By Peter Cannone
Let's face it. The workforce has dramatically changed over the past few years as bonuses shrink, health insurance is still a bit of a wild card, and technology affords us the opportunity to work remotely. Given the recent changes in so many traditional work arrangements, you may be questioning whether your current full-time IT gig is worth it.
If you've done the math, on paper it may look like the independent route is more lucrative, especially if you've mastered any of the IT skills that are in high demand these days. These include application development, mobile apps and device management, and networking, according to Computerworld's annual survey of the 8 Hot IT Skills for 2014.
While you may be a highly sought after programmer or DBA, this doesn't always translate into creating a successful business. Still, you may be drawn to becoming your own boss.
Finance-related questions can be awkward, yet odds are they are foremost in your mind if you're considering opening your own IT consulting practice. Below are the most frequently thought — yet rarely asked — money questions.
- Do you have enough cash to cover your expenses for a minimum of three months?
- Are you prepared to go without a steady paycheck for the first month or two knowing that most invoices are net 30 days?
- Have you factored quarterly state and federal taxes into your monthly expenses?
- Are you diligent about tracking expenses?
- Have you determined a fair and realistic billing rate based on your skills and an analysis of the competition?
- Are you willing to dedicate a non-billable day every quarter to take a class or otherwise hone your skills?
- Do you have health insurance, and/or have you priced your options with regard to COBRA or plans for self-employed professionals?
From long stretches of solitude to networking among thousands at local conferences, the following questions will help you figure out if being a 1099 (assuming your business is in the United States) will give you a decent work/life balance.
- Do you prefer to work autonomously or as part of a team?
- Do you have a network of colleagues you can freely contact for advice?
- Are you comfortable with ebbs and flows in your workload, including weekends, or do you prefer to work a steady 40 hours per week?
- Do you genuinely like attending networking events to expand your circle of contacts and look for new business opportunities?
- Can you comfortably work out of your house every day, or do you need a separate office?
Setting up your business
Now let's consider the 'business of the business." The following questions and links to resources will help shorten the time it takes to get your business up and running.
- Do you have a business plan?
- Have you already lined up your first client?
- Do you have the essential startup tools, including a computer, software, and a website?
- Have you determined whether you want to be legally incorporated as an S Corp or an LLC?
- Have you determined which administrative tasks, such as taxes, are better handled by a third party so you can focus on servicing your clients?
- Are you prepared to say no to a potential new client if it's going to compromise your principles or your business model?
- Do you have enough years of experience and proven successes that former colleagues will refer business to you?
- Do you see yourself doing this as a long-term career move or as a bridge between traditional full-time jobs?
As you've likely determined at this point, going out on your own can be a thrilling, scary, and rewarding experience. These questions may have helped you reinforce the fact that your business plans are rock solid. Alternatively, you may have discovered there are still some unknowns to figure out before you hand in your letter of resignation.
While only you can answer whether being your own boss is the next best move in your career, the more prepared you are before you take the leap, the higher the likelihood of success.
Peter Cannone is the CEO of OnForce and was recently named to the 2013 "Staffing 100" list of top industry influencers, as reported by Staffing Industry Analysts.
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- 10 things I wish I'd known before becoming an IT consultant
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- Starting a consulting business in an unusual market
- Starting a project management consulting business without coding expertise
- My early years in IT consulting: What I did and didn't do well