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Startup_Help's avatar

Should I quit corporate job to start business?

Asked by Startup_Help (13points) February 6th, 2013

I am a recent graduate who has been working in IT for several years. I enjoy supporting systems, deploying new infrastructure, and can troubleshoot a wide variety of IT problems with a wide variety of technology. I am coming up on my year anniversary at my big corp sysadmin job and would like to leave after this. I would like to move to my hometown, a large city. I am waiting a year so I don’t look like a “job hopper” in the event my plan fails.

I am thinking of not finding a job in my hometown first (it’s impossible to interview with a 9–5 anyway) and starting my own Managed Services\Consulting firm. I’ve had this idea for a while. Why IT services?

*I have a passion for this line of work.
*SMBs (small-medium business) need these type of services. In a large city there are a ton of SMBs.
*Startup costs are very minimal. I do not need a storefront or thousands of dollars in inventory. I have tools and hardware. Clients would be paying for their own systems & upgrades which I order on demand. I have budgeted a few thousand to start up just in case.
*I spoke with sysadmin friends who trolled managed services companies and got quotes. I would have no issue competing with their very high prices.

I am very frugal and am not one who cares for flashy things. I have no debt, no obligations, no car payments, and $25k saved. Assuming I get ZERO work I could theoretically live for at least 1.5 years.

One thing I’m scared of is getting clients. I have no contacts that are SMB owners. I am a great seller and am confident in my marketing plan however nothing is 100%. Since I work a 9–5 I have no time to test my marketing plan. I couldn’t realistically meet my obligations working those hours and most SMBs I would sell to are closed after 5 or their higher ups are gone for the day.

My plan is to just cold visit every SMB (offices, shops, doctors, lawyers, etc.) and just pitch my services to the owner. I will do what it takes (within reason) to win the client. I will beat their current MSP’s price if applicable, ask to inspect their systems to point out issues (non redundancy, no backups, lax security), offer trial periods or a free repair, and if they are not looking for Managed IT leave my card for on-demand break & fix support.

If I am in need of cash I could always take a contract job. I never did contract through a staffing firm but I hear the jobs are not hard to get. IT seems to be a field where I do not have to worry about never ever finding a job again if this fails. Not sure how I would explain my employment gap though.

Should I go for it? Any advice.

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8 Answers

CWOTUS's avatar

What does your business plan look like, aside from the narrative you’ve given above?

What do you expect your major expense categories / items to be?

When could you start generating income? Do you have any clients lined up? How will you price your services? (That last is one of the hardest questions for any startup service business to answer.)

I’m not suggesting that you publish your plan here, but you need to have one.

HolographicUniverse's avatar

I like the plan, sounds like a potential market
I’m not too familiar with IT so I can only speak from a general standpoint
What I would advise, since you are giving yourself a reasonable time before you depart, is in your free time you test the waters in order to get a feel of how successful you can be. I would start off developing a firm business plan, one that is less of an idea and more of a startup, then cold call a few SMBs and pitching to them first to learn if they are interested. You don’t want to leave your job, lose money and move cross country on potential and ambition alone, you want to into account many more angles, than posted here, to see if it’s worth the dedication.

I have no doubt that this type of business is/will be in demand but can it thrive in your ideal location? Will it be more profitable than all expenses involved? Does it have potential for longevity? Will you earn more doing this than at your current firm?
Many people have went into business just retailing and have been happy thus selling something useful can be prosperous, I just think you should ask yourself these questions, if you haven’t already, before committing to such a life changing decision

Startup_Help's avatar

Thanks for the tips guys. I most likely plan on moving weather or not I decide to go through with this for personal reasons as well.

@HolographicUniverse & @CWOTUS – You both identified my main problem, the marketing\testing side. Unfortunately I can not visit these places since I work a 9–5 in a different city. I can’t even test in my city due to my hours. Perhaps I can call as you suggested but it seems less effective than in person. It ill be hard to get in touch with the people I need to talk to. It’s a downward spiral…. I work so I can’t start up but if I start up I can’t work…

Ideally I would take a month off to test this my company will most likely not let me.

