I want to start my own IT business - much advice needed!

[WalderX]

Hi all,

So, for a couple of years now I have been considering starting my own business in IT support & sales. Whilst I enjoy working at my current company (Computer support engineer), I am only on 16k which is very low for the type of job I do and there are no prospects for moving up (small 5-man company, my boss is the owner and we haven't hired anyone new in 5 years). I also feel this job has now hit the wall in terms of what I can learn from it. There are very few IT jobs in the town I live in so not much competition in terms of salaries and I haven't had any luck finding another job in my hometown.

Yes I could find a job in Brighton (30 miles away) or London (70 miles away) but commuting really doesn't appeal to me and I just know I could make a business work if I put the hard graft into it.

The current company I work for is a small 5 man company and over the past 5 years working here I now have a pretty good understanding of how small businesses function and I get involved in pretty much every aspect of the day-to-day running; initial new client meetings, taking requirements, quoting, sourcing & purchasing, negotiating pricing with suppliers, delivering & installing to the client, ongoing maintenance through remote support, phone calls and site visits, dealing with complaints, raising invoice requests and generating invoices if required. I also manage the helpdesk system here, delegating jobs out to relevant staff members.

I have a basic understanding of business finances such as how VAT is applied and claimed back, corporation tax, employee national insurance etc. would have course need the help of an accountant in this area though.

If I were to go into business I think it would have to include both business clients and regular 'residential' customers. For me to even get any business clients I guess the first step would be to choose a name & register it as a company with companies house and then get VAT registered? Without being VAT registered I cannot even begin to sell to businesses.

My fixed monthly outgoings are only about £600 (including mortgage, car, all house bills & insurances, mobile phone, credit cards). The rest is for food, drink and living I don't have any kids (yet!). I could also start this business whilst working at my current job (setup the company, website, do some marketing etc).

So anyone out there done similar? I know I can find many helpful resources on google etc but really wanted to start a thread on it so I can get the direct advice from the thousands of knowledgeable people on this forum

 

[Narj]

I could also start this business whilst working at my current job (setup the company, website, do some marketing etc).

You might want to check your employment contract as I'm betting that conflict of interests would be a big no-no!

 

[Atlas23]

What exactly would you be doing? I.e. software/hardware repairs, remote support?

I've partaken in some small-time (cash in hand) repair work for a couple of years for friends/family/others (from word of mouth). I would love to be able to start up my own company but I just don't have the start-up capital required, as I'd imagine I probably wouldn't take home much of a wage for a number of months (and that's assuming it doesn't fail) so would need money to live off.

As for business clients, do you have any connections or would you have to essentially 'cold call' your way in? One of the biggest things I've found with PC repairs/support is your reputation and getting some word of mouth advertising out there (among private clients anyway), as many people will just go to PC World (or another larger scale business) and pay extortionate amounts, because they are well established.

You sound like you know what you're talking about though in regards to the business aspects, and I wish you the best of luck

 

[Paul11]

You dont have to register for VAT straight away and you can still work with businesses

dont forget if you are not VAT registered, you dont charge VAT in the first place so there is nothing for the business to reclaim.

 

[Caged]

Don't even bother trying to get residential customers, leave them to people like PC World. If you think small businesses are tight then you don't want to try to deal with someone upset that you spent 3 hours on an 8 year old Dell.

You need to build up relationships with preferred suppliers and get trade pricing. Even if (for example) a Dell desktop isn't the best option for every client it will make it a lot easier for you if you only resell Dell.

I'd be careful targeting small businesses as they really don't like to spend on IT most of the time, and are being told that the cloud solves all their problems. For the most part that is true, but you need to ensure you only push cloud services that you can resell, which gives you an administrative overview of all your accounts.

 

[Energize]

Without being VAT registered I cannot even begin to sell to businesses.

That is completely incorrect. Neither I nor the software development company that I do a lot of work for is VAT registered and we are B2B.

 

[WalderX]

You might want to check your employment contract as I'm betting that conflict of interests would be a big no-no!

Hehe, well yes technically it is a big no-no and it does state in my contract that I am not allowed, but I wont tell if you don't I'm not saying I could work here and run another business! Would be impossible, but I could setup some of it and test the water to see if I could get some clients to start me off.

