Source
r/smallbusiness•
karatecoder

Starting a new small IT business. What are (just a few) of the most valuable lessons learned?

The background: I have been doing software/web development for about 15 years. I have a lot of technical and domain expertise. I feel like it's finally time to put that experience to work for me, not for someone else. I'm not looking for millions of dollars, or even creating a big company. I'd be happy just employing myself, support my family, and help my clients/partners. I'm expecting to do consulting work in software development for web, cloud, and mobile. I'm also hoping to partner up with some former colleagues on some product work. I don't really have much practical experience in sales, marketing, accounting or things like that. So, other small business owners or consultants, what are (just a few) of the most valuable lessons you learned?

Posted Apr 27, 2012, 6:13 PM UTC

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tvz1•

It's easier to support a smaller customer base of higher paying clients than a larger customer base of very low paying clients. Basically, do not undersell yourself or you may have a hard time supporting the work you do, thus damaging your brand.

Will you be paying for employees or outsourcing any aspect of your operation? Remember, "If you pay peanuts, you're gonna get monkeys"

5
MrDreamThiefFather & Sons Powder Coating•

"If you pay peanuts, you're gonna get monkeys" -- This is the best quote I've heard in years. May I use it?

3
karatecoderOP•

It's just going to be me. I plan to do it all myself. I hear what you are saying about being selective with clients. I have some pretty specialized skills, so I plan on using them. I'm in the US, so I don't expect to compete with offshore developers who can churn out out a lot of code cheap. Thanks!

2
icewater•

This is really good advice. Although I knew this when I became self emplyed in IT 2 1/2 yrs ago, I'm only just now putting it into practice. I was worried about getting any and all cutomers so I was dealing with really crazy people expecting me to do magic for cheaper then some 15 year old on craigslist. I also have a retail shop so its a little different because of the overhead but I try to avoid working with people who waste my time. I still need to raise my prices but I at least avoid time wasters and penny pinchers.

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suzhouCN•

My approach has actually been opposite. I actually have a large base of low-paying customers and the experience has been great. I built up my customer base one at a time. After almost five years in business, I am starting to go after higher-value customers...in part because of the referrals from the 300+ low value customers makes it an easier sale. I'm not dependent upon winning (or losing) a single order because each one is relatively small, but en masse it adds ups.

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BornInTheCCCP•

Meet your clients over food or drinks. You do not want to be just a number or an email.

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amacg•

I think a lot of people, and I'd include myself, have or currently expect things to just happen. I'm a firm believer that you have to make the right choices and align yourself for success.

In this regard, you should meet likeminded people, be in a place that fits your ambitions, organise your money so you can take advantage of opportunities.

Above all, network. I don't think there's a barrier now for anyone with access to the Internet not to.

1
a1pha•

Hire a good bookkeeper first. You stated that you don't know much about that side of things. Work with them each time. Then you can learn from an expert. You will quickly sort out what is worth doing for yourself. And what it it worth having the bookkeeper do for you.

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Susanelyon•

With low overhead it's not profits you need to worry about, it's cashflow. Do not be shy about getting deposits, milestone payments, and following up on invoices. If you do hire a bookkeeper, make sure they have the skills to nicely, but persistently, follow up. Depending on your client base, consider taking credit cards via Square or similar. Smaller businesses have less cash but tend to have owners who love their rewards. Even big companies would sometimes rather pay you $2k with an co. card than open a whole new po. (They never actually pay with the card and your phone but you can type in the number, etc. No monthly fees, no merchant account hassles, but we use it 2-3 times a year.) If no bookkeeper is being hired, consider freshbooks. We don't use it but a lot of our solo vendors do and as a client, I've been impressed. Good luck!

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