How to Start an IT Consulting Business

IT continues to change the way people go about business, mainly because of how it has made life easier. There is virtually no modern-day business entity that has yet to incorporate IT into its business operations.

Whether it is the use of advanced security to protect data or the management of databases, IT is used in varying degrees across different industries. 

It is clear that IT is widely sought after and lucrative. Gaining expertise in this field is a big advantage as every top organization requires an IT expert. So, if you are an IT expert, starting a consulting business is a great idea. 

 Without a doubt, starting a successful IT consulting business comes with its challenges. You are setting up a business to solve problems for others. However, this is the same for any successful business in any field. There are some critical steps you need to take to launch your business successfully. Continue reading as we highlight how to start an IT consulting business.

1. Determine Your Skills

Being a consultant means being a professional in a particular field. People expect you to be able to solve their problems for them. To be able to do this effectively and not come off as a fraud, you must first determine your skills. 

As earlier stated, IT requires proficiency in different types of skill sets. These skills include both hard skills and soft skills. The hard skills usually require getting a university degree or a professional certification based on different IT skills. 

They include database management, cloud computing, data analysis, programming, machine learning, network security, software development, web development, operating systems and IT technician, etc.

You also need to learn some soft skills such as problem-solving, leadership, communication, organization, critical thinking, creative thinking, interpersonal, decision-making and time management skills. These skills are sometimes inbuilt, while some can be acquired through reading, watching beneficial videos or deliberately learning them. These skills will be handy when acquiring and managing customers and your employees.

You should evaluate your current skills needed for the IT consulting role. This will help you work on your weaknesses and improve on your strengths.

2. Do Market Research to Find Your Niche

The next step on how to start an IT consulting business is to conduct market research on your niche. After evaluating your skill sets, you will need to find your niche. 

IT is a broad field, and you will need to specialize in some areas. Your niche will be determined by the areas you have identified as your strength. This is because you are more likely to solve problems in these areas more seamlessly, since you are already an expert there and it is something you enjoy doing.

However, this is not where it ends. You need to be sure that the areas you have chosen to specialize in are in demand. In other words, you need to carry out market research to ensure your area of expertise is a current challenge for prospective customers. 

When the supply of your skills is at least met equally by demand for them, it is a good idea for you to start your business. You can worry less about your profit margin, given the opportunities that exist.

You need to also determine the role you want to play in your prospective customer’s life, although this sometimes does not depend on you. The customer may want you to be an outside consultant, where your main role will be to provide fresh and creative ideas different from what the solutions the customer already came up with. 

Your role could be that of an expert consultant, where you can provide expertise in areas where the customer lacks experience or know-how. The customer may even want you to work as a full-time partner. In essence, you should determine your consulting model, which will guide your operations.

Also, your market research should help you determine what your main differentiator will be. This includes cheaper pricing, a wider range of services than your competitor, or years of experience. Furthermore, your research will provide you information on who your ideal customer is. This includes their background, pain points, estimated revenue, age and location.

3. Register Your Business

The next step is to register your business. This indicates that you are ready to make your business entity official. It will require you to have a legal name as well as a Doing Business As (DBA). 

The difference between them is that the legal name is the name the business will be registered as, while the DBA is the alternative name which also incorporates what the business is about.

You also need to decide whether you want your business to be a sole proprietorship, partnership or limited liability company. This will be required when applying to register for your business. It also ensures your business is properly structured and ready for operation.

4. Invest in Tools

Despite your expertise in IT, you cannot do it all alone. To run effectively and efficiently and to also be able to serve your customers, you need to invest in some tools. The specific tools you should invest in will depend on your business context and area of expertise.

Generally, you will need a computer and operating software. You might need to subscribe to this software. Other things include office supplies (the amount of investment depends on whether you plan to use an office space or you plan to work from home). 

These supplies include desks, chairs, safes, equipment for ventilation, cleaning tools, etc. You will also need insurance to help you cover expenses if you suffer loss or damage to your tools.

Additionally, you’ll need a website where people can discover your business. Your website will contain all the necessary information about you. This includes the problems you solve, a brief history of your business, what differentiates you from your competitors, your processes and your team. You can create a site by investing in website-building tools such as WordPress or Wix.

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The image below shows the interface of the website-building tool, WordPress. Using this tool, you can also customize your site to your taste.

You may also choose to outsource the project if you have difficulty using the website tool.