What exactly would you be doing? I.e. software/hardware repairs, remote support?

I've partaken in some small-time (cash in hand) repair work for a couple of years for friends/family/others (from word of mouth). I would love to be able to start up my own company but I just don't have the start-up capital required, as I'd imagine I probably wouldn't take home much of a wage for a number of months (and that's assuming it doesn't fail) so would need money to live off.

I agree - this is the first scary part, generating enough in the first few months to survive... I would need a couple of business clients making regular payments for support/emails/hosting etc to be able to get off the ground. I also do a fair bit of cash in hand work for friends and those who have been recommended to me so I could expand this with lots of advertising (leaflets through doors and social media are pretty cheap to do).

Most of our clients at work primarily deal with me and often only want to speak with me so if I left a few of the smaller clients may well be happy to move over to me, and I could undercut the monthly costs they pay to my current employer pretty easily...

As for business clients, do you have any connections or would you have to essentially 'cold call' your way in? One of the biggest things I've found with PC repairs/support is your reputation and getting some word of mouth advertising out there (among private clients anyway), as many people will just go to PC World (or another larger scale business) and pay extortionate amounts, because they are well established.

I have a lot of connections and as I said, most clients call asking to speak to me as they seem to feel I deal with things better than other staff members and I get on with many of them very well, they would certainly not be happy to see me leave the company. I have already copied up my Outlook mailbox and address book for future ref

So I think for anyone to take me seriously I need to start with registering a company at companies house. I hear this is fairly cheap but I might need to speak to an accountant to help with this, or if someone else out there has done this is it relatively easy to do by yourself?

 

[Flukester]

What exactly would you be doing? I.e. software/hardware repairs, remote support?

I've partaken in some small-time (cash in hand) repair work for a couple of years for friends/family/others (from word of mouth). I would love to be able to start up my own company but I just don't have the start-up capital required, as I'd imagine I probably wouldn't take home much of a wage for a number of months (and that's assuming it doesn't fail) so would need money to live off.

As for business clients, do you have any connections or would you have to essentially 'cold call' your way in? One of the biggest things I've found with PC repairs/support is your reputation and getting some word of mouth advertising out there (among private clients anyway), as many people will just go to PC World (or another larger scale business) and pay extortionate amounts, because they are well established.

You sound like you know what you're talking about though in regards to the business aspects, and I wish you the best of luck

Can you explain how you are giving business advice and yet in same post are working cash in hand... You know that's illegal right ?. I know you say it's small, but That doesn't make it ok

Starting a computer repair business would require pretty much no capital at all, especially if you start small and grow slowly

 

[Energize]

So I think for anyone to take me seriously I need to start with registering a company at companies house. I hear this is fairly cheap but I might need to speak to an accountant to help with this, or if someone else out there has done this is it relatively easy to do by yourself?

You can do it by yourself.

Can you explain how you are giving business advice and yet in same post are working cash in hand... You know that's illegal right ?

Every self employed person does it, it's impractical to keep track of and declare every tiny bit of cash from odd jobs. I don't see what that has to do with someones business knowledge?

 

[Paul11]

Don't even bother trying to get residential customers, leave them to people like PC World.
.

I disagree, this is a huge market and PC world charges a fortune , people are happy to pay if you can offer a good service.

 

[WalderX]

That is completely incorrect. Neither I nor the software development company that I do a lot of work for is VAT registered and we are B2B.

Yes I understand that you can sell to businesses without being VAT registered. When selling bespoke in-house software solutions I guess this is ok as you are not buying and reselling from another supplier? If I wanted to buy and sell computers and laptops I would need to be able to claim the VAT back in order to be competitive, and business clients expect to be invoiced VAT separately so that they can claim it back too.

 

[Caged]

I disagree, this is a huge market and PC world charges a fortune , people are happy to pay if you can offer a good service.

It really isn't. People who can't use computers buy tablets.

People who can't use computers and are too tight to buy tablets hang onto their Windows XP desktops forever. It's not a market you're going to make enough money in to cover the hassle.

