Project Management

Two questions about getting started in IT consulting

Read advice on where to find the best troubleshooting tools and how-to guides, and how to determine what to charge for IT consulting services.

TechRepublic reader Sharnetta Seymour sent the following Ask Chip request:

I have been a full-time IT Specialist for the same company for 15 years and we are always at least 4 years behind in technology. I would like to start up my own consultant firm, however I definitely need to brush up on my IT troubleshooting skills for current pc issues that customers may have with their mobile device or pc/laptop. Two questions:

How do I find the best (free) troubleshooting tools and How To guides?

How do I determine what to charge for various IT trouble requests (i.e. training, virus removal, memory dump errors, hd backups, routine monthly pccleanup process to speed up pc, RAM install, hd install etc...

That sort of work isn't my consulting specialty, so I'm going to lean on our community of readers to provide their usual insightful comments in the discussion below. Nevertheless, I think Google might be able to help us with the first question.

Seriously, though, I find search engines to be a great tool for locating the latest information about just about anything. However, you don't want to treat the first answer you get as if it were a magic spell. Take the time to understand what you find, and to compare different results against each other. You'll often find that an easy answer makes assumptions about your situation that don't apply. You'll also learn which sources tend to be more authoritative. On Unix and Linux systems, the man pages usually have the definitive answer -- but beware of differences between the Linux distros or Unix versions. On Windows, MSDN is the official word, although it doesn't always answer the question you asked. Open forums often have great answers, if you can find that one gem among all the responses from people who just like to hear themselves. An article on a site like TechRepublic has the advantage of authorship by someone who was paid to research it, as well as an editor's review. It's still not guaranteed to help you, but it's less likely to lead you down a garden path.

Sharnetta's second question may be more difficult to answer. A consultant's ability to tune their prices to their market is an art form that improves with experience. It usually depends on your specific geographic market as well as your niche. The basic formula is simple: provide more value for the money than any other alternative your prospects could choose. The tricky part is in assessing and communicating the value you provide. For basic system maintenance and administration, you don't typically want to charge more than your competition -- until you develop a reputation for doing a much better job. If you can get into the business of selling peace of mind, then you won't have trouble billing for it. Even in a tough economy, if it's clear that you're saving the client more money than they're spending on you -- for instance, by avoiding disasters -- than they'll be willing to pay. The trick is to communicate exactly what could happen if they try to cut corners to save a few bucks.

If someone else comes along with just as good a story but a lower pricetag, then they may steal your business. If that happens, then you must evaluate whether they're able to deliver on their promises for less (in which case, you may be charging too much), or whether they're over-promising. In the latter case, you may be able to warn your client, but be careful how you word that so it doesn't come across as sour grapes. Sometimes you just have to let the client try it for themselves, then graciously accept them back into the fold and bind up their wounds after it all goes south. At that point, you may not even need to remind them of your relative value -- but gratefully acknowledge any statements they make about it.

All this implies that you have acquired a decent knowledge of your competition. The more you know about what's available, the better you'll be able to create a story that outsells them. Don't panic, though. Nobody knows everything about their market, and you can learn more about it as you go. Just keep your eye on it, and beware of fixed beliefs. Google can be your friend here, too. Search for your specialty and location, and see what comes up. Then work to get your site on that first page.

Ask Chip

If you have an IT consulting question, email it to me or use the "Contact" link by my picture at the end of one of my articles, and I'll do my best to answer it. Read guidelines about submitting questions.

About

Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant b...

10 comments
mike-022
mike-022

I agree that there are a lot of things to consider on it.In Finland i notice some IT are really good but their services is quite not that so expensive.In part of Helsinki i seen a document management service at http://www.m-files.com/fi/ which they the leading company on providing it and i think it is not because of the price it is the quality of work.

danxprt
danxprt

Let me recommend our online consulting tool for your online consulting business: http://XpertAnswer.com Just create and build your consulting form with it and use it as a widget or link in your website, blog, signatures, etc. With this tool, you can start accepting credit card payments for your online advice very easily. Thanks! Dan

Adekunleb
Adekunleb

As a consultant who wants to remain in business, it is important for you to improve your customer service with your client by, requesting for regular feedback and at times spending some time with them in their offices will make they feel you are offering them more value for what you charge.

