How to Start an IT Consulting Business

Prospects of IT Consulting Business

If you are planning to start an IT consulting business, the good news is, it’s a growing business, which is recession proof too. Thanks to the digital age and increasing use of IT in our corporate and daily life. The services related to IT are diversifying and people are in dire need of professional IT consulting services, but the market is in short supply of it.

Shortfall in supply, increasing demand

There is a huge shortage of manpower available in this industry. Furthermore, the demand is increasing day by day. There are enormous prospects as people are now looking for professional IT consulting services in different fields. So, before you start your IT consulting business, determine which segment you specialize in. You can focus upon a specific segment such as ERP consulting, software development or networking. You can even go further and define your core specialization such as ERP for marketing or accounts to be more specific and meaningful for your prospective clients. H3 Basic Skills Required To Run an IT Consulting Business

There are no specific skills required to run an IT consulting business, or any consulting business whatsoever. You should have some prior knowledge of the segment, business acumen and some passion to make it big. You should also have ordinary business skills such as:
A. People skills
B. Communication skills
C. Analytical skills
D. Sales skills
E. Ability to synthesize
F. Creative ability
G. Computer skills

In addition to the skills related to providing advice regarding IT services you are going to offer, you should know how to manage, estimate, deploy, implement, and administer IT systems on businesses' behalf.

Investment and Earnings in IT Consulting Business

You just need an office and a land-line number (optional), to start an IT consulting business. If you have even one client, you can start earning right from the first month. You can charge a fee for your services and earn commission on the IT systems being deployed by you. You can also charge for training. However, you cannot predict your earnings in any business before starting it.

Focus and Converge around a Specific Segment

You should also focus your marketing efforts towards a specific clientele, so that people may spot you for it, instantly. However, it should not block you from providing other services. You know that to survive as a business, you need to provide comprehensive solutions and should not confine yourselves to some specific services. You can outsource these additional services through subcontractors, in order to facilitate your clients. It is better to form an LLP (Limited liability Partnership) and to establish a legal entity instead of operating as a sole proprietorship. To establish a level of trust and to avail government benefits, you “have” to incorporate your business. You should also consult a chartered accountant for tax filing, which is utmost necessary to avoid any hassle in future.

Create a Website of Your Business and Promote It

You should also have a proper website representing your business, services, location and testimonials. You should optimize your website for industry specific keywords and perform a local and global online marketing, too. For that, you can mark your presence on local maps and do Internet marketing with location keywords. Such as, you can include certain keywords in your SEO marketing campaign including the names of the city and the state, you are operating in. For example, "ERP consulting services in Mumbai" would be the ideal keyword, if you are operating in Mumbai area.

Do Aggressive Offline and Online Marketing

You should also perform social media marketing and run “Pay-Per-Click” campaigns, if you want to have more traffic on your website and therefore more business leads. Your sales and marketing campaign should include both traditional marketing and web marketing. You should attend all the industry specific seminars, conferences, workshops, meet ups and press events, so as to increase your market penetration and build more relationships. You should spare no opportunity to increase your PR and networking. It brings references and your job becomes easier than ever. It also reduces your advertising costs.

Prefer Long Term Contracts

You should go for long-term contracts and bigger corporate assignments, which would keep you in business always. Otherwise, even if you are hectically busy one week, you might have nothing to do the next week. It puts strain on your working capital.

Keep Your Organization Slim and Trim

It is also recommended not to focus on hiring permanent employees. Instead, you should find committed freelancers and subcontractors, who can perform your tasks as and when needed. It will add to productivity and prevent a strain on your payroll budget.

Risk Factors involved in IT Consulting Business

Just like other businesses, there are following risks in this sector:

A. Competition: You have to assess your competition beforehand.
B. Cost structure: You should charge your fee according to the market trends.
C. Distribution: Make sure that you are able to service the needs of your clients in time.
D. Employees: Your employees should be competitive and trained.
E. Errors and omissions: You should be quick to address the errors and omissions if any, before they cause a havoc and loss of client or your own prestige.
F. Financing: You should have the necessary working capital to enable you to finance the required equipment and systems.

Last Updated on 30 August 2012