Welcome to the Computer Consultant's Advisor!
Here you'll find a few articles that will help you in starting, operating and maintaining a consulting business, with a particular slant toward Computer Consulting. I hope this helps you and your business!
One of the most difficult questions I have been asked over the years is “what do you do?” As a consultant, there are so many options to you that it is often difficult to narrow the possibilities down to just a few responsibilities.
As a computer consultant, you will one day have to decide what you do and what you do not do. Some consultants concentrate on service and support, others on pre-purchase consulting and installation, and still others try to do everything their clients need. It has been my finding that there will be some things you are very good at, and others that, over the years, you will find you either do not do well, or really dislike. You should choose those items that you enjoy, and that you are very good at performing.
What’s in a name?
First, though, let’s look at the name: Computer Consultant. The name obviously suggests that we allow others to consult with us regarding computers. The fact that they even want to consult with us suggests that we know something they don’t know. So, that means that first of all, a Computer Consultant is knowledgeable in the field of computers. You must know more than your clients, and keep up to date, or you will be of little value to them.
Depending on what specific field you are in, and type of consulting you do, you may have to have any of a variety of different skills and/or training in order to do your job. Some consultants may have to become certified by a major software company or computer company. You may just need to rely on years of experience. But in some way, you will have to be trained and knowledgeable in order to do your job.
When we finally decided to figure out “what we did,” we went over a list of all the things we had done, and from that list, took note of those services that we either really enjoyed, were very profitable, or we were really good at performing. By doing this, we eventually categorized each item into one of several categories and then chose four of those categories to sort of specialize in. That doesn’t mean that we will never to any of the other items, but we wanted and needed to figure out what we enjoyed, were good at, and could profit from.
In our case, our four areas are: General Consulting, Custom Programming, Internet Services, and Data Backup services. These are by no means all the services you could offer. Some of the things we omitted that you may be very good at may include: Building computers, providing on-site or off-site repairs, running cable for networks, or any of a number of other services you may provide.
Do that thing you do so well!
Whatever you decide to offer your clients, be sure to be the best at it. When a client calls you for help, you need to be able to say with confidence that you can solve their problem. They need to hear from you that you are one of the best in the field and that you have the abilities they need. It’s that kind of confidence that will allow them to call you again, and again.
On the other hand, when a client asks you to help with something that you either do not like, or cannot do, you need to be honest. If you don’t like it, you can “force” yourself to do it and keep the client happy, But if you really can’t do the job, never pretend that you can. The result is always bad. The best you can hope for is a little luck. But the most likely thing to happen is that you will either botch something or at the very least, you’ll end up spending hour upon hour working on the problem only to find that you either can’t help them, or you have over charged them. Doing this will only hurt your reputation and possibly cost you a client.
A really good Computer Consultant will know when to tell their clients to bring in another person to do a job for them. This will only cause your clients to trust you even more. If you have the confidence and wisdom to do what is right for the client, even if it costs you money, then they know you really care about their solution, and not just the money they pay you. Besides, when you do this, you are then in control of the situation. You make the recommendation and maybe even schedule the other service for them in order to make sure you can “oversee’ the job. Who knows? Maybe your client will pay you to over see the job, or you can sub-contract the work and make a little bit on the job as well.
The Definition
Now that we’ve discussed the topic a bit, we can start to get an understanding of just what a Computer Consultant does. A consultant makes himself/herself available to their clients to provide assistance when needed, in their specific areas of expertise, in an effort to provide services that offer value to the client beyond the price that the consultant charges.
OK, with a definition in hand, we can now begin to take it apart to figure out the what we need to know.
Availability
First of all, a consultant “makes himself/herself available.” That means that as a Computer Consultant, you need to be available to your clients. This means current and future clients if you plan to grow your business. How do you do this? Well, to start with, answer the phone when they call. When a client calls you for something important, the last thing they want to hear is your voice mail message. Make sure you have a cell phone, and if no one is in the office, have your office phone forward to your cell phone. Many consultants have only a cell phone and give that number out freely. If you have to rely on voice mail, perhaps when you are already on the phone, be quick about returning those calls so that the client never feels put off. Your response time, or lack of it, can make or break a client relationship.
Secondly, availability means that you can be found. If a client needs assistance, they will look for it. Where? By asking others, by looking in the yellow pages, by searching Google™, by watching television, by reading the paper, by opening their mail, or by reading a billboard. Now, which is the best way for you to be available? Good question. I wish there was a simple answer. The more complex answer is: you will have to find a combination of things that promote your business and get your name and number in front of your clients and potential clients. At the very least, someone in the Computer Consulting business should have a good, informative, and confidence-building website. That’s a given. After that, Buinsess cards, a yellow page listing or ad, and other things will follow as necessities. The final combination will be something you will have to tweak for years, possibly.
However you decide to be available, you can see that it is a necessity. If you are not available, clients will not do business with you. It’s that simple.
