5 Things to Consider When Starting Your Own IT Consulting Business

So you’re making the leap from employee to entrepreneur. As you marshal your skills to begin a new life as an IT consultant, keep in mind some basic advice from small business experts:

Get a lawyer and accountant

This is first because it’s important. You don’t want to build up a successful business only to discover later that you were violating some law or section of the tax code the whole time. It’s true that small businesses are usually exempt from the strict reporting requirements, hiring rules, and other regulations that large, public companies have to follow, but you need to be aware of national, state, and even municipal laws. Your attorney and accountant don’t need to be employees; just establish a relationship and consult them when drafting agreements and dealing with your financials. If nothing else, they’re the first two contacts in your professional network.

Set aside cash

Even established consultancies have lulls in business. Make sure you have a few months’ worth of living expenses in a liquid bank account at all times. In addition, those times might be just when you need to pump more money into your advertising. Also make sure to account for dry spells when calculating the rates you’ll be charging.


Whether it’s a book, articles in trade journals or just blog entries on your own Web site, there’s no better advertisement than your name on valuable information. If a company CIO is searching for solutions to his offsite storage management problem and comes across an article with your bio at the bottom, you can bet he’ll make a note of your consulting business. The Guerrilla Consultant offers some excellent advice on what to write about.

Know your strengths

Maybe you’re a programmer without much knack for networks. Maybe you design killer backend databases but your user interfaces are ugly. Your strengths are your specialties, and the kinds of jobs you should be going after. That’s not to say you should necessarily refuse jobs that don’t fit neatly into your skill set; it just means you might have to brush up or bring on a subcontractor for part of a job. Steve Friedl even recommends charging less (or nothing) for time spent on non-specialties and noting that on the final invoice – you can’t make customers pay for your education, but a couple “no charge” lines on the bill can earn you good will and word of mouth. When nothing matches, up, though, it doesn’t hurt to throw work to other consultants with completely different skills; they’ll probably return the favor.

Put everything in writing

Karl Wiegers just wrote a compelling argument for writing down everything, from casual notes to formal contracts. In fact, pretty much every experienced consultant — as well as our lawyer friend from the first section — will agree that there’s no better tool to protect against forgetfulness and misunderstanding than the written word. After you speak with customers, a follow-up e-mail listing each party’s responsibilities lets them know that you’re fully engaged and committed to getting their project done.

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