I'd like to become an IT consultant
April 4, 2006 7:27 AM   Subscribe

I am giving serious consideration to setting up as an IT consultant. I'm well proficient in Windows and Mac, Office suites; applications and web technology. In addition, I enjoy talking and fixing computers. I've done some such already, but on a small scale and for people I already knew. My question is: what kind of things should an IT consultant be able to do, what are common requests, what should I charge and how (per job/per hour?). Are there any potential pitfalls? Is it a good idea? Thanks a bunch.
posted by dance to Computers & Internet (13 answers total) 2 users marked this as a favorite
Response by poster: Oh - and for those in the UK - perhaps I ought to ask - do I need to register as a business or am I okay for a month or so while I trial it? Thanks again!
posted by dance at 7:30 AM on April 4, 2006

"IT Consultant" is a huuuuuuuge category. Narrow it down.

If (as it sounds like) you're talking about helping relative novices disinfect their home computers, etc -- a noble and useful line of work, to be sure -- then don't use the words "IT" or "Consultant": your potential clients won't know what it means, and it's likely to scare them off.

Finding clients is (now and always) the big hurdle. Don't quit your day job. Seriously. Ease into it slowly; it can take a long time for word of mouth to spread and for you to find your niche.
posted by ook at 7:40 AM on April 4, 2006

You don't need to register as a business, but you do need to tell HMRC that you're self-employed. Otherwise it's a 100 quid fine at tax filing time.

The rules are pretty loose for sole-traders, but they need to know you are one.
posted by godawful at 7:44 AM on April 4, 2006

If you start working for yourself you have to tell HMRC about it (i.e. register as a sole trader) less than three months after you start. You don't need to register as a company, but might like to do so as your profits increase.
posted by altolinguistic at 7:52 AM on April 4, 2006

As ook says IT Consultant is a huge category and the rates can go anywhere from peanuts up to a couple of thousand per day. If you're just aiming to help the casual home user I'd guess you'll be at the lower end of that scale and won't need to register. It gets a bit trickier as you start to earn more, you'll need to start thinking of registering for VAT, Liability insurance etc.
posted by lloyder at 8:09 AM on April 4, 2006

I've also given a decent amount of thought to doing this. I'll echo ook and say that you really need to narrow it down. Even though you probably know a lot about computers, you'll probably still want to learn even more if you want others to consider you an "expert." This could mean keeping up-to-date with spyware and virus problems if you're doing home support. Or learning about security issues and the intricacies (sp?) of MS Office if you want to do the corporate end. Or Web design/support, and so on... you get the idea.

One problem I've faced is how to transition away from my "day job." If you're trying to do end-user/in-home or you have flexible hours in your current job, that wouldn't be a problem. However, for me, I want to do the corporate end, and I don't really have a flexible schedule. So I have to take into account that most of my interaction with clients will need to be during business hours.

I'd recommend reading something about starting your own business as well. I spent a recent business trip reading "Small Business for Dummies" (ironic, I know). It has a really good section up front about helping you decide whether a small business is really right for you or not. Some of it might be only tangentially useful since it seems you're in the UK, but they might have different version (or a completely different book) for over there.

But there's still a lot I don't know about the business, and that's why I'll be watching the other responses to this question right along with you.
posted by cebailey at 8:11 AM on April 4, 2006

Ok, you have the technical skills.

But can you sell yourself? You didn't say *anything* about how you're going to market, who you're going to target, or what exactly you'll be selling. Based on that, I'd say no, don't do it until you have a VERY good set of clients that are already willing to pay you enough for you to live on after taxes.
posted by SpecialK at 8:22 AM on April 4, 2006

I'm assuming the same as ook, and I'll second his advice.

I'll bore anyone who wants to listen (and plenty who don't) that this is the business of the future. You have a car, right? If it breaks down you call the AA. You have a computer? Who you gonna call?

Companies like Geeksquad are trying to make a business out of this in the U.S. Look at their prices and weep. They've actually been bought by Best Buy (equivalent to Dixons) but it's all to play for.

Here are some of the drawbacks. You cannot tell, in advance, how long a 'job' is going to take you. It could be a two minute business of pushing home a connector or endless hours chasing stubborn spyware. As a result it's very hard for you to set realistic pricing in advance. Your customers, quite reasonably, will want to know roughly how much it will cost to solve their problem. If you charge by the hour, you might find yourself unpopular when the time starts to stretch.

You also have a nasty potential liability problem - at worst, you remove a virus from a computer which subsequently electrocutes the owner - and they blame you. You really need professional indemnity insurance but the premiums will hit you hard (if you can get cover at all).

I believe you'll find there's an epidemic of spyware out in the wild, dealing with this will take much of your time. You'll need to like people just as much as you're interested in computers, be enormously patient - people will ask you some very strange things - and be prepared to be paid £15 per hour just to put paper in some idiot's printer (and smile while you're doing it). It can be fun but the difficulties over managing your time profitably will probably mean that as a one-man-band, you'll never make much money.

You can see why the majority of IT Consultants hole themselves up in some corporate castle, charge a fortune by the hour and justify it by possessing some very rarified skills.

If you do start doing it successfully and you have some money coming in, you'll need to consider Incorporation and VAT registration. Incorporation helps primarily to limit your liability and manage your tax and NI, the drawback is that any money in the company is hard to get out to spend on beer. VAT registration is a nightmare but is compulsory if your income is more than a certain threshold (about £55K). There is a one-off windfall associated with VAT registration if you are buying a lot of equipment, after that it's all pain. An accountant will cover these areas and others properly.

You'll find the Lloyds Small Business Guide the best basic primer. You might also want to talk to Business Link - your mileage will vary.

Best of luck though. If you can make this work, make the transition from doing it yourself to successfully managing other people doing it on your behalf, and do the whole thing consistently and profitably, then there are some Venture Capitalists who would like to meet you. Really.

more more
posted by grahamwell at 8:27 AM on April 4, 2006

If you'll excuse the self-link, in 2003 I wrote some articles about my one-man tech support practice. I offered my advice on getting started in the business. The articles received much play at the time and I still get emails about them
posted by Mo Nickels at 8:46 AM on April 4, 2006 [2 favorites]

A former co-worker of mine is a half-time consultant (the other half of the time he works afternoons as a help-desk tech -- the arrangement works well for him). I asked him about his rates...he said he typically charges $50US an hour. The "professional" rate in my area is usually over twice this, but he says that, while companies are willing to pay such rates, individuals usually aren't. He doesn't hesitate to double his rate for evening and weekend work.

Another former co-worker charged a full $125US an hour to help a small company set up a Windows network, including fileserver and multiple workstations. She doesn't do this regularly, but the company was willing to pay it and she made a tidy sum from the work.
posted by lhauser at 9:23 AM on April 4, 2006

Response by poster: Firstly, thanks for all the responses! Secondly, a follow up:

-I like people nearly as much as I like technology: I'm quite happy to be asked inane questions so long as the questioners appreciate my answers! So far this has been the case.
-ook - Whilst it may be that I end up just clearing out spyware and grahamwell - filling printers with paper, the dream is to also to advise on SEO, bust down buzzwords and make the devices usable to their owners.
-specialk - I'm a student doing a postgraduate course. Most like on bar work. This hopefully would pay a little more and be interesting and be good for my CV. I hope I can sell this, and I hope there's a market for it!

Any further comments would be appreciated!
posted by dance at 10:30 AM on April 4, 2006

A related previous response.
posted by RikiTikiTavi at 12:17 PM on April 4, 2006

You should read Steve Friedl's So you want to be a consultant...?.
posted by Sharcho at 5:55 PM on April 4, 2006

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