How did you become a consultant or business owner

EssendonEssendon Posts: 4,548Registered Members ■■■■■■■■■■
I know this has been discussed in the past in a few threads but I felt I had to post a few questions that I have been thinking about. I'll put this in point format for increased readability.

1. For someone still thinking of consulting, is it better to consult for a company for start something of your own. Working for someone would assure you atleast some income and would let you learn the ropes before you venture out on your own. What are your thoughts on this?

2. How did you guys get your first customer and how hard was it? Did you have to rely on a contact to help get you your first contract or did you get a call in response to an advert you put on the yellowpages or something?

3. When did you know that you knew enough to go face a situation all by yourself? Now I know a fair bit about Exchange/AD but am no guru at it, say your very first client rings you up and says their forwarder has suddenly stopped working or a mailbox store doesn’t mount, you wouldn’t be able to give the client the "warm fuzzy feeling" when you get there if you didn’t know what you should be looking for. So when do you know that know enough.

4. Did you have to have a sales guy do the pitch for you first and you went and closed the sale or did you have to do it all yourself too. I am not that good at convincing people and am working on my public speaking skills (joining a local Toastmaster’s soon), is this going to be substantially harder without well developed communication skills.

5. I believe it is very important to have concisely written literature on what services your company offers. Would you guys have printed copies or just rely on the material you post on your website.

6. Number 5 raises another question, how about a company name. You don’t want any whacky names such as Monkeyboy Technologies or Pink Mutt Inc., how did you go about choosing a name.

7. What obstacles did you come up against and what was your course of action. How did you identify that a market need exists which hasn’t been filled yet? I have been reading Million Dollar Consulting written by Alan Weiss, a book that eMeS recommended in one of his extraordinarily and very informative long post on the same subject once. The book rightly says you need to be able to identify a market need, the skills to fulfil those needs and the desire to do so. Would you guys recommend that I should start learning what the market needs or should I hone my skills in my area of interest.

A big TIA.
NSX, NSX, more NSX..

Blog >> http://virtual10.com

Comments

  • dynamikdynamik Posts: 12,314Banned
    Have you read the similar thread I made: http://www.techexams.net/forums/jobs-degrees/32249-how-did-you-come-business-owner-consultant.html

    You bring up a lot more questions, but that's worth a review if you haven't seen it.

    I would assume you've seen that since you clearly stole the thread title ;)
  • EssendonEssendon Posts: 4,548Registered Members ■■■■■■■■■■
    I have actually read your thread a few times, it's bookmarked among a few others. And I did steal the title, couldnt think of anything better!
    NSX, NSX, more NSX..

    Blog >> http://virtual10.com
  • Mojo_666Mojo_666 Posts: 438Registered Members
    You could just become an independent contractor, I have my own company (it's just me) I get to pay myself every Friday...which is immense.
    I don't get any benefits or perks, no holidays, no sick pay, no nothing, but I wouldn't have it any other way, because I don't get office politics I don't get bored, i dont get let down or looked over and I always know I can move on. not to mention that contractor rates are so much higher (due to the fact that you have to provide your own benefits etc)
    :)

    Also if decide to look for clients etc I have the time to fit them in and a company already formed.
  • EssendonEssendon Posts: 4,548Registered Members ■■■■■■■■■■
    Folks, I'll bump this up and add another question. Say if you are facing a situation where you have tried everything you know, googled and all, what do you tell the customer? I mean how would you word it, considering there are SLA's around the services you provide and the service credits you get hit with when an SLA is not met.

    Thank you once again.
    NSX, NSX, more NSX..

    Blog >> http://virtual10.com
  • eMeSeMeS Posts: 1,875Registered Members
    Essendon wrote: »
    1. For someone still thinking of consulting, is it better to consult for a company for start something of your own. Working for someone would assure you atleast some income and would let you learn the ropes before you venture out on your own. What are your thoughts on this?

    I never consulted for a consulting company, so I truly don't know. For me it wouldn't have been the right thing. The more people you have involved in something the further you're removed from the original source of revenue. Get as close to the source as possible. Over time your business should be moving closer to the source of revenue.
    Essendon wrote: »
    2. How did you guys get your first customer and how hard was it? Did you have to rely on a contact to help get you your first contract or did you get a call in response to an advert you put on the yellowpages or something?

