I just found a great free course on Udemy.com called 21 Critical Lessons for Entrepreneurs given by Jason Nazar, CEO of Docstoc. Jason has a lot of experience in technology entrepreneurship and this course offers over 2 hours of content. I really can’t believe this course is free so check it out!

As technology professionals, we can’t afford to stop learning about new technology. But the same thing applies to us as business owners – we can’t afford to stop learning about business. The problem is that many of us start our businesses without a solid, fundamental understanding about how to run a successful business. Then we focus all our time on taking care of clients or the technology side of our business. Before we know it, we’re overwhelmed. That’s why I started Solo Tech Pros. So make sure to take the time for this course and continue coming back to Solo Tech Pros!

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Wouldn’t it be nice if we could sell our services this easily?

I found a nice article from Chris Guillebeau on his site The Art of Non-Conformity regarding starting a business while working full-time. For those of you who are contemplating starting your own business doing technology work, this is a worthwhile read.

I’m curious how many of you independent technology professionals also work another job? Are you working towards making your business full-time or are you satisfied with keeping your business on the side? How many of you that work your business full-time started off part-time?

I know I started my business on the side, almost by accident. As a technology professional in the mid-to-late 1990′s, there wasn’t much help available for small business or individuals in the home. This was before the days of the Geek Squad or before other tech support companies started popping up. People who found out I did technology work latched on to me to help them with their businesses or home technology. In fact, I coined the term “leech effect” to describe the way desperate people would “leech” on to anybody with a pulse and a hint of tech knowledge. As I did more and more work on the side, I discovered I much preferred helping my clients than working full-time for someone else. My wife and I prepared (albeit not very well) for me to leave full-time work and when the opportunity presented itself, I jumped and haven’t looked back since.

If you are doing tech work on the side, what is holding you back from taking your business full-time? If you now work your business full-time, what finally prompted you to leave employment? For me, it was wanting the flexibility to spend more time with my newborn daughter. I’d love to hear from all of you out there what it was for you.

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Is this what your clients think about you?

Recently as I was ordering a pizza online, I took notice of the fact that the company was charging me for delivery. They took great pains to make it clear that this additional charge was not a tip. I understand the need to charge for delivery. Companies need to cover their cost for the driver. But I also have the expectation that when I order pizza, delivery is part of that. Seriously, how many people pick up pizza anymore? So to me, the fact that I’m being charged “extra” for delivery is a little irritating. I would rather they simply roll any delivery costs into the standard price of the pizza instead of calling out the fact that I’m being nickel-and-dimed for something that should be part of the service anyway.

This got me thinking about how we as independent technology professionals charge our clients. I know some charge for things such as travel time or phone calls. I have absolutely no problem charging clients fairly for services performed. But it doesn’t really matter what I think is right. If the client feels they’re being nickeled-and-dimed, that’s the only opinion that matters. I can tell you that I’ve gained many clients that have complained about their previous technology help charging them for travel time or other “extras” and were happy that I didn’t charge for drive time.

So how can independent technology professionals fairly charge clients for things such as travel or phone calls? I think the key is to starting thinking in terms of value delivered, rather than time involved. Time is not always a fair indicator of value. In fact in many cases it is not at all. I know that I can get a whole lot more done than other technology professionals in a shorter amount of time. You probably feel the same way.

True, in some situations time may be the only reasonable measure of how to bill a client. But let’s look at the example of how shipping companies charge. UPS or FedEx charge more to get something delivered quicker. That’s because faster delivery is more valuable for clients. Wouldn’t it be ridiculous if delivery companies charged based on how long they had the package? Slower delivery would cost more!

Just like shipping companies, it is often far more valuable for our clients if we deliver a solution faster. So should we charge less for work done quicker than expected? Conversely, should we charge our clients more when we take longer than expected if we didn’t estimate the time of a project correctly? I can tell you that I’ve also gained clients who complained about a particular bill from their previous technology help being several hours more than expected.

