Starting Your Own Company

[lehorne]

heh, we are pretty much in the same business. With the encouragement of my Aussie buddie, I started my own S-Corp incorporated in Hawaii in '06 (we had this dream of living there with him doing leasing at the now defunct Aloha Capital and me doing equipment/service. Never panned out). But six years in I'm still going on and it was the best decision ever.

Why? Mainly the freedom and everything associated with it. The problem with standard IT service is you're never going to make any serious money, because everything is so hands on. Even with managed service contracts [(exp: 15 PCs, couple servers, firewall going onsite monthly or remotely (We use Kaseya)] I know individual consulting companies who struggle. And if you try to invest too much right away you go out of business (see 'Make it Work' who had red Mini-Coopers for their engineers. WTF?).

I would do it, because working for other people generally sucks a mean dick, but don't expect more than $100k a year unless you have some kind of specialty where you can charge $200 an hour (exp: MS SharePoint or custom software). My company has been making pretty the same money every single year, which I guess isn’t bad in a down-turned economy. But, wanting more, I am diversifying into automated income options via selling tour tickets online where it's not necessary to touch every single deal and invoice. The money just hits the bank account.

Let me know if you need hardware/software quotes as we are a reseller and get next day delivery to OC/LA on standard Fedex Ground rates from Ingram/Tech Data’s Riverside-area warehouse. Some IT consultants don’t want to mess with hardware, but that is my specialty. 15% referral of the margin and it helps close deals going in as a team with a full solution quote.

P.S. Don’t be afraid to charge a lot or go in high. Got one regular client in Vegas who gets a $150 an hour bill and had them for four years. If you always go in low you’ll never make any money.

P.S.S. Post an ad on Craigs for part time engineer, interview them, and subcontract at a rate of $25-$40 an hour. I have a server genius working for me at $40 and charge at least $100 an hour to the client. Pure margin.

[TomAz]

Yes but what accounting software do you use? That's fundamental.

[Mugwog]

Turbo Tax?

[RotationSlimWang]

heh, we are pretty much in the same business. With the encouragement of my Aussie buddie, I started my own S-Corp incorporated in Hawaii in '06 (we had this dream of living there with him doing leasing at the now defunct Aloha Capital and me doing equipment/service. Never panned out). But six years in I'm still going on and it was the best decision ever.

Why? Mainly the freedom and everything associated with it. The problem with standard IT service is you're never going to make any serious money, because everything is so hands on. Even with managed service contracts [(exp: 15 PCs, couple servers, firewall going onsite monthly or remotely (We use Kaseya)] I know individual consulting companies who struggle. And if you try to invest too much right away you go out of business (see 'Make it Work' who had red Mini-Coopers for their engineers. WTF?).

I would do it, because working for other people generally sucks a mean dick, but don't expect more than $100k a year unless you have some kind of specialty where you can charge $200 an hour (exp: MS SharePoint or custom software). My company has been making pretty the same money every single year, which I guess isn’t bad in a down-turned economy. But, wanting more, I am diversifying into automated income options via selling tour tickets online where it's not necessary to touch every single deal and invoice. The money just hits the bank account.

Let me know if you need hardware/software quotes as we are a reseller and get next day delivery to OC/LA on standard Fedex Ground rates from Ingram/Tech Data’s Riverside-area warehouse. Some IT consultants don’t want to mess with hardware, but that is my specialty. 15% referral of the margin and it helps close deals going in as a team with a full solution quote.

P.S. Don’t be afraid to charge a lot or go in high. Got one regular client in Vegas who gets a $150 an hour bill and had them for four years. If you always go in low you’ll never make any money.

P.S.S. Post an ad on Craigs for part time engineer, interview them, and subcontract at a rate of $25-$40 an hour. I have a server genius working for me at $40 and charge at least $100 an hour to the client. Pure margin.

