Feel the Heat

If the thought of building out a network or setting up e-mail services gets you excited, then we've got an opportunity for you. According to recent reports by AMI-Partners, about one-quarter of small and midsize businesses are increasing their spending on outsourced IT. "There is room for startups that are focused and have a really clear value proposition for customers," says Laurie McCabe, vice president for SMB insights and business solutions at AMI-Partners. "Whether it is consulting or software support or network management, there's definitely a need."

Larry Velez, 33, founder of managed solutions provider Sinu in New York City, knows firsthand what it's like to cater to growing businesses and nonprofits. Velez takes what he calls a holistic approach: Instead of obsessing over what hardware it sells or hourly support rates, Sinu charges a flat rate per person and focuses on the needs of the workers in an organization and what can be done to keep the tech running smoothly. With 2007 sales of about $5 million, Sinu has outgrown its office space twice in the past year. Looking ahead, Velez says, "We're going to really see the mainstreaming of this approach to outsourced IT."

You don't need a consultant to learn from these tips on starting your own tech consulting business:

• Set yourself apart. Sinu, for example, caters to small businesses and nonprofits with its unlimited tech support and flat-rate fee model, which gives his company a lot of incentive to keep its clients' tech shipshape.
  
• Do your research. You can't be all things to all people, so choose your target market before you launch. Says McCabe, "Research what customer segment you're going to sell to in terms of the kinds of needs they have relative to the kinds of services you're going to provide."
  
• Don't underestimate your costs. "Don't kid yourself about your costs, and make sure that every role in your company has a competitive salary and benefits behind it," advises Velez. There is still competition to attract and retain talented IT workers, so budget accordingly to bring in the best personnel you can get.
  
• Talk to your customers. You don't have to guess about what your potential customers are looking for in a tech consultant. Just ask them. Says McCabe, "Have some of these conversations so that when you package up your services and put them out there, you're going to hit the right notes." Find out what they like or don't like about their current provider and ask what services are the most important to them.
  
• Price carefully. Proper pricing is especially important if you cater to small and midsize businesses or to nonprofits. "You have to come up with a pricing strategy that is really going to dovetail with these businesses because the SMB market is a cost-constrained market," says McCabe. Sinu's flat-rate approach is a great example of how this can be done.

Tech Consulting Franchises:
CM IT Solutions
cmitsolutions.com

Computer Troubleshooters
comptroub.com

Concerto Networks Inc.
concertonetworks.com

Fast-teks On-site Computer Services
fastteks.com

Friendly Computers
friendlycomputers.com

1 800 905 GEEK
1800905geek.com/franchise

Rescuecom
rescuecom.com

TeamLogic IT
teamlogicit.com

The Utility Company
theutilitycompany.com

WSI Internet
wsimarketing.com

This article was originally published in the March 2008 print edition of Entrepreneur's StartUps with the headline: Feel the Heat.