Getting contracts and business insurance, researching your competitors, and finding funding sources are some of the steps you should take before starting an IT services business.
With technology now driving most of the modern business landscape, companies in all industries need the right technology infrastructure to stay competitive, reduce risks, and protect data. In order to meet this demand, Team International offices IT service providers like you are highly desired across all industries.
IT budgets are being boosted so that companies can hire these consultants and professionals. Global IT spending is anticipated to grow 6.2% by 2021, according to a recent Gartner report.
By starting a business providing IT services, you can take advantage of this need.
Whatever your field of expertise, there are plenty of tasks to be accomplished. There is also the potential for high earnings. Our guide describes the steps you can follow to build a successful IT services business.
Table of Contents
Choose your IT service offerings
It is important that you keep in mind that your services will be an important selling point for clients. Your IT services may include a combination of the following:
- Designing and installing networks
- Installation and updating of software
- tech support
- Purchasing and budgeting for IT
- Storage and hosting services
- Analyzing the risks
- Strategy for security
- Management of admins remotely
Whenever you decide on your offerings, only choose those you are familiar with. If you think you’ll get more clients by offering services outside your skill set, it can be tempting. On the other hand, taking on IT projects you don’t understand can backfire on you.
Market research and competitor analysis
After you’ve decided what type of IT services to offer, decide what sort of clients you desire to attract. Business size might be a good way to target your customer base. If you are more interested in companies in areas where you have made your name, you might consider them.
The customer base, competition, and expenses in some cities make it more difficult for businesses to grow. Find out which IT companies are in your city.
It’s relatively easy to find out what services they offer, but you may want to dig a little deeper to find out how much they charge. Your local IT services market is likely to have gaps that can be filled through a competitive analysis.
If you are interested in knowing which cities offer the most potential for IT consulting, you can use a list of the seven best cities. In more expensive cities, you can charge higher rates, but you can also charge rates for your services that are lower.
Decide on a business structure
Finding the right business structure is essential when you are starting an IT services company. The ability to get started isn’t as simple as having the necessary experience and finances.
Many small IT service businesses are owned by sole proprietors, partnerships, and limited liability companies. You’ll need more paperwork and will be held personally liable depending upon the structure you choose for your company.
A sole proprietorship, for example, is the simplest business structure for one-person businesses. It requires no state registration. The assets of your business and your personal assets are not separate if your client sues you.
Your state’s process could take several weeks, and it may cost up to $500 to form an LLC. An LLC, however, protects the personal assets of small business owners from lawsuits.
The paperwork and filing procedures for S corporations and partnerships are different. In addition, there are differences in tax structures and limitations. Depending on the current state of the business and future plans, your accountant might be able to suggest what is prudent for you.
Obtain a business license
You might need a business license after deciding on the company structure. The procedure for obtaining a business license varies by state, but it is typically simple.
You will need to provide basic information about your business on your state’s business licensing website, such as:
- Employer Identification Number
- Type of business and name
- Details about the business and its address
- The company’s owner’s name
- If there are employees, their number
It may be necessary to pay a filing and/or processing fee depending on your state. Be sure to find out the validity of your license once your application has been approved. Small business owners in several states are required to apply for their business license every few years.
Plan your business
The purpose of a business plan is to provide a snapshot of your company’s present condition and a road map for its future development. A business plan is not always present when small businesses are starting out. Investors and banks will probably require one, though, if you plan to get funding for your business.
If you are seeking large funding, you’ll probably want to use a traditional business plan format since they are longer and require more time to prepare.