Thank you for a useful reply. Just out of curiosity, when you were just starting up what did you find to be the most beneficial mechanism for pulling new clients? How would you say an effective chop-up of your total advertising budget/available time be split up between web searches, ads in other mediums, referrals, and actually hitting the pavement and hitting office stretches? Big biggest concern at the moment is what it will cost me to build up a client base sufficient to keep me alive while building the company. Since I have practically no capital to prop me up, I'm kinda stuck in a position where I either have to somehow manage to build up a reliable base of enough offices/machines that I can be confident even in my leanest weeks I'd be able to expect 15 billable hours, that's about where I figure I'd be strictly sustainable on a no-frills lifestyle.

[RotationSlimWang]

Actually on that subject, another question: got any tips for how to best construct metrics that estimate the amount of work you should expect/count on a potential client to generate? Obviously there's a lot of variables at play as I've certainly seen, some offices just generate an extremely high numbers of calls based on their complexity whereas others are so content to deal with minimal functionality rather than spend money that they're uncommonly infrequent, but do you have any rough idea of an equation you ever used? Every five workstations or so can be expected to yield X number of hours per month factored by their degree of fuckedupedness?

[p.r. teo]

So your office helped you convince people to fund your continuing production of totally shit movies? Good to know. Fuck an office.

INT. CLIENT'S OFFICE - DAY

ROBERT, a well dressed CEO of a large corporation, meets with RANDY, who is trying to secure a contract for IT work.

ROBERT: You certainly seem very knowledgeable. Tell me, what's the square footage of your building?

RANDY: Building?

ROBERT: Yes, where your office is located. What security measures do you have in place to make sure my information is safe?

RANDY (starting to sweat): Well, you see, I don't really have an office. I run all my servers out of my home.

ROBERT: Your home?! What kind of rinkydink operation are you running here? Get out of my office.

Randy lowers his head in shame and leaves the office, forgetting his three-ring binder he brought in for his pitch.

ROBERT (picking up the phone): Jasmeen, get me Earl Rinds at Sony Pictures on the phone. I have to warn him about that meeting he's got with this minor league IT professional (making quotation marks in the air with his fingers).

FADE TO BLACK

[RotationSlimWang]

I have never once had a client ask me how big my office is at any company I've worked for. I don't house my customer's servers. That would be silly, you see, because then it would put MY company in the place of being liable for their servers. You install client's servers at THEIR locations. Because they want to actually see the thing that they payed 2500 dollars for. Also because it's idiotic to put your clients' ability to run their business at the mercy of both of you having an active internet connection.

Your lack of imagination as well as any semblance of insight is unsurprising, given your "films."

[p.r. teo]

It's spelled "paid" not "payed."

My last bit of advice; if you get a business partner, do a thorough background check. You don't want to make the same mistake I did and go into business with a drug addict.

As far as I know, you haven't even watched my movies, so your attempts to criticize me are ignored like the ignorant comments of envy that I know they are.

[HotHamWater]

You don't want to make the same mistake I did and go into business with a drug addict.

Amazing advice for Randy.

[RotationSlimWang]

Amazing advice for Randy.

::throws business plan out the window::

[guedita]

If he had watched your movies, would his comments of envy be informed rather than ignorant?

[Mugwog]

Don't worry Randy - Boosh is here to support you

[RotationSlimWang]

I've seen his reel. That was more than enough.

Mugwog, explain to me why i should entertain something as annoying and undeserved as you being referred as Boosh. Especially when that name already belongs to a brilliant TV show

[guedita]

Boosh is what Mugwog has tirelessly tried to get the message board to refer to me as, Randy. It's never caught on and, like everything he ever posts about, it's fucking stupid.

[RotationSlimWang]

Oh its supposed to be you? I've never understood that any time he said it. How are you like British absurdist comedy?

[Mugwog]

[lehorne]

Actually on that subject, another question: got any tips for how to best construct metrics that estimate the amount of work you should expect/count on a potential client to generate? Obviously there's a lot of variables at play as I've certainly seen, some offices just generate an extremely high numbers of calls based on their complexity whereas others are so content to deal with minimal functionality rather than spend money that they're uncommonly infrequent, but do you have any rough idea of an equation you ever used? Every five workstations or so can be expected to yield X number of hours per month factored by their degree of fuckedupedness?

