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6 Biggest Mistakes IT Consultants Make in Their First Year

6 Biggest Mistakes IT Consultants Make in Their First Year

Tuesday, September 12, 2017/Categories: it-consulting

Starting a business is full of firsts: your first client, first dollar, and first mistake. Unfortunately, no matter how well-crafted your business plan is, there will come a time that you just plain screw up. But don't be too hard on yourself. You won't be the only IT consultant to stumble during their first year in business.

Starting an IT consulting business can be challenging. To help you steer clear of some potential blunders, we asked business owners who've already gone down this road to share some of their early mistakes, as well as a few tips on what you can do differently.

1. Working for Free

"One of the biggest mistakes I made was giving away too much for free. I designed websites for free and tried to give them to local businesses that were overdue for an update. I expected they [the business owners] would be so grateful and it would lead to referrals. Instead, I spent hours going into the businesses, calling, and emailing – with no success. Now I only accept about five percent of the people that inquire with us and my prices are medium-to-high. I think my greater error in the beginning was being ignorant of WHO I should've been marketing to." – Lexi Montgomery, CEO of digital agency (@miamidarling)

2. Growing Too Big, Too Fast

"One thing we learned the hard way our first year…is trying to scale too fast. Many people think early on that being busy or having an influx of work means they need to expand right away. Taking on a lot of overhead before you have steady revenue could be a very big mistake. A slowdown can hit at any point during your first few years and you need to plan for this." – Mark Tuchscherer, president of web development company

3. Hiring Staff Too Quickly

"I remember starting my business as a solo practitioner who believed building an internal team was the only way to grow your business. I soon learned the importance of partnerships and genuine connections. I began to form strategic alliances with other business owners who complimented my services and were experts at their craft. If you are a beginner entrepreneur, do not be afraid of alliances and partnerships. For me, it meant reducing my expense of having to pay wages to an entire internal team of web developers, graphic designers, writers, etc." – Vicky Llerena, CEO of digital marketing company (@SocialVibes)

(Related reading: "4 Steps to Hiring IT Contractors / Freelancers Who Make Your Life Easier")

4. Offering Too Many Services

"The biggest mistake I made during our first few years in business was trying to be all things to all people and running after every opportunity. In the early days, you want to grow your business and cultivate a thriving customer base which results in going into any potential customer opportunity with a 'can do' attitude, even if what the customer really needs isn't directly in line with what makes you special as a company. It is critical to decide who you are as a company, what your sweet spot client looks like, and the issues / problems they have that you are going to be the best at solving. My tip [is to] stay laser focused on what you do best and who values your unique capabilities, and ignore any shiny objects!" – Eric Hobbs, CEO of managed IT services provider (@techassociateNC)

5. Not Using Contracts

"One mistake that I've committed myself and have seen others get caught in also is being too informal or too casual in documenting projects with clients. Everyone wants to be liked and be known as the guy that's easy to work with, but protecting yourself also has to be a top priority or you will get burned. Clients have to be presented with statements of work when proposing to perform a project for them, and they have to sign off on that agreement… Some new consultants are reluctant to present too much paper at the beginning of a negotiation for fear of turning off a potential client. Handshake agreements seem like a great relationship builder, but very frequently it will wind up doing the opposite." – Jeff Hoffman, president and founder of managed IT services provider

(Related reading: "5 Things to Know about Your IT Consulting Contract")

6. Making Decisions Based Out of Fear

"I think our society teaches us that we live in a world of scarcity. Too often, we have to really work hard to remember that we live in a world of abundance. Focusing on scarcity amplifies fear. 'Will my business make enough money? Will the clients come in? Can I risk hiring these employees?' These are all valid questions that business owners often have running through their minds. However, sometimes the fear behind these doubts can get in the way of what you could accomplish if you just put them aside and shoot for the moon." – Tim Hamilton, CEO, (@PraxentSoftware)

For more tips from business owners who've been there, done that, check out "Steal these 15 Daily Habits of Successful Business Owners."

About the Contributors

 

Tim Hamilton is founder and CEO of Praxent, a leading custom software and web development firm based in Austin, Texas. Tim is passionate about fostering entrepreneurship and innovation in the community. His vision for innovation comes alive through Praxent every day as the company partners with leaders to uncover the dormant potential within their organizations and empower them to achieve that potential through technology.

 

 

Eric Hobbs started as a network administrator for a professional liability insurance carrier in 1991, and was later promoted to IT manager. In 1997, Eric started Technology Associates with the mission to provide "big company IT" to businesses that didn't have an IT staff. Over the years, Eric has worked with businesses large and small to help leverage technology for a competitive advantage.

 

 

Jeff Hoffman is president of ACT Network Solutions, which he founded 29 years ago. He is the author of three books, including "Intruders at the Gate: A Guide For Protecting Your Network From Hackers" and is a frequent guest speaker on business IT security issues.

 

 

Vicky Llerena is the CEO of Social Vibes Media, a digital marketing agency focused on helping small businesses increase their online visibility and brand presence. She brings with her over ten years of experience having worked at Univision WXTV-41 and PRNewswire. Vicky was recently named a Top 25 Brand Builder by Leading Women Entrepreneur, and has been featured in NJBiz, Huffington Post, CEO Blog Nation, and many more media outlets.

 

Lexi Montgomery's career in tech started as a hobby web designer and blogger. Her blog, The Imaginary Chef, led to a few opportunities as a Hollywood actress, but her love for web design remained strong. She is now the founder of Darling Web Design, located on Miami Beach. Darling serves an international clientele and is branded provocatively, like a high-end escort service.

 

Mark Tuchscherer is the cofounder and president of Geeks Chicago, a web design and development firm based in Chicago. Mark has more than 16 years of experience in the digital space, working with clients of all sizes in many different verticals.

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