holarsen
holarsen

I have been self-employed in UK for 7 years now. I have found a special area where it has been possible to carve out a regular income, but if I was to start all over today, I'm not sure I would do that - at least not alone. You can make the calculation - How much do you NEED to make per month. How many customers can you expect to reach initially - and on longer term, and therefore how long can you survive on a "partial" income? Also, remember as self-employed you will need to set aside time for: - "Selling" your services - For updating your skills - For adding new skills - For that one problem, where you should know the answer but you don't. You might have to resolve that one for free, or at least within an already quoted price - For accounting - For you being sick - Vacation... (you wish) - Transport (expenses you can charge your customers for - but probably not the time) - Follow or even invest in new technology Etc. etc. For the customer, you probably need to be able to handle almost all their IT problems in one way or another, otherwise the customer will have to get external help for solving "that" problem - and then you have a competitor in the door at YOUR customer... As a new service provider, you should consider who you believe you potential customers are: - Private users: They have bought a PC for next to nothing. How many hour of support can you offer before it is cheaper to get a new PC (not saying that is what they should do, but for comparing). - Small companies: Too small for having internal IT - from my experience they are quite price sensitive, are may be dependent on short response time since "no-one can work when the printer doesn't work", and you may be onsite with another customer. - Larger companies - more business to be had, but also more people competing for that business. Often have internal IT-resource, an you ay be able to supplement existing staff: - in case of staff shortage - at special projects - by supplying special knowledge (but here you are depending on being able to keep your knowledge level on a higher level than the internal staff, who have few or none of the other work/admin tasks you have as self-employed) Then there is the whole question about competing against "one-stop providers" the VARs and larger companies that provides services AND soft/hard-ware, PC's, Servers, Network equipment, Licenses etc.. To compete against them you may have to spend the time and effort in setting up with different resellers (because you are unlikely to be big enough from start to be able to get a deal with a distributer directly), getting credit lines sorted out and maintain an relationship with those suppliers. Later on you will have to handle equipment deliveries, RMAs etc. This can also be quite a lot of work. Im not saying that you shouldnt start your own business, but there are much more to running such a business, than being good at solving a virus attack or replacing a burned out motherboard. I see a lot of people fail here because the i.e. have no idea about how to sell themselves or how to keep a business ledger. If I was to start up today, I would be looking for 2-3 people with skill sets that has a slight overlap with mine, someone who are better at selling than I am, someone with a nack for administration/bookkeeping, but who preferably also can supplement me, if there is a crisis at one customer, at the same time as Im rolling out a large PC/Server replacement at another customer. Best regards Henrik

Matthew G. Davidson
Matthew G. Davidson

It is very important to research the companies that perform the same services as you will be and match their pricing. Contact these companies and inquire about their pricing and services as if you were a customer shopping around. You don't want to price yourself out of the market and you don't want to attract clients that will frustrate you because they want free services. Check out the Technibble Forums (http://www.technibble.com/forums/) and some LinkedIn Groups...there is a wealth of information out there for you. If you are looking for refreshers on Technology look no further than YouTube; with EliTheComputerGuy, ProfessorMesser and so many others you can learn quite a bit.

Greg Miliates
Greg Miliates

Like Chip mentioned, value determines price. However, a mistake I see a lot of consultants make is to frame their services around relatively low-value tasks; that automatically boxes you into lower pricing tiers. If instead, you frame your services around things that have intrinsically higher value to your prospects/clients, you can more easily justify and get paid a higher effective hourly rate (by your effective rate, I mean the amount you're paid compared to the time you work--since you may not want to do (and there are good reasons why you should avoid) hourly billing). Your value and how you frame it will largely be determined by your niche and who your customers/clients are. Defining your niche and your ideal customer is another thing I consistently see consultants fall short on--oftentimes because they simply don't know they should be doing it, don't know how to do it, or do it halfway but think they've been thorough. Your niche and understanding of your customer drives virtually all other business decisions.

matezz
matezz

I had similar questions about 12 years back when left secure IT job and got on my own. How you know when you are on the right track? When you become the go-to guy/gal for any technology questions. But will consultancy alone make the buck/living? IMHO not today. Full IT service is what you would have to offer. Most SMB's like to have relationship and access to someone they trust. Put it simply, if they know that you can deliver great IT service, they will trust you with consultation. And as pricing goes, it is situational. I would recommend anyone starting in this field on their own to ask for help and suggestions @ your online/local IT community (preferably your mentor if you have one) case by case basis. Good luck! I love IT :)

ih8computers.911
ih8computers.911

I have been self employed for about a year and the most difficult obstacle is to find your niche (still working on it). Fortunately I have clients who have been very supportive in helping me find my way. I priced myself lower than my previous employer and different hourly rates for onsite work or remote work. One note: if you are working with non-profit organizations it may be necessary to negotiate; funding for services is quite different and more than likely limited.

sysdev
sysdev

There are a lot of things to consider. One of the big ones is 'Cheaper is NOT better'. If you price yourself lower than you should, you will be viewed as incapable of doing quality work at the level the client wants and needs. Being the most expensive choice is also not a good idea in this economy. Determine the lowest and the highest practical price and put your rate somewhere between. Once you get started and have found the proper rate for you and your experience, keep that rate. I have not changed my consulting rate for 25 years. Also charge separately for travel and living expenses. If the client wants you to build it into the rate and you do not know what the travel and living expenses will be, you will have to figure it out.

Editor's Picks