No, not really. Some clients we'll receive ten hours in a short period of time, then not hear from them for months. The best way for re-occurring and predictable revenue is to sign customers up for service contracts. Charge them monthly X amount to monitor their servers, schedule one day a month to spend four hours in their office fixing whatever they need, as some clients like to see their IT person live and in the flesh, or remote monitor/update for the ones who don’t care. Maybe offer a discount on bulk, predetermined scheduling. We have most of our clients on three and/or six month maintenance as well, which helps out with reliable hours and also is a benefit to the client by having tuned up machines.

Quarterly Visits

• Perform Necessary Operating System Updates
o Apply Security Patches
o Apply Hot Fixes
• Perform AntiVirus Updates and Scan System
o Apply Virus Definition Updates
o Scan Entire System
• Analyze System Error Logs
o Determine Error Causes
• Confirm Proper Driver Configuration
• Perform System Disk Scans for Errors and Disk Maintenance/Cleanup
o Scan Disk
o Disk Cleanup
o Disk Defragmentation
• Equipment and Software Inventory Management

Biannual Visits

• Perform All Quarterly Steps Above
• Perform Physical Inspection of the System Interior
o Check All Cables & Connections
o Remove Harmful Dirt & Debris from System Interior
o Compressed Air Cleanout

[sonofhal]

1 - Ask for advice.
2 - Mock all who offer advice.
3 - Profit.

[chairmenmeow47]

Don't worry Randy - Boosh is here to support you

STOP TRYING TO MAKE FETCH HAPPEN

[lehorne]

Thank you for a useful reply. Just out of curiosity, when you were just starting up what did you find to be the most beneficial mechanism for pulling new clients? How would you say an effective chop-up of your total advertising budget/available time be split up between web searches, ads in other mediums, referrals, and actually hitting the pavement and hitting office stretches? Big biggest concern at the moment is what it will cost me to build up a client base sufficient to keep me alive while building the company. Since I have practically no capital to prop me up, I'm kinda stuck in a position where I either have to somehow manage to build up a reliable base of enough offices/machines that I can be confident even in my leanest weeks I'd be able to expect 15 billable hours, that's about where I figure I'd be strictly sustainable on a no-frills lifestyle.

D2D aka door-to-door or gorilla marketing. Pounding the pavement. Without the right dominant mindset it can be a discouraging pain-in-the-arse, but D2D is an effective way of gaining IT service clients. Design a flyer, possibly with a promo (exp: Free Hour for new client or site survey analysis or something), and knock on doors asking if companies need “any help”. Always try to get in front of the decision maker and/or get their contact info so you can follow-up with them in a day or two after leaving your marketing material for them to review. Try to close for a face-to-face appointment. If they are willing to meet or speak with you, then chances are they are not currently satisfied with whatever IT service provider they have going on (another company whose response time is poor, an inhouse person who isn’t properly trained, etc.). Get a team together to handle all facets of their business and let them know about it on your first visit: hardware/software/accessories guy (me), a IT subcontractor or two for when you are not available to go onsite (they don't have to know the subs aren't official employees), a phone person, a printer person, a cabling contractor, etc. Once trust is built Company Heads just want you to handle it all and would prefer not shopping for everything and everyone. People fucking hate IT for the most part.

Find a consultant or software company who doesn’t do onsite IT and will provide you with referrals. One of my subs uses onforce.com for jobs sent from out-of-the-area companies.

Invest in an official company website, as potential clients do look you up looking for credibility, then add more domains with common words that will eventually get you to the top of search engines (exp: www.LAbusinesscomputerservice.com , www.losangelesITsupport.com, etc.) and link those domains to your site. We haven’t done much adwords and should probably do more. Mailers haven’t been effective (i.e. mailing a letter with expensive postage to a vertical market). Get business cards with a PO Box that looks like a regular office address (exp: 11 Wilshire Blvd #25). We use Overnightprints.com for cards and flyers. Cheap and always running promos.