    My first customer was the company I left. It wasn't hard.
    Essendon wrote: »
    3. When did you know that you knew enough to go face a situation all by yourself? So when do you know that know enough.

    You know enough now. There is no problem so impossible or hard out there that it can't be solved.
    Essendon wrote: »
    4. Did you have to have a sales guy do the pitch for you first and you went and closed the sale or did you have to do it all yourself too. I am not that good at convincing people and am working on my public speaking skills (joining a local Toastmaster’s soon), is this going to be substantially harder without well developed communication skills.

    If you are going to go into business for yourself you will quickly find that very little matters other than your ability to initiate and close sales. When I first started doing this some time ago I thought it would be credentials and experience that would differentiate me from the rest. I'm almost always still amazed when credentials and experience are either irrelevant or treated as an afterthought, which is more often than not.

    Two things determine your success. First, literally how many doors you knock on/calls you make, and second, how many of those knocked on doors/calls turn into customers that are willing to pay you to do something.

    It really is a matter of how many at-bats you take, and how many hits you get when you're at bat. Even someone who hits 1 in 1000 balls can succeed, if he's willing to swing at tens of thousands of balls. *

    I'm good at sales. In fact, I'd prefer to focus on that and nothing else. I'm not there yet, but if we get just a little bit bigger sales will be my only job.

    As far as whether or not you get a sales guy right off the bat, well, that all depends. Sales people are motivated by knowing how they're going to make their next Lexus payment, and usually one person can't provide enough income to keep them interested. At first you'll likely have to do both the selling and the working. When you get more people on board you can sustain a dedicated sales staff.
    Essendon wrote: »
    5. I believe it is very important to have concisely written literature on what services your company offers. Would you guys have printed copies or just rely on the material you post on your website.

    In my experience I would say that your belief here is wrong. Most people read as little as they can get away with. It's as if books are made of kryptonite. For the first several years my business didn't really have a working web site, and now it's functional but not anything earth-shattering.

    Cash flow is king. Anything that you do, especially at the beginning that is not related to making cash flow into your business is a mistake. Fancy websites, literature and all of that take you away from the actual work of making sales. Another way to say this is that passive sales techniques like websites and literature rarely close sales for you.

    What we did was have a couple of really nice 1 and multi-page brochures made professionally, but not much else. These are only available if someone wants them, which is rare. I think this is because most sales come from either connections that are familiar with our work, or the sale is the result of past successful work.

    Seriously, most of your business will come from connections and prior success at delivering results for someone.

    Save the money that you would spend on the fancy literature and website to smooth out those times when you need cash flow. Unless of course you're offering some kind of web-ish business, then I guess you need to eat your own dog food.

    The best thing that you can do here is to come up with a strong "elevator-speech" that describes your business, what you do, and how you provide value. Elevator speeches are very very brief, but give the customer everything they need to know to buy from you.
    Essendon wrote: »
    6. Number 5 raises another question, how about a company name. You don’t want any whacky names such as Monkeyboy Technologies or Pink Mutt Inc., how did you go about choosing a name.

    I agree completely with you here. I see a lot of dumb company names out there, and I think it hurts the people that choose them. The other thing that I see that I think is really bad is naming the company after yourself. Seriously, some people in this business and their egos are really out of control.

    I thought for a long time about the name. I wanted something that captured what we did. I would avoid specific technologies, etc.. in your name, as those things will die over time and you'll be stuck with whatever it is.

    I not-so-secretly wish ITIL would die so that all of the companies out there with "ITIL" and "ITSM" in their name would have to go out of business.
    Essendon wrote: »
    7. What obstacles did you come up against and what was your course of action. How did you identify that a market need exists which hasn’t been filled yet? I have been reading Million Dollar Consulting written by Alan Weiss, a book that eMeS recommended in one of his extraordinarily and very informative long post on the same subject once. The book rightly says you need to be able to identify a market need, the skills to fulfil those needs and the desire to do so. Would you guys recommend that I should start learning what the market needs or should I hone my skills in my area of interest.