Provide Assistance
Let’s say you were available and your client or potential client has called you. You will then hold a responsibility to provide assistance to them in their time of need. This also means that you must be able to provide that assistance. If they need help, and have called you, then they expect you to be of assistance, not come over and scratch your head, or say “Hmmmmm” a lot. What your client needs and wants is someone to confidently approach their problem and solve it for them in a timely manner. If you cannot do this, you need to be honest and let them know and even recommend someone else if necessary. That way you can let them know you are looking out for their best interests and ask them to call you first the next time they need help. This kind of confidence really looks good to a client.
Offer Value
As I have stated before, you are only valuable to your client if your services are of greater value than the amount of money they have to pay you. If you can give a client service that is worth $110.00 and charge him $95.00, then that means the client can feel good about your charges. It should be your goal to always be able to leave the client feeling that they got the best part of the deal. When you provide quality services, at reasonable rates, this is easy to do. We have a saying in our Consulting firm, that what we do is “make people happy.” I think this is because when we do our job right, for a reasonable rate, the client is always happy when we leave. Their problem was solved, and they don’t feel like we’ve taken them to the cleaners. There is more on this in the article on “setting your rates.”
But wait, there’s more!
Of course, in a short article, there’s no way to describe what every Computer Consultant does, or has responsibility to do. Each company has their own identity and I’m guessing that no two are alike. But I would also suggest that if you can master the concepts listed above, you will be near the top of the list when it comes to being a valuable asset to your clients. There are, of course, some characteristics that I believe are necessary to be successful in this business. Among them: honesty, integrity, dependability, promptness, being responsive, being polite, knowing your limits, etc. You could almost list the characteristics of a Scout, or other such thing, and you’d have a pretty good list to work from.
I would encourage you to be a real person, who really cares about their clients and their problems, who tries to really understand the big picture, and who always tries to leave things better than they found them. Someone like that is always in demand. It’s nice to be in demand.
How much should I charge for my services?
This is probably the most difficult to answer question any consultant has to ask. And it never ends. Each time you price a job, or make a quote, you have to ask yourself "How much should I charge?"
Hourly rates.
As a consultant, your prices must be a combination of your value to your client, a rate that is reasonable in the marketplace, and an amount that allows you to stay in business. If you imagine a chart where each of these three is a corner of a triangle, your price for your services must fall somewhere inside the triangle. The closer to the center you can get, the more likely you’ll be successful. If you charge too much more than the client feels you are worth, they will not do business with you. If you charge more than the market, you may also price yourself out of the market. Too low and people will not view your services as valuable. And if you don’t make enough per hour to meet your goals for sales and profits, you cannot stay in business. No single one of these indicators can be used alone, all three must be considered each time you price your services.
So considering the above, how much DO you charge for an hour of your time? Computer consultants get anywhere from $15 to over $150 per hour for their services. How do you pick a price that will work for you? Well a good place to start is to do a survey of other service providers to see what the market pricing is. Call a few computer retailers and ask their rates for service, both onsite and offsite. Check with the local “nerd squad” and see what they charge for on-site services. Chart these out in a spreadsheet to see what the high, low and averages are for different kinds of work. With this chart, you can start a range of prices that you may be able to charge.
Next, you must consider what your client is willing to pay for a particular service. This is based on many factors: Can they perform the service for themselves if they want to? What would it cost them to do it in-house? What have they paid for this service in the past? What would other companies charge them to do it? You may or may not be able to find out all these answers, but any of them will help you determine how to maximize your pricing without going too high. Remember, unless the service is worth more to the client than what they pay you, there is no reason for them to offer you the business. Don’t ever forget that.
Finally, if you plan to operate a business, you owe it to yourself to make a profit. You must make a certain amount of money on average, to keep your doors open, to pay your bills, and to remain successful so you will be available to your clients for the next time they need you. This is not an excuse to gouge your clients, but you certainly need to consider your costs.
If you feel you’ll be able to bill out 20-25 hours per week, then you have to make your total weekly salary during that time. The rest of the week is spent in business building, records keeping, training, and research. Those hours are rarely directly billable and must be included in the hours you bill. So if you have a maximum of 25 hours to bill, and need to gross $500 for the week, then you’ll need to charge an average of $20 per hour. If you need to make $1000 per week, then you’ll need to average $40 per hour.
This is also a good way to figure out what it will take to make a certain level of income. If you want your company to gross $100,000 in a year, then you divide that by 50 weeks (figuring 2 weeks off), then by the number of hours you feel you’ll be able to bill in a week. If we use the 25 hours from the previous example, then $100K ÷ 50 weeks = $2,000 per week. $2,000 ÷ 25 hours = $80.00 per hour. Is $80/hour reasonable? Is it within the scope of the triangle above? If not, you need to either bill more hours or accept a lower income level for your business.