@CWOTUS – I do not have clients lined up for the reason mentioned above. This is IT, my main cost is time. Until I get clients I have no need for employees. I can do the work myself at first. Incorporating, gas, business cards, and occasional legal help for contracts are my main costs. I do my own web design & have access to free hosting. I already have a few testing\lab boxes laying around. My car and phone are things I need anyway, business or not. Every other cost (Hardware) is priced into the service and is only incurred when I get paid. For example if you need a server I spec it, price it & order it custom on demand. I will most likely require money for hardware up front. If I did get stiffed on an order I can always return the hardware. I do not need to stock 20 servers in a room somewhere.

Any suggestions about holding out on incorporating until I get my first client? It is the most cost effective but looks unprofessional if I have to tell the owner to make the check to cash because I do not have my business name yet. Most businesses dont like to do this for tax reasons either.

HolographicUniverse's avatar

Well you mentioned taking time off when you first moved thus you will have plenty of time to market there (as a last resort)
When I briefly sold software to restaurant owners I began cold calling then we set up a meeting time for testing, it’s basically what you’ll do door to door but without on the spot demonstrations (This will be useful with gathering potential clients) As far as your hours,I agree they can be difficult to work around, may I suggest after hours advertisement? Shooting emails directly through their website then, on lunch, call to follow up
Also incorporating is the only hassle, only to me, considering you’re establishing a business rather than independently working I suppose you’ve already taken into account incorporation

P.s. As a side note I noticed you said you do Web design and IT work, I may need your assistance with my website when we’re done sorting this out

CWOTUS's avatar

I would never want to discourage you from starting your own business. Quite the contrary; I encourage it of anyone who has the inclination to try it. But don’t do it on wishes and false hopes. Your current ideas are not going to work. But the business should work, so here are some suggestions (just what occurs to me off the top of my head; I’m sure there are plenty of other ways to go about this).

I think that your idea to do cold calls on businesses and asking to review their security is a non-starter. Unless the business owners know you personally, or have someone that they trust completely to vouch for you strongly, you won’t get past the receptionist. For that reason I think that cold-calling businesses in this way won’t get much traction in any way. (How many of these business owners do you know personally, and who can give you that glowing recommendation that “this person can be trusted” and “this person is fully competent to deliver value”? Not many, I’m guessing. You’ll have to develop those people.

How do vendors of those services sell to your present company? Examine some methods that work and emulate them to the extent that you can.

One thing that you can do—something anyone can do, as a matter of fact (from any location, and at almost any time, which means that you could start doing this tonight, from your own home), is reviewing the “web presence” of the various clients you’d like to call on. Make note of web addresses, check links for accuracy and currency, check the wording and design of the websites themselves, and look for obvious security holes. In other words, do the proofreading that many of them don’t do.

That’s where I’d suggest you start your business, in your own off time nights and weekends (while holding your current job), and soliciting those companies with specific and immediate corrections and suggestions, whether or not you “sell” them right away. Work on polishing your introduction, your bona fides and ability to deliver completed work that surpasses expectations.

Keep a log of the time that it takes you to do the work that you start out to do this way, so that you’ll have a database that you can use to estimate future work when you do plan to sell your time and talents.

Once you’ve been doing this for awhile you’ll have a better head for how to make your approaches, what your time should be worth, how difficult it will be to solicit clients… and you should have started to make some valuable contacts who can serve as future references.

Now get to work, and good luck!

And welcome to Fluther, by the way.

PS: I also wouldn’t recommend that you limit yourself to “just small companies”. By all means target them, but look for a couple of corporate clients with websites that don’t appeal to you. One person can make a big difference in some awful presentations, and it would be nice to have a corporate client that could give you a steady income, even if you choose not to be an employee of the company. (You might also consider part-time employment, and then limiting your corporate hours as your self-employment takes over.)

marinelife's avatar

It sounds like you have thought about a great deal and you have excellent back-up resources (savings; ability to take contract jobs).

Develop (hire a marketing consultant) a brochure about your services and leave it after you cold call places.

Go for it!

wundayatta's avatar

You should develop a web presence, too. It lends your company an aura of legitimacy. You can describe your services. You can have references. Describe yourself. That sort of thing that people can look up on their own time.

Also describe your philosophy.

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