To prevent the nickel-and-dime perception, what I do is charge a fair hourly rate to cover expenses like drive time and answering quick phone calls. Why don’t I charge for drive time? Because I’m not delivering value to the client by driving. It’s not the client’s fault I live a certain distance away. Why should I charge for the time it takes me to get to them? All that does is make them shop around for another technology expert that is closer to them. To be fair, if the client is very far away I will let the client know that I will need to charge something extra to cover travel expenses. But I don’t charge my normal hourly rate nor do I charge for the entire travel time. Again, I’m simply not delivering value sitting behind a wheel. Which is one reason I’m doing more and more work by remote screen sharing. It lets me help my clients without the whole issue of drive time. More on that later.

I do charge a one-hour minimum for my services. Again, I look at it more from the standpoint of value delivered rather than time involved. If I can resolve a problem or implement a solution for a client in 15 or 30 minutes, isn’t that actually better than if I took a full 60? The client is back up and running and making money sooner. So I look at my one-hour minimum as more of a flat-rate charge for a solution. I rarely get any complaints about this method of charging.

Phone calls are a bit of trickier issue. My rule is that I do not charge for a quick call where I’m answering a simple question or giving a little bit of advice. Charging for phone calls just makes clients not want to call you! My apologies to all my attorney clients out there, but just ask people’s opinions of lawyers that charge by the minute for phone calls! However, if I’m troubleshooting an issue that ends in a resolution of a problem, then I probably will charge. The difference again is in the delivery of value. If I’m on the phone for a few minutes and give the client a little advice, then I chalk that up to good customer relations. But if I help the client solve a problem that was costing them time and/or money, the fact that I was able to do it quickly over the phone is more valuable than if the client had to wait for me to drive there. I also charge for longer phone calls where I’m working with a client on a project plan or something similar. Again, I’m delivering value and pretty much the same value if I had been there in person.

I do charge less for phone and remote work. This is because I can pass along some drive time savings to the client. Passing along savings to clients is always a sure-fire way to keep them happy. It’s a win-win situation because I don’t need to drive and my client saves some money. However, my one-hour minimum also applies for phone or remote work. By doing this, even though I’m charging a discounted hourly rate, it often it works out in my favor because I can resolve many problems in less than an hour. So I’ve had instances where I’ve been able to take care of 2 or 3 clients with remote sessions in less than 2 hours, yet I’m able to bill for 2 or 3 hours of work. So my effective hourly rate is actually higher. This is even before I factor in that I didn’t have any unproductive drive time getting to those clients.

Bottom line, your clients’ perception of the way you charge them is their reality. You may not feel like you’re nickel-and-diming them, but charging extra for things that your clients may feel should be part of your service leads to this perception. Consider how you’re charging your clients and look at it from their perspective. You may find that you’re no better than a pizza delivery company in their view.

I’m curious how all of you out there handle the “extras” when working with your clients. Do you have certain methods in place like I do? Have you ever had a client complain about the way you bill them and how did you handle it?

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I guarantee it’s not “everyone” or “anyone with a computer”. But I bet a lot of you reading this think that is exactly who your target market is. And if you are a specialist in a particular technology, you probably still think your target market is much larger than it should be. Let me fill you in on a little secret: if you try to market to everyone, you’ll resonate with no one. And your business will suffer as you scatter your efforts chasing every potential customer. The most successful technology professionals are those who pick a target market they love and focus all their energy on serving that market. I must thank my lovely wife, who is my business partner and business consultant herself, for introducing me to this concept many years ago.