    I don't exactly know how to explain how I do this, but I've been reasonably successful at it thus far. As Weiss says, no matter what the technical specifics of your business are, you're really in the business of achieving results. What I take from that is that focusing on results differentiates me from most everyone else, and defines the market need that I serve. It does. BTW, Weiss appears at times to be one of those arrogant f*ck's, but at least he didn't name his company after himself.

    Probably the two biggest obstacles that I can think of that I deal with almost every day are 1) other people's greed, and 2) other people's inability to control scope.

    MS
  • eMeSeMeS Posts: 1,875Registered Members
    Essendon wrote: »
    Folks, I'll bump this up and add another question. Say if you are facing a situation where you have tried everything you know, googled and all, what do you tell the customer? I mean how would you word it, considering there are SLA's around the services you provide and the service credits you get hit with when an SLA is not met.

    I deal with such nebulous stuff sometimes that this doesn't happen. Even when I've done direct technology implementations and work in that area, this really hasn't been an issue.

    Basically I would say that you should under-promise and over-deliver.

    MS
  • eMeSeMeS Posts: 1,875Registered Members
    Mojo_666 wrote: »
    You could just become an independent contractor, I have my own company (it's just me) I get to pay myself every Friday...which is immense.
    I don't get any benefits or perks, no holidays, no sick pay, no nothing, but I wouldn't have it any other way, because I don't get office politics I don't get bored, i dont get let down or looked over and I always know I can move on. not to mention that contractor rates are so much higher (due to the fact that you have to provide your own benefits etc)
    :)

    Also if decide to look for clients etc I have the time to fit them in and a company already formed.

    I think a good point is made here about politics. What I like about what I do is that I get to pretend to be naive about politics in the organizations that I work with. I see it, but I get to pretend that I don't, which is liberating, considering that I spent the majority of my direct employee career in a highly politically charged environment.

    MS
  • EssendonEssendon Posts: 4,548Registered Members ■■■■■■■■■■
    Seriously, eMeS, I was hoping this thread would catch your attention. Thank you for the great post and to you too, mojo_666.

    Hope other business owners on here (I can think of keatron, garv___) can spare a few minutes and provide some valuable insight into this.
    NSX, NSX, more NSX..

    Blog >> http://virtual10.com
  • eMeSeMeS Posts: 1,875Registered Members
    Essendon wrote: »
    Seriously, eMeS, I was hoping this thread would catch your attention. Thank you for the great post and to you too, mojo_666.

    Happy to help. I wanted to give it a couple of days to age to see what kind of responses you'd get. That and I was seriously busy all week.

    Seriously though, the toughest decision you will make is the decision to set out on your own.

    MS
  • eMeSeMeS Posts: 1,875Registered Members
    Something that I probably should have added here, IMO, what's more important than all of the questions that you've asked is having an adequate financial plan in place to support your decision.

    Weird and expensive expenses have a way of cropping up at the most inopportune times. Additionally, you will also be out of pocket quite a bit for travel expenses; sometimes it takes a while to get reimbursed.

    MS
  • it_consultantit_consultant Posts: 1,903Registered Members
    I work for a consulting company; having done this both independent and W-2 I would say independent has serious challenges for the average IT guy. Consider how you would handle accounts receivable, what happens when clients don't pay or argue the bill with you.

    If I were you I would put my feet to the fire with a consulting company first, you get outstanding experience on a variety of technologies which people who don't consult never get exposed too. Then when you are an outstanding rock star engineer on MS, Cisco, HP (Networking Equipment), Watchguard, Postini, All forms of anti-virus, all versions of outlook, all versions of windows server, AD, Exchange 2003-2010, SANs (iSCSI and Fiber Channel), etc you can go independent and bill yourself out at $300 an hour...because your worth it.
  • gbadmangbadman Posts: 71Registered Members ■■□□□□□□□□
    Then when you are an outstanding rock star engineer on MS, Cisco, HP (Networking Equipment), Watchguard, Postini, All forms of anti-virus, all versions of outlook, all versions of windows server, AD, Exchange 2003-2010, SANs (iSCSI and Fiber Channel), etc you can go independent and bill yourself out at $300 an hour...because your worth it.

    Steady!
    [FONT=georgia, bookman old style, palatino linotype, book antiqua, palