Comment My $.02 after taking the leap... (Score 1) 382
I recently founded a services company (rivertechnologies net) - here's my $.02 based on my personal experiences, in no particular order. As a point of reference my BG is in distributed systems development, integration, security, proj. mgmt, etc.
Pick your target market carefully. Don't limit yourself to any one vertical, but don't use rand() to pick a company out of the yellow pages either! Our clients are primarily in banking, which works well for us, because (a) we know the business from the IT POV, (b) banks are always going to be in business as a pillar of the economy and (c) non IT companies are always looking to outsource non-core, revenue-generating activities, e.g. systems integration & development. The catch is to make sure that the services you can provide are ones that aren't 'disposable'...a lot of trends come and go, but the CIO will always have 20 things on their to-do list that they HAVE to get done. Prove to them that you can get it done, do it a few times, and now you have a valuable service.
Develop a business plan. Go to inc.com and read up on their material. Find 5 people who did what you want to do and were successful, and talk to them. Then talk to 5 others who weren't. Consider how you plan on funding yourself. Bootstrapping a firm puts things in perspective - if it doesn't make us $, and it costs $, and we don't need it, then we don't do it. No Aeron chairs and 21" TFTs here, at least for now ;)
Consider your competitors. You are essentially looking to start what I would refer to as a commodity service - S/W eng, security services, systems integration, etc. is a highly saturated market. Everyone can find 10 decent 1099'ers who can do that, and there are slews of companies who do it very well, and are HUGE. The catch here is to develop your core offering(s) to appeal to your target market because there is something about you that makes you 'different'. I don't mean in a BS kind of way either...there has to be something about you and your s/w firm that will compel someone to say, "I don't want to send this job to India, because these guys: know my business/have expertise here/add value in some other way, etc."
How hard are you willing to work? Did you say 80h a week? OK good! If you are not willing to give 110%, then I wouldn't do it. If you have a wife/kids, or other commitments, talk it over with them first. Being successful at work doesn't mean much if your kids forget what you look like!
Consider your sales cycle. How long does it take to generate revenue based on your business model? How much $$$ runway do you have? Consider how long it will take you to get the business up & running before you can actually start selling yourselves.
Learn to think like the anti-Christ (a sales-person). Unless you are going to hire a sales manager you can trust, you will have to be well-versed in the sales cycle, and how to effectively sell your services in the timeframe that you have to work with. I would recommend two excellent books here:
"The New Strategic Selling" by Heiman & Sanchez, and "Selling to VITO" by Anthony Parinello. (the 2nd book is great but clearly the guy is an egotistical dickhead who thinks techies are peons who get in his way.) If you don't have the stomach to sell to people, then you aren't going to do very well, unless you can convince 100 people to bang down your door asking for your svcs.
When you get all caught up in the non propeller-head activities in running an IT firm, you have to make sure you can stay current with industry trends, what is going on with your target market, and so forth. It is a catch-22 at times, as skills alone won't make your business grow, but if you can't deliver, than you surely won't grow.
Make sure you have 100% faith in your partners. Make sure they can contribute as much as you can; if they can't make sure the partnership is arranged accordingly. Have some philosophical discussions, and make sure that you guys are on the same page. Does he want to grow into a $10M company, and you will be happy with $100K a year and the company car? This can lead to some sticky issues if you are not both on the same page.
So far this has been undoubtedly the most gratifying professional thing I have done, and even if we closed shop up tomorrow, I feel as though it has enabled me to grow unlike any other gig I have done before.
Pick your target market carefully. Don't limit yourself to any one vertical, but don't use rand() to pick a company out of the yellow pages either! Our clients are primarily in banking, which works well for us, because (a) we know the business from the IT POV, (b) banks are always going to be in business as a pillar of the economy and (c) non IT companies are always looking to outsource non-core, revenue-generating activities, e.g. systems integration & development. The catch is to make sure that the services you can provide are ones that aren't 'disposable'...a lot of trends come and go, but the CIO will always have 20 things on their to-do list that they HAVE to get done. Prove to them that you can get it done, do it a few times, and now you have a valuable service.
Develop a business plan. Go to inc.com and read up on their material. Find 5 people who did what you want to do and were successful, and talk to them. Then talk to 5 others who weren't. Consider how you plan on funding yourself. Bootstrapping a firm puts things in perspective - if it doesn't make us $, and it costs $, and we don't need it, then we don't do it. No Aeron chairs and 21" TFTs here, at least for now
Consider your competitors. You are essentially looking to start what I would refer to as a commodity service - S/W eng, security services, systems integration, etc. is a highly saturated market. Everyone can find 10 decent 1099'ers who can do that, and there are slews of companies who do it very well, and are HUGE. The catch here is to develop your core offering(s) to appeal to your target market because there is something about you that makes you 'different'. I don't mean in a BS kind of way either...there has to be something about you and your s/w firm that will compel someone to say, "I don't want to send this job to India, because these guys: know my business/have expertise here/add value in some other way, etc."
How hard are you willing to work? Did you say 80h a week? OK good! If you are not willing to give 110%, then I wouldn't do it. If you have a wife/kids, or other commitments, talk it over with them first. Being successful at work doesn't mean much if your kids forget what you look like!
Consider your sales cycle. How long does it take to generate revenue based on your business model? How much $$$ runway do you have? Consider how long it will take you to get the business up & running before you can actually start selling yourselves.
Learn to think like the anti-Christ (a sales-person). Unless you are going to hire a sales manager you can trust, you will have to be well-versed in the sales cycle, and how to effectively sell your services in the timeframe that you have to work with. I would recommend two excellent books here:
"The New Strategic Selling" by Heiman & Sanchez, and "Selling to VITO" by Anthony Parinello. (the 2nd book is great but clearly the guy is an egotistical dickhead who thinks techies are peons who get in his way.) If you don't have the stomach to sell to people, then you aren't going to do very well, unless you can convince 100 people to bang down your door asking for your svcs.
When you get all caught up in the non propeller-head activities in running an IT firm, you have to make sure you can stay current with industry trends, what is going on with your target market, and so forth. It is a catch-22 at times, as skills alone won't make your business grow, but if you can't deliver, than you surely won't grow.
Make sure you have 100% faith in your partners. Make sure they can contribute as much as you can; if they can't make sure the partnership is arranged accordingly. Have some philosophical discussions, and make sure that you guys are on the same page. Does he want to grow into a $10M company, and you will be happy with $100K a year and the company car? This can lead to some sticky issues if you are not both on the same page.
So far this has been undoubtedly the most gratifying professional thing I have done, and even if we closed shop up tomorrow, I feel as though it has enabled me to grow unlike any other gig I have done before.