If you really want to do residential work then try and attach yourself to the high end AV installers as someone who can do the computer networks for them.

 

[Atlas23]

Most of our clients at work primarily deal with me and often only want to speak with me so if I left a few of the smaller clients may well be happy to move over to me, and I could undercut the monthly costs they pay to my current employer pretty easily...

I have a lot of connections and as I said, most clients call asking to speak to me as they seem to feel I deal with things better than other staff members and I get on with many of them very well, they would certainly not be happy to see me leave the company. I have already copied up my Outlook mailbox and address book for future ref

Sounds like a good start then!

Can you explain how you are giving business advice and yet in same post are working cash in hand... You know that's illegal right ?. I know you say it's small, but That doesn't make it ok

When I say small, I mean £20/30 every few weeks (if that). I have a full time job as a developer, I don't operate as a proper business. I just get one of my family/friends ring me and say "my friend has x problem with their PC, could you have a look when you get a chance". From there, I've become the 'go to' guy for a number of people.

If I was earning lots of money from it, then yes I would consider declaring my earnings and starting a business. But I don't.

 

[WalderX]

Starting a computer repair business would require pretty much no capital at all, especially if you start small and grow slowly

I think so too - I am not planning on renting a shop front so the only really expenditure to begin with would be on advertising (could leaflet local businesses and residential areas, backed up with facebook profile and perhaps a cheap ad in local newspapers)

You need to build up relationships with preferred suppliers and get trade pricing. Even if (for example) a Dell desktop isn't the best option for every client it will make it a lot easier for you if you only resell Dell.

I'd be careful targeting small businesses as they really don't like to spend on IT most of the time, and are being told that the cloud solves all their problems. For the most part that is true, but you need to ensure you only push cloud services that you can resell, which gives you an administrative overview of all your accounts.

We currently have trade accounts with OCUK, Ingram Micro, Bluepoint and a few others. I have all the contact details of our account managers but to be able to reapply for trade accounts in my name I would need to register a company and be VAT registered (which is why I think this is the first step for me?)

You can do it by yourself.

Every self employed person does it, it's impractical to keep track of and declare every tiny bit of cash from odd jobs. I don't see what that has to do with someones business knowledge?

OK I will look into doing this myself. I guess this is the place to start https://www.gov.uk/business

 

[Caged]

You don't need to be VAT registered, but if you are going to be reselling equipment then you probably should be otherwise you're at a huge disadvantage.

 

[D.P.]

You might want to check your employment contract as I'm betting that conflict of interests would be a big no-no!

yep, this is the first thing to do. You need to ask permission form your employer first, or quit your job as it is pretty much a given they wont let you just go straight out and set up your own business. First of all you will need to seek separation of responsibilities, IP and customers.

 

[tom_e]

You say you have a non competition clause in your contract, but it doesn't matter as you'll just try and fly under the radar and then you turn round and say you'll happily poach customers off your old company.
Do you really think they'll take that lying down and allow you to steal their business from under them?

 

[Flukester]

Sounds like a good start then!



When I say small, I mean £20/30 every few weeks (if that). I have a full time job as a developer, I don't operate as a proper business. I just get one of my family/friends ring me and say "my friend has x problem with their PC, could you have a look when you get a chance". From there, I've become the 'go to' guy for a number of people.

If I was earning lots of money from it, then yes I would consider declaring my earnings and starting a business. But I don't.

I disagree totally. If you are the go to guy for a number of people you are a business. The level where you are a proper business is not a turnover for you to decide, you either charge for services or you don't. Wether they give you money for your trouble or you charge a set fee, it's business.

If what you say was correct I won't tell HMRC I'm a business till I turnover 50k

 

[Flukester]

You can do it by yourself.



Every self employed person does it, it's impractical to keep track of and declare every tiny bit of cash from odd jobs. I don't see what that has to do with someones business knowledge?

No it's not impractical, it's called tax fraud... Being self employed you can track and account for every bit of cash to the penny very easily

Just because lots of people do it doesn't make it ok

 

[Janesy B]

Have you not overlooked one vital thing? You are not willing to commute yet most of your client base will be in larger towns?