Sounds like you might want to continue working for that consultant to maintain income, while also working on building your own customer base on the side. We started with $10k in the bank, but that is only necessary for reselling hardware. If you are just doing service, then you don’t need as much to cover purchases. A lot of clients expect at least Net 15 terms and we haven’t had issues with collecting. Just one or two small, isolated events in six years.

Now, when ready, you owe me a fucking deal! Or at least the opportunity to quote one. Small Business Server, Firewall, Win 7 Pro PC, AV licenses, whatever.

[RotationSlimWang]

Good stuff, yeah I've worked for companies in the past who were big on service contracts, there's a definite advantage in the reliability of the income but at the same time I kinda want to stay away from them so that I can fire a problem client whenever I feel like it. I'll throw one order your way as a thank you for the only actually useful input in this whole thread, but why would I send you all my reselling profits? C'mon now. Orders for new equipment are the easiest big checks I get.

[RotationSlimWang]

Love the idea of buying up other domains just to link to my site. Sounds like a nice, affordable way to get keyword hits without having to name my company something lame.

[TomAz]

Tactics are not strategy.

[RotationSlimWang]

Holy shit do you have a fucking point ever.

[p.r. teo]

If he had watched your movies, would his comments of envy be informed rather than ignorant?

I've dealt with people like him my entire life. My father was a successful businessman, very wealthy, and I didn't starve in any sense of the word when I was growing up. So I'm used to people having envy for me. They see people like me driving nice cars or having the latest electronics, or in this guy's case, being successful at making movies that I get paid to direct, and they look at their shitty lives and instead of trying to better themselves, they try to destroy me and bring me down to their level. That's the only enjoyment they get from their sorry state of existence. So you see, any comments from RotationSlimWang would be born out of ignorance because he hates himself to the point that he lashes out at someone like me for being and having everything he's not.

If he had watched my movies, though, he would find he likes them and instead of being a failure as a filmmaker, he could try to befriend me and get a leg in the door and maybe even get to where he wants to in life.

I've seen his reel. That was more than enough.

Oh, so you have seen "Lincoln" then? You have seen "The Life of Pi" because you've seen the trailer? A trailer or a reel don't show everything about a movie. You can't make a good judgement about a movie with just that as a basis.

[RotationSlimWang]

You don't make Lincoln, and you don't make Life of Pi. You make horror schlock with absurd premises and terrible cliches. Tripe is extremely easy to spot, even at a glance.

[stinkbutt]

I've dealt with people like him my entire life. My father was a successful businessman, very wealthy, and I didn't starve in any sense of the word when I was growing up. So I'm used to people having envy for me.

What will your son say about his weekend dad?

[RotationSlimWang]

Hahaha, damn, you guys are better at remembering how he got dealt with than I am.

P.R., what did your neglected son say about your office when he finally got to see it during the month you had custody that year?

[lehorne]

Good stuff, yeah I've worked for companies in the past who were big on service contracts, there's a definite advantage in the reliability of the income but at the same time I kinda want to stay away from them so that I can fire a problem client whenever I feel like it.

We keep them pretty informal, so they aren't really drawn up contracts...more like verbal commitments to do specific work in the future. No blood on the line or anything.

but why would I send you all my reselling profits? C'mon now. Orders for new equipment are the easiest big checks I get.

Well, was hoping you wouldn't setup as a reseller. Some service companies don't like dealing with all the taxes and thin margins. But I'll send you my contact info anyway as we still may be able to work together in some capacity (sub each other out for jobs in our respective territories, maybe use our large $100k credit line with TD/Ingram on a big equipment lease deal, or something else creative and mutually beneficial).

[lehorne]

Love the idea of buying up other domains just to link to my site. Sounds like a nice, affordable way to get keyword hits without having to name my company something lame.

Yeah, genius, and courtesy of one of my TV (we sell LCD/Plasmas to most the local race tracks and casinos) customers. The IT Manager of Hawaiian Gardens Casino. He also "buries" negative press on search engines for people pushing it six or seven pages back where nobody ever looks.