It’s actually a very simple concept, but an extraordinarily difficult one for small business owners in any field to accept. And it seems that we technology professionals, being stereotypically ego-driven and hard-headed (and not necessarily blessed with people skills), have an especially difficult time coming to grips with this idea. “My skills apply to any business!”, we’ll say. “Everyone has technology and I can help them!”, we believe. The difficulty comes in separating the theory from the practicality. Yes, in theory, every business and every individual is highly dependent on technology and we can probably help every man, woman, and child in our city, state, and country if they’d let us. But the reality is that as independent professionals, we only have so much time and energy. We can’t help a fraction of the people out there even if we worked 24 hours a day. The practicality comes in recognizing there is plenty of business out there and if we focus our efforts on being the best professional in a particular target market, we will thrive.

Yes, this seems counter-intuitive at first. We all want to try to maximize the number of people who know about our services. After all, it would seem that the more people who know about our services the more likely we are to gain business. But know this –  what is truly important is not how many people we market to, it’s how many people IDENTIFY with our marketing message. Most people who are marketed to will quickly forget all about the message. The only people who remember you are those who truly recognize that your service or product will fill a need they have. So why waste your time and money marketing to people who aren’t listening? Focus your efforts on those who really see the value in what you provide. And guess what – when you are highly successful in your target market, people outside your target market will seek you out. You will get more customers of all types by focusing your marketing on one target market.

How do you identify your target market? Let’s ask a few sample questions. Do you prefer to work with businesses or individuals? But even more specifically, what types of businesses or individuals do you like working with? Myself as an example, I enjoy working with creative professionals, as well as lawyers and doctors. The reality is I could probably make a living serving only one of those target markets. But I enjoy the diversity, so I focus more on how the business thinks of technology. I enjoy working with professionals who want to leverage their technology to maximize their profits. I don’t really want to work with businesses who see their technology as a cost-center or a necessary evil. I’ll let other technology professionals handle that work. Because finding your target market is not all about the money. It’s about being happy in your work as well. If you can fill your time only with clients that value your work and the work is highly satisfying to you, you’ll be wealthy with both money and happiness.

If you’re a specialist, such as a database admin, you may think that’s a target market already. And it is, but I bet you could get more specific and as a result, be more successful and happy. For example, what size company do you prefer working with? Some of us prefer smaller companies. Others prefer working with large corporations. The way you market to those two markets is quite different. Where would you rather spend your time and money? Perhaps you prefer working with the software of a particular industry. Make yourself known as THE go-to guy or gal for that particular software. Many consultants have been successful offering themselves as a third-party, independent authority on a particular software or industry.

The definition of a target market can be almost anything you would like it to be. You just need to figure out what that is and how your services fill their particular needs. Your goal should be to make it almost TOO specific, because for most people, they make their target market too general at first. Just keep in mind that your target market should be one that you truly enjoy working with and usually things will take care of themselves from there.

Do you work with a highly-focused target market? Would you prefer to work with a particular type of client but don’t know how to target to them? Share your target markets (or preferred target market) with us here and let’s see if we can help!

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I just stumbled upon a good article from Mashable discussing the different types of Limited Liability Company structures that are available to small businesses. The IRS web site has a good overview of the different types of business structures available and their tax implications.

When I first started doing in-home and small business work on the side, I didn’t do anything regarding business structure. I just put the money I earned into my personal bank account … and claimed the earnings on my personal tax return, of course! In other words, my business was structured as a Sole Proprietorship. Later, when I decided to run my business full-time, I was advised to create a Subchapter S Corporation, or S-Corp, which has worked well for my consulting business with no employees other than my wife and I. Several years later, I learned about the option of forming an LLC and was curious. It seems that LLCs could provide some advantages, however, in the state of Illinois, they are (were?) more expensive to form than in other states, so it made little sense for me to change my business structure. However, for independent technology professionals looking to start up a company, it is definitely worth looking into structuring your company as an LLC. Every state has different laws and regulations regarding forming an LLC, so consult with your attorney (and possibly your accountant) before making a decision in this regards. You do have an attorney and an accountant, right? If not, stop what you’re doing and start researching reputable attorneys and accountants right now!

What type of business structure does your company have? If you’re getting ready to start a company, what type of business structure are you considering and why?

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