salary of $27,000 per year, you might be in for a shocking answer.  

Consulting Salaries and Scenario Analysis
When we think about consulting salaries we have to use the triple billing rule:  1/3 of revenue goes to sales and marketing, the second third goes to taxes, insurance, and administrative expenses, the final third includes consulting salaries as well as all the other business expenses.

A great tool for figuring out potential consulting salaries is an Excel spreadsheet set up for scenario analysis.  

• Run different hourly billing rates through the analysis  
• Allocate the overall revenue into the general thirds
• Take out a reasonable amount for general businesses from the final third
• Analyze what is left for consulting salaries

You should try to run billing rates between $75 per hour to $125 per hour and come up with a rate that will support a consulting salary of $40,000 and up.  

The Bottom Line on Consulting Salaries
The overall revenue of your business must be able to support a consulting salary that is sufficient to attract good, solid employees.  A some point you will likely need to hire some help.  If yo use the Triple Billing Rule you should be able to set an hourly billing rate such that you can afford to pay an attractive consulting salary to yourself and your future employees.

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

Strategic business planning is very important to your business success.  The perfect time to do your strategic business planning is when you are transitioning from full time work to a consulting business.  You won’t feel pressured to get things done too quickly because there is still money coming in.  

When you start your strategic business planning early you have the time you need to get all the elements of your business prepared before launch.  90 days is a good timeframe to give yourself for strategic business planning.  You can get everything you need to do done and you are not giving yourself too much time to put off the launch.

Some of the most important items you should be covering off during your transition time are listed in the Strategic Business Plan Checklist below:

Strategic Business Plan Checklist

Networking

• Start looking around for networking events.  Get them on your calendar and plan on start going a few events within the next few weeks to get your name out there.
• Start telling everyone that you know to listen up for people whining about PC problems

Marketing

• Think about a niche you can build for yourself. Are there are any areas/industries/types of businesses, etc… that are under served in your community?

Business Basics

• Develop a company name – make it memorable but not obscure.  
• Get all your paperwork together including contracts, forms, agreements, etc…
• Develop and print business cards – take piles of them to networking events
• Develop a website – populate it with useful information as well as your marketing information

These elements form the basics of your strategic business planning process.  By attending to these business basics you will be in great position to prepare for launch.

The Bottom Line On Strategic Business Planning
Strategic business planning will take you from thinking about starting a business to actually doing the things you need to do to get a business going.  The longer you put off your strategic business planning process, the longer it is until you launch.  Use the transition time between your work and business launch to do the strategic business planning you need to do to be successful long term.

In this article, you’ve been introduced to . To learn more about how you can improve your knowledge about strategic business planning, 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 networking referrals are the life-blood of any computer consulting business.  It’s a who you know type of marketplace. This makes tapping into a source of referrals absolutely critical.

The problem is, what happens when you don’t know your next door neighbor let alone any other business networking referral sources?   

Business Networking Referrals An A New City
Many people who start a computer consulting business are going to be moving, or have moved, somewhere new.  This move is often what precipitated the business in the first place.  

If this is you, you might think you don’t know anyone.  You are also probably overwhelmed by the thought of getting business networking referrals before you’ve got a sense of what’s what in your new community.  The fact is, you DO know a lot of people and these people know a lot about the community.

Get out your checkbook and credit card statements and look at how many people you have met through your purchases – these are all potential business networking referrals:

• Many of the vendors will be small business owners and managers.  This is your target market.  They might become clients, and they surely know others who could be clients.   
• The Real Estate agents are plugged into who who’s and what’s what in the community.  Tell them about your business and use them as a source of business networking referrals.
• Attorneys, mortgage specialists, title officers, etc… again, these business networking referral sources are priceless.  

You will be amazed by the number and type of businesses you have been in contact with already.. Get the word out to these businesses and start right away with setting up a rich source of business networking referrals.

The Bottom Line on Business Networking Referrals
Even when you move to a new town your business networking referral pipeline is still strong.  Look at your credit card statements to figure out what business you have spent money with in the local area. From movers to real estate agents and landscapers to decorators, you have already been in contact with  business networking referrals.  Make sure you use every opportunity you have with these people to market your new business and begin to build a strong business network.  

In this article, you’ve been introduced to business networking referrals. To learn more about how you can improve your knowledge about business networking referrals, 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 journals, or diaries, are an excellent way to record your business growth and progress. Business journals are extremely valuable in providing you with some amazing insight.  By recording what you have done you can reflect and see where your time is going, where your growth spurts have occurred, what’s working and what’s not.  

Plotting your course in a business journal lets you see opportunities with ease and clarity.  It’s hard to see what is right in front of us but when you revisit what you did a week or a month ago, your perspective on the situation is often different enough that you can analyze the situation much more effectively.

Business Journal Tips

• Use a good old fashioned paper and pencil business journal as opposed to an electronic or online version.  It’s easy and it’s accessible everywhere.
• Take five minutes before you go to bed every night and write down three or four sentences and bullet points about what you feel you accomplished that day
• On the back page of your business journal start a business idea log or brainstorm list that addresses two questions:  ideas for getting leads and clients and ideas on how to increase service revenue

By recording this type of information every day you will have a permanent record of what you thought about doing, what you have done, and how successful your ideas were.  Your business journal will show you where you have been and it will help you determine where you should do.  

The Bottom Line on Business Journals
A business journal allows you to efficiently organize your ideas and record both what you have tried and things you are thinking about trying but haven’t quite put on the planning radar screen.  At the front of your business journal you’ll write three or four sentences every day on what happened to help your business grow and in the back you’ll put ideas on where to find more leads and clients and get more services revenue. By using your business journal on a daily basis you will create a powerful tool that helps you get the right perspecive and helps you both operate and grow your business.

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

Consulting rates vary from business to business.  Some people start up their own computer consulting business right out of school.  Others have worked in the industry for many years before deciding to head out on their own.  The reality is, not all computer consulting businesses are alike and not all consulting rates are alike either – their owners have different skills sets and experience levels.  

Some owners of computer consulting businesses have bachelors degrees, some don’t.  Some have years of experience, other’s don’t.  Some are in their 20’s, some are in their 60’s. Given this disparity, the question that begs to be answered is, "How do I know if customers will pay premium consulting rates for my services?

Qualifications, Experience and Consulting Rates
The simple answer to the question is this:   If you have decent people skills and decent technical skills, if you can do the job and be an asset as an IT person for a sweet spot small business, then your age, experience, or education should not hold you back from charging consulting rates at the top of the market.

The flip side of this is also true.  If you are starting your business in your 50s or 60s and doing this as a second job or as a change in careers, don’t let that hold you back from setting premium consulting rates.  Your age, experience, and whether you have a degree should have absolutely nothing to do with it – your competency is the most important factor.    

The Bottom Line on Consulting Rates
The core issue with setting your consulting rate is whether your computer consulting business provides value to the client.  Do you provide something that they can’t do themselves? Do you help them to be more productive? Do you help them get more done in a week? Do you help them cut expenses? If your answers are "yes" then you have every right to be charging premium consulting rates for the services you provide.    

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

Work life balance is a primary consideration when you are first starting a computer consulting business.  Regardless if you are getting started part-time, full time, or moonlighting, this launch will be intense for you.  At no other time will work life balance be so critical.
    
Getting started takes a lot of time and energy and it can be very draining.  To maintain even a semblance of work life balance your have to be very organized.  You have to have specific methods in place that will allow to enjoy work life balance.

Six Strategies For Achieving Work Life Balance

• Avoid going out to clients on more than 3 consecutive weekday evenings. You will have no work life balance if you are out every night of the week or out back to back nights. 

• Stick to a rigid standard configuration.  Achieving work life balance means working efficiently.  If you keep consistent hardware and software, standard settings, similar operating systems, similar peripherals, the same ISPs whenever possible, and the same web host whenever possible, you will reduce stress and improve your work life balance.

• Look for 9-5 clients.  An easy way to keep work life balance is to avoid round-the-clock clients.  You went out on your own to avoid being on call 24/7.  

• Don’t let deadbeats ruin your moral.  If you worry or fret about deadbeat clients you will upset the work life balance you are tying to achieve.  It’s frustrating but don’t give these situations all your time and attention.  

• Try to operate from a position of financial strength.  This allows you to be picky about your clients.  The better clients you have, the less stress and worry you have, and the more work life balance you have.

• Live by the motto:  Life’s too short to put up with crap.  You need to be able to laugh and let some of this roll off your back.  Finding the right perspective helps work life balance fall into place.

The Bottom Line on Work Life Balance
Work life balance is not a luxury – it is a necessity.  You must create your business so that it supports work life balance rather than defeats it.  There are some simple strategies you can use to create work life balance but the most important is to keep your work in the right perspective.  Don’t let work consume you – concentrate instead on what you can do every day to ensure you have work life balance.

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

Credit terms and policies for extending credit to customers requires a tight balancing act.  You need to watch out for your money and protect your cash flow.  You also want your services to be attractive to clients.  By following a few simple rules about providing credit and setting credit terms, you will keep yourself in perfect balance.

Credit Terms Rule #1
With new clients, get paid as you do the work. The bill you’re most likely to get stuck with, is the first bill a client receives.  Quite simply, don’t give them credit terms.

Credit Terms Rule #2
Get credit card authorizations whenever possible.  Either get a credit card or do a check before you leave. You don’t want to extend credit terms to new clients without performing due diligence unless it’s an extremely small amount or you like taking huge risks.

Credit Terms Rule #3
Don’t give credit without a rigorous credit application and credit check. No exceptions.

Credit Terms Rule #4
Get something up front.  Commit to getting half up front.  Securing a deposit check makes all the difference in the world when determining the likelihood of receiving the second half. Once you make this credit term policy – enforce it.

Credit Terms Rule #5
Never extend credit on product sales. You’re not going to make much money on product sales.  This is an  accommodation or incremental source of revenue at best. Get it prepaid or get a credit card authorization.

Credit terms are an important part of operating a business.  You have to remember however, you are a computer consultant, not a bank.  You are not in the business of lending money so don’t make it a habit.  

The Bottom Line on Credit Terms
Credit terms are part of business, but you have to be smart about them. Don’t extend credit terms to new customers or on product sales. Do get authorizations and deposits before starting work.  If you manage your credit terms properly you improve the likelihood of maintaining positive cash flow.  This is what allows you to extend credit terms in the first place.

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

New computer technology comes out continuously.  As a computer consultant you probably want to keep up with all the new computer technology that comes along.  You’re most likely in love with technology – always looking for a new intrusion protection product to play with or another border-gateway protocol.  What you have to realize is that your small business clients aren’t experimenting with new computer technology and so you shouldn’t be wasting your time investigating it.

New Computer Technology Distractions
New computer technology is a distraction you can’t afford.  It’s easy to get caught-up with keeping-up, but, no one is paying you for your raw technical knowledge. They aren’t paying you for knowing the latest new computer technology, they are paying you for knowing the technology they are using.  

If you’ve been in corporate IT for a long time you’re way ahead of the average small business anyway. The average small business is going to be at least six to twelve sometimes even 18 months behind the new computer technology you see in the average enterprise IT shop.

In the early stages of your business, you have to put learning new computer technology on the back burner. Adjust your priorities and put 90 percent of your R&D on the back burner for the next three to six months. Concentrate on finding paying clients. If those paying clients start demanding skills with new computer technology, that’s when you invest your time and energy.  

The Bottom Line on New Computer Technology
You’re in the business you’re in because you love new computer technology. Unfortunately, in the business building stage you can’t afford to spend your time learning, you have to spend your time doing – and getting paid for doing it.  New computer technology isn’t being used in the majority of clients’ applications anyway.  Put your passion for new computer technology on hold for a while and be passionate about finding steady, paying customers.

