When your IT side hustle starts taking off, starting a small ITaaS (IT as a Service) business can be the next natural step. If you have the technical know-how, energy, and a few steady customers, you’re already off to a great start. But the road to running a thriving small business is paved with challenges.
Here are the steps you should take to start your business off on the right foot — including some common pitfalls you should avoid.
Step 1: Draft a business plan
Business plans can range from simple to in-depth, and you don’t need a business background to create a solid plan.
Define your services. Develop a solid idea of what you’re prepared to offer, along with what you won’t or can’t do. This scope depends on your own knowledge, education, and preferences. For example, if you’re a highly certified security specialist, you likely won’t be offering services to remove malware from home users’ PCs.
Market research. Do some market research and analysis. Who are your target customers? One of the awesome things about starting an ITaaS business is that you have a large potential customer base. You could potentially serve any organization or individual who would outsource IT needs — which leaves you with an enormous market. This is a benefit, but can also be overwhelming. If you don’t know where to start, consider starting local. Find small businesses that need tech support.
Find your competitors. If you’re already in IT, then you might know the big names out there. You may even contract with them. Ignore them. Find three to five small competitors, and research them. Find out what they do, and how much they cost. Importantly, find out what they don’t do. This will help you position yourself in the marketplace on price and services.
There are many more intricacies to consider in the beginning stages of your new business, like budgeting and managing your cash flow, setting up a legal framework, drawing up contracts, and so on. Creating a business plan is a great place to start. It will give you a solid base from which to work.
And don’t forget to enjoy yourself during the planning stage. After all, there are a lot of great perks to starting your own IT business. You’re well on your way!
Step 2: Gather Your Resources
Now it’s time to start thinking about concrete resources, like hardware and employees.
If you’re funding your business out of your own pockets, you must make some thoughtful choices about where and when to invest your money. Even if you’ve secured outside funding, this is an important time to be cautious. Keep in mind that many of your clients will request Net-30 or even Net-60 terms, which means you might not get paid for 30 to 60 days after you get started on projects. This is common practice.
Once your funding strategy is in order, consider the hardware, software, and personnel you may need to execute your projects. Hiring 1099 contractors is a great way to fill in the gaps of your own capabilities and offer a full-service model. Be sure to have a plan to vet them, and be ready to share details about how you will use their work.
Throughout this resource-gathering stage, keep an eye toward how much you’re willing to scale. Is your ultimate goal to grow into a large company, or do you just want to sustain yourself until retirement? Once you’ve figured out your scalability goals, it will dictate a lot of the plans you make.
Step 3: Grow Your Brand
You’ve got the plans, now it’s time to promote your brand!
Many businesses begin their growth by taking on small or known clients at first, then growing by referral. You may choose to contact family, friends, or professional connections to pitch your services. Remember that many future clients will come from referrals, so gaining projects and delivering good quality work for these early clients is important.
As you build your initial client base, dedicate time to marketing and promotion. You’ll need a website or at least some sort of online presence — will you build it yourself or outsource to a freelancer? What about social media and other forms of advertising? Even with a small budget, you can test different forms of paid advertising on Facebook, LinkedIn, or Google — wherever your customers are, which you discovered in Step 1. Don’t discount local radio and newspaper ads either, especially while you’re starting up.
Online promotion is crucial for an IT business, and it can be boosted even more by marketing yourself through in-person events. Search around for opportunities; anything from free Meetup socials to networking events through your local chamber of commerce could yield new connections.
You’re on the verge of an exciting path. Starting your own ITaaS business isn’t easy, but being your own boss and growing something from the ground up can be rewarding. As you get started, follow these three steps to build a solid foundation. And have fun!