Start Small
Most consultants start at a very reasonable rate to get their clients to work with them. A modest rate and a good reference or two should get you in the door of most reasonable clients. There is no actual dollar amount for this starting place, but think it through: $10-$15 per hour is an hourly wage for a skilled laborer. It is a reasonable rate for someone working for someone else. However, as a business owner, you have to charge not only for your time, but for the overhead your business needs to be viable. So you’ll have to charge more than that. Some consultants start off working for friends for $20-$30 per hour. You may take on some new clients for $25-$40 per hour. As you get more experienced, and have more clients to use as references the price gradually goes up. Eventually, you will come to the point that you have all the work you can get done in a week and will have to raise your prices to justify taking on any new customers.
Keep adjusting when necessary.
You may have to adjust pricing for years to get it just right. You may also have a different price for different kinds of service. For instance, an hour spent cleaning viruses may not be worth as much as installing a server. It’s ok to have more than one rate, depending on the service and the amount of knowledge required to perform the task. You may have rates from $35 to $100 or more.
Geography matters.
So you weren’t all that good with maps in school. But you do understand that pricing for everything varies by geographic location. Network consulting may be $150-$200 per hour in a large metropolitan area, but in a small town with one traffic light, you may not be able to find anyone willing to pay more than $40 an hour for the same work. Be sensitive to the area in which you live and don’t over price yourself for the market that way either.
Give it time.
It does get a little easier over time. In our firm, we have one consultant who works full time for one client. We bill the same for him every hour of every week. Another consultant has been with us a little over a year and we bill a minimum of $50.00 per hour for him. Sometimes, we’ll bill him out at $75 or $100 depending on the job. But we’ve been doing this for nearly 10 years now. Your time will come.
What about contracts?
Service contracts are a completely different way of billing. We’ll cover them in another article, but suffice it to say that when a client is willing to commit to a number of hours, they both want and deserve a lower price than your top pricing. This can be a short-term contract for a particular job, a service contract for a year’s work, or just a programming job. Each has its own reasons for pricing it a certain way, but in the end, they all need to be a better deal for the client than not having a contract. Otherwise, why sign one?
Your pricing is specific to you. Don’t ever be confused thinking you can charge as much as any one else charges, just because you want to. You must be worth your rates in order to be successful. Do your homework before you price your services.
How can I start a computer consulting company?
So, everyone asks you how to fix their computer and you are ready to start making money off of the advice you give out so often. Maybe starting a consulting company is the way to go, maybe not. But there are a few things you can do to help prepare for owning your own business.
Can you afford to go into business?
Sliding into a consulting business can be done on a shoestring budget, but if you plan to quit your day job and start a consulting firm, you’d better be prepared to spend some money and make it without much income for a while. If you quit your current job, you effectively turn off your money-making machine while you’re trying to start up another. This can take weeks to months to years, depending on how good you are, how large your client base is, and what size job you average when you work. You may be able to stop one job and start up your business in one week. But if you did, you would be way above the average, so don’t count on that just yet.
The best advice:
When would-be consultants contact me with a question like this, my response is almost always the same: “Start part time, then look for a cornerstone client that can fund a large percentage of your needed income. Only then can you begin to consider going full time.” If you start in your spare time, build a few clients then find one that can use you a lot on a regular basis, consider asking them if they could use you two or three days a week for a while. If so, you can often make 50% to 60% of your needed income from a single client while you build your business.
Let’s look at an example. Say your making $40,000 per year in your current job. That’s about $770 per week. If you quit your job, you would then have to work 40 hours per week at nearly $20.00 per hour to make that much money. However, consultants rarely bill 40 hours per week. 20 hours is more likely, and a startup consultant may not be able to bill more than 10 or 15 hours each week. Worst case, 10 hours, means you’d have to charge $77.00 per hour. Now that price is not so high, but as a startup, you may not be able to get that rate. So, you’d probably be fortunate to bill 15 hours at $40, or $650 per week. Not too shabby, and close to what you were making, but that’s also nearly $500 LESS per month. Unless you’re single and have very little overhead, that just won’t do.
However, if you have a client that you’ve been working with, who is willing to give you a contract for 10 hours or more per week, then you’d be guaranteed to make that 10 hours and another 10 may be enough to make ends meet. Say you get the contract for 10 hours at $45 per hour. That’s $450. Then the other 10 hours could average around $35.00. Total for all 20 hours: $800.00. That’s MORE than you were making before. But don’t break out the champagne just yet, you now have to pay more taxes than you did before! :)
Seriously, having this client producing a steady stream of income will give you the stability you need to start the business as you build it. This security of income is the single most important component of building a successful consulting business.
Work very closely with this client, always do what is best for them, never give them a reason to look for someone else. Learn what you need to support them, and be willing to suggest they hire others to do things you can’t do for them. Even oversee the work. It shows them that you want their success more than you want their money. That builds a long-term relationship that will mean income for years to come. You should really do this with ALL your clients.