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

Sales lead management is a business activity that tends to be cast aside when the going gets good.  When the current revenue stream is flowing great, sales lead management is the farthest thing from people’s mind.  Unfortunately, when marketing activities are put on hold the likelihood that they need to be used increases.  

One of the most dangerous things that happens to professional service businesses when they start generating lots of revenue, is that sales lead management suffers. Typically what happens is the owner starts to work more and more hours.  This results in lots of billable hours.  But, an increase in billable hours often comes with a decrease in marketing hours.

Poor Sales Lead Management Is Poor Business Practice
Sales lead management is neglected when there is less time available.  Attending networking events and doing follow-ups and sales calls almost disappear.  Phone calls from leads remain unreturned for days, even weeks at a time.  Slowly, concern for the business diminishes and is replaced with concern about writing invoices.  

This lack of sales lead management is a sure sign of future death.  You need to be constantly adding new opportunities to your funnel. Going to more networking events, getting new people in your database, and getting more proposals out there.  

Not all sales lead management activities, though, need to be this time intensive. Direct mail is an excellent sales lead management technique that can run on autopilot.  It is also financially affordable.  
Regardless of what type of sales lead management you use, you need to be spending much of your time on getting people into your funnel. Qualifying leads as prospects. Getting the prospects and getting them signed up for work. You never know when you will need to turn those leads into paying customers. It is much easier to do so when they are already part of your marketing efforts.      

The Bottom Line on Sales Lead Management
The type of sales lead management technique you use is not the most important issue.  The important factor is that you use sales lead management consistently, regardless of where your business is at in terms of sales and revenue volume.  When you have hardly any customers, to when you have more customers than you think you can handle, your sales lead management will make a difference in your long term success.  

In this article, you’ve been introduced to sales lead management. To learn more about how you can improve your knowledge about sales lead management, 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 startup funding is always a worry.  Do I have enough money to start? Can I quit my job to concentrate full time?  Will I be able to cover my monthly expenses?
    
When the time comes to actually launch your business you must have done your homework regarding your business startup funding needs.  You need to be prepared so that if the opportunity to accelerate your launch presents itself, you’re ready.  
    
Assess Your Personal Finances
Take out your checkbook and credit card statements and review all of your personal expenses. Find all the frills and eliminate them.  It’s tough to do, but if you’re really committed to getting this business of the ground you need to reduce your personal expenses.  
    
Taking control of your business startup funding doesn’t mean you have to quit enjoying life.  You just have to prioritize for now.  Skip the night show and catch a matinee instead.  If you’re going out for dinner, clip a 2 for 1 coupon or go to the early bird. Hold off on that tropical vacation for one year.  
    
Evaluate Your Business Expenses
Another element of business startup funding is your minimum business expenses.  Luckily, computer consulting is not a capital intense venture.  You will have business expenses to cover though, so you must analyze what those are and figure them into your business startup funding needs.
    
Do the Math
Total up your personal and business monthly expenses. To launch a successful business you need to have at least six months of cash in the bank OR an alternative source of affordable capital.  Many people won’t have 6 months cash to cover their business startup funding needs.  If this is you, you will need to find, or keep, a job.   
    
Limit the job to 15 – 20 hours per week so you leave enough time to concentrate on building your business.  Whether it’s teaching some computer courses at the college or working at an electronics store, you have to be bringing is some reliable income.  This reliable income will give you the cushion you need to spend time building your client base.  
    
Securing adequate business startup funding is one of the most challenging aspects of launching a small business.  You don’t want to minimize its importance though.  Inadequate business startup funding is at the root of many business failures.  
    
The Bottom Line on Business Startup Funding
Do what you need to do now, in order to do what you want to do in the future.  Having enough business startup funding means conserving your cash mercilessly.  You have to know where your money is going and have enough to cover 6 months of expenses.  If your business startup funding is a little short, a part time job is often the most practical means of securing the funding you need.  
    
In this article, you’ve been introduced to business startup funding. To learn more about how you can improve your knowledge of business startup funding, 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.