small business computer consulting - Remember don't get too exci

Starting a small business computer consulting firm requires a realistic approach to staffing, client acquisition, and pricing. You might wonder what level of technical and sales talent you can afford to put on your payroll, especially when first launching. Being realistic about your budget and target market is crucial for sustainable growth and success.

What Staff Can Your Small Business Computer Consulting Firm Afford?

As a new consulting firm, a primary concern is the caliber of technical staff you can hire. While the specific salary ranges vary significantly by job market, consider if your budget allows you to attract someone with the diverse intermediate to high-end technical skills needed for larger small business clients. Attempting to hire highly skilled professionals with a very limited salary budget can be challenging.

Why Qualified Help is Essential

Small business clients, particularly those with 10 to 50 PCs, will likely have increasingly sophisticated needs. You generally cannot send someone who is merely a "screwdriver technician" to handle these complex requirements. Such an approach often proves ineffective. Your small business computer consulting firm needs fairly high-level personnel to adequately serve these clients.

Understanding Your Sales Staffing Needs

Similarly, on the demand generation side, consider what kind of polished B2B salesperson you can attract if you can only offer a modest base salary. Remember that additional funds will be needed for sales and marketing activities, such as direct mail, attending networking events, sponsoring events, and conducting seminars. These investments are vital for generating leads and growing your client base.

The Reality of Staffing a New Consulting Firm

Recruiting staff with competitive skills on a very tight budget can often feel like a pipe dream for many new small business computer consulting firms. In most ideal scenarios, it's unlikely to happen initially. As the owner, you are typically the individual, perhaps alongside a spouse or family member, who will be willing to work tirelessly at below-market wages to build the business from the ground up.

Why Target Larger Small Businesses?

If you're transitioning from a B2C (Business to Consumer) service model to B2B (Business to Business), you might assume that securing small business clients will be straightforward. However, it's often more complex than it appears. Focusing too heavily on home-based businesses and micro-small businesses (those with under 5-10 employees) can make it difficult to sell a broad range of services. While technically small businesses, these micro-enterprises may not be the best fit for your computer consulting company for several reasons:

• **Reliance on Consumer-Grade PCs:** They often use less robust, consumer-grade hardware.
• **Prevalence of Pirated Software:** You may encounter a higher incidence of unlicensed software.
• **Reluctance to Pay for Professional Services:** Many micro-businesses prefer to seek free help from volunteers, friends, or family members. It's challenging to compete against "free." You'll also struggle against "moonlighters"—individuals who have full-time jobs elsewhere and can undercut your pricing because they don't have to cover their own certifications or benefits.
• **Lower Perceived Importance of IT:** IT may not be seen as critical to their operations, leading to less demand for quick response times or proactive support.
• **Limited Budget for Infrastructure:** They are often too small to afford a dedicated server or a robust network infrastructure.

These factors explain why many successful computer consulting firms prioritize prospect companies with at least eight to ten PCs. At this size, businesses typically find it unsustainable to continue with peer-to-peer setups or rely on the often slow response times of volunteers and part-timers.

When is a Small Business Client 'Big Enough'?

Small businesses with more than 8-10 PCs often begin to take their IT infrastructure more seriously. They start considering implementing a client-server network, a robust backup solution, an uninterruptible power supply (UPS), and a reliable firewall. To correctly implement these systems, decision-makers in these businesses usually recognize the need for a more sophisticated IT services or network integrator firm.

As a small business experiences growth spurts, the stakes for their IT systems increase. These businesses generally acknowledge the necessity of using IT more strategically and understand that IT is crucial to their company's operations. They cannot afford significant downtime and require someone to coordinate all computer-related aspects. These clients seek a partner to take ownership of their IT challenges, which is precisely where your small business computer consulting firm can step in.

How Does Pricing Affect Your Business?

In small business computer consulting, a rate of $100 an hour can be both reasonable and sustainable. Let's explore why this rate can make a significant difference. If you bill at $100 an hour and achieve a 75% utilization rate (meaning 75% of a typical 40-hour work week is billable time, roughly 1,500 hours a year), your gross annual revenue would be $150,000.

Salary and Affordability with a $100/Hour Rate

Theoretically, as a small business computer consulting firm, you could allocate one-third of your gross revenue ($50,000) to sales and marketing. This allows you to afford a competitive base salary, such as $40,000, for a sales account executive, with the remaining $10,000 going towards related marketing expenses. Another third ($50,000) would cover taxes, insurance, and general overhead. This leaves the final third, or $50,000, to pay a technical staff salary.

Can You Afford Top Talent at Higher Rates?

You might also consider billing above $100 an hour for your small business computer consulting firm. While there might be a perceived "hourly billing rate ceiling," if your clients are willing to pay $110 to $125 an hour, it becomes even easier