5. Hire Staff 

Next, you will need to create a team to help you carry out your day-to-day activities. Your staff size is dependent on the size of the business. However, that is not the only important factor to consider.

New hires are like investments in your business. They will only yield returns if they are competent and committed. Therefore, when hiring new staff, you must ensure they are qualified for the job. You need to test their soft skills, such as teamwork ability, creative ability, analytical skills, communications skills, and learning agility. 

You should also ascertain their level of experience and expertise based on the different fields you want to fill. You can do this through the setting up of competency-based interviews.

To attract qualified candidates for the role, ensure you properly list the job requirements in a job ad you are putting out. The hiring process must also not be cumbersome so as not to discourage potential applicants from abandoning the job application.

In addition to hiring qualified individuals, you should also look to hire interns. Given that they do not have experience yet, they are less expensive than experienced hires. The interns can take care of the less technical aspects of the business while they pick up valuable experience and learn on the job.

You must also draw up a remuneration structure on the benefits and compensation that your staff will receive.

6. Determine Pricing

The next step on how to start an IT consulting business is to determine how much you’ll charge for your services. You can use similar prices set by organizations that offer similar services to yours. Whatever price you decide, you must ensure that it at least takes care of your business’s overhead costs. 

You must also decide how you will charge your customers. This could be per hour, per project or based on retainership. Given that you are just starting, you may use the hourly option.

You must properly position yourself as the go-to business for creating and implementing IT solutions to ensure prospective customers have no issue meeting your prices. Therefore, ensure that your pricing is accompanied by some deliberate brand efforts that show what differentiates you from similar businesses. 

These efforts should also show why the prospective customer should choose to work with you rather than with some other business. Some examples of these brand efforts are emphasizing values such as cost-saving, speed of delivery on projects, and efficient processes.

7. Build an Effective Customer Communication Strategy

When it comes to customer acquisition and retention, communication is key. Adopting an open line of communication shows prospective customers can easily reach you. When this happens, they are more likely to do business with you.

When you have acquired these customers, and you have an ongoing project, ensure you are in constant communication with them using the communication tool they prefer. Doing this allows you to keep them updated on the status of their project.

By establishing an effective communication strategy, you can also attend to complaints and inquiries.

Doing all these will show that your customers are important to you.

8. Learn about Marketing

You need to get your business out there and make people aware of your solutions. This is where marketing comes in. Marketing is a vital activity you have to embark on if you want as many people to engage with your business as possible.

As earlier mentioned, you will need to build your own website, where prospective customers can come to learn about your value propositions. You should ensure that the website is SEO-optimized, which means that the name of your business or your website content can pop up whenever customers search for related keywords about your brand, for instance, when they type “best IT consultant,” etc.

In addition, you can start a blog on your website where you educate your target audience and also display your thought leadership. Examples of business topics you can blog about include IT related issues like “best IT trends to watch out for.”

Basically, any topic that your potential customers could be searching for.

Moreover, attend more events, real-life and virtual, to connect with other experts in the field and potential clients. Create the best digital business card filled with your company’s contact details and share them with other participants. This can be instrumental in attracting potential partners and clients.

Your website can also serve as an avenue to update your customers on the goings-on in your business. This can be done by creating a press release section on your website. You can use a press release template to get this done.

Other aspects of marketing you need to be familiar with include social media marketing and email marketing.

If you are unaware of these marketing tools, you can learn them by watching videos online. If this takes your time, you can employ a marketing analyst to take care of that aspect while you continue to learn at your own pace.

You can also join communities on social media related to your field where you can network and collaborate with fellow IT experts and enthusiasts. By sharing your knowledge, it increases your level of exposure, and you may also get referrals.

In Closing 

Starting an IT consulting business is no mean fit. As with any business, it comes with its own challenges. These challenges can be surmounted if the steps highlighted above are followed.

To recap, they include: determining your skills, where you are expected to hone your hard and soft skills and choose the most relevant ones needed to thrive as an IT consultant.

You should also find your niche based on the market research you conducted. You must register your business to be regarded as a legal entity. Having a registered business also builds trust among your prospective customers.

You must also invest in relevant tools that will help you become more efficient on the job. Then, you have to invest in a team by hiring qualified staff. After that, you then determine your services and the pricing of these services.

Furthermore, you create a strategy for customer communication, and lastly, you learn about marketing so as to increase awareness and drive customers to your business.