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Sunday, July 30, 2006

Ten Tips for Starting a Computer Consulting Business

The appeal of computer consulting for many is being one’s own boss, coming and going as one pleases and not having to answer to anyone. While running a computer consulting business is very rewarding, it is wrought with challenges. The following tips can help get you started thinking about what is required to start a business, before you quit your day job:

1. Incorporate. If a client’s data is lost, you shouldn’t end up losing major assets. If you attempt to be independent and don’t incorporate, you may find your personal assets vulnerable if something goes wrong. Consult an attorney and a qualified accountant about tax issues and how to turn your computer consulting business into a real business.

2. Register for a federal tax ID number. In truth, you will not find many people – banks, clients or otherwise – that will talk to you if you don’t have a legitimate federal tax ID number as a computer consulting business. The IRS website can help you easily with this step.

3. Register for state sales tax exemption. Because you are responsible for paying state sales tax on any product you sell, whether a software license or a PC you need to check your state’s website to find out how to fill out the appropriate forms so when you purchase products from vendors to sell to customers you are covered.

4. Register with local authorities. The local government will need money, and will require you to register for a business license. Your local government’s revenue cabinet or commission can help you appropriately register your computer consulting business.

5. Use QuickBooks. You will have a lot of paperwork to do when starting your computer consulting business, and you need a way to simplify the process. You will need to spend perhaps a couple weekends before you even go into business learning about the financial software so you can use it efficiently.

6. Backend systems are critical. Items like marketing services, billing and vendor management and fulfillment can be a pain. You need to establish relationships with people in order to give yourself appropriate support. This means forming a relationship with the vendors you will use and delegating responsibilities before you even start your computer consulting business.

7. Your success rides on vendor relationships. It is often hard to develop relationships with vendors, but it is absolutely important. You need to spend time at trade shows and on the phone getting to know as many vendors as you can. Get to know everyone from local computer store owners to software manufacturers and hardware distributors so you can have a security blanket when you need products and services to support your business. It can open up your computer consulting business immensely.

8. Know what you do and be able to explain it quickly. As you start your own computer consulting business, you may think you need to write a 50-page or more business plan. While you need a business plan in order to focus your energies, you also need a shorter business plan that articulates what your computer consulting business does so you can explain it to prospects and contacts in ten seconds or less. The ability to quickly express your value as a computer consulting business is crucial to success.

9. Branding is very important. Your brand can break the ice with prospects and keep them coming to you. If you have signs on your car, t-shirts or any other way of getting your name out there you have a better chance of bringing more people to you.

10. Find a niche. Computer consulting experts need to know their market niches, and most importantly, they need to know what their target market is. Decide if you will only serve small businesses or larger ones, and what software and hardware you will need to master. Perhaps you will be targeting specific segments like physicians or accountants. Regardless, while you will not be able to master all elements of the computer consulting business, you should have a clear idea of what your prospects need and expect.

Blogged By: Computer Consulting 101