If you’ve built up experience working as an IT consultant and think that it’s time to break out on your own, there are few things that you need to know before you start your own business.
There is a lot of money to be made in the industry but there is plenty of competition. The UK consulting industry counts roughly 63,000 professionals, 94% of whom are consultants. Among all sectors where consultancy is needed, the technology segment has the largest share, 28% of the whole industry.
To give your business a good chance of success and ensure that you stick out from competitors, you need to put in the right groundwork. Starting a new IT-related business doesn’t mean you’ll solely be focusing on IT. You’ll need to get familiar with the most basic principles of business and marketing, including how to structure a business plan or how to conduct market research. In this guide, you’ll get familiar with the key steps that you need to take to kickstart your own IT consulting business.
The first step is to do some invaluable market research – this will give you an accurate view of how an IT consultancy will run and who your target audience are. Study the competitors in your area to gain an understanding of the needs of your intended customers, especially which ones aren’t being met by others.
From here, you can identify a gap in the market or speciality that will make your business stand out. This could be anything from offering clients more technical knowledge than your competition to encouraging more business with incentivising discounts and deals.
Some of the most common methods of research are surveys, focus groups and qualitative interviews. Social media listening is also becoming a useful tool to analyse the market. Businesses are now able to scan social media to gather opinions, improvement areas and gaps in the market.
Build a business plan
After your initial market research, you want to outline your business plan. It will be easier to achieve your ambitions by clearly identifying what they are from the start, as well as how they will be achieved. A business plan is the best way to document the services that you’ll offer and the financial goals that you want to reach within a certain timeframe, as well as the methods that you’ll take to get there.
You’ve probably got plenty of ideas for your new IT business but the hardest part is putting them down on paper. Writing a business plan doesn’t need to be difficult and will benefit you in the long run. Giving yourself a loose schedule with attainable goals lets you keep track of where you need to be and allows you to make changes in good time.
IT consultants assess the technological needs of organizations and provide expert advice to improve operations. When you’re dealing with online data and privacy, there are many rules and regulations with which your business must be compliant, including GDPR legislation. Additionally, consultants are likely to deal with sensitive third-party information that businesses might want to keep confidential. It’s not unusual, then, that consultants are asked to so frequently to sign non-disclosure agreements.
The penalties for failures can be steep, so it is vital for your consultancy business to be on top of your obligations. As an IT consultancy, it is imperative that you are knowledgeable and informed regarding the regulations to reduce the chance of issues arising.
To reduce the overall impact that agreement breaches could have on your business, you should look into anti-virus software and company-wide training for the internal team. Another alternative could be IT contractor insurance as it could aid with any legal or compensation costs that could appear.
The success of your business will be determined by how well your finances are managed. On a broader perspective, being able to make financial projections will allow you to maximise your profits while anticipating rough times. However, smaller financial decisions will be just as important.
For example, you’ll need to decide what you’re going to charge per hour. You’ll need competitive rates to cover your costs while making profits that support growth. You will also have to decide whether you want to employ someone else and how much you are going to pay them. And figuring out what equipment you’ll need to buy and where you’ll conduct your business will also affect your finances.
These are only some of the financial factors that you will have to take into consideration when starting a new business. These will help you to solidify business goals and help you to plan for any business expansion that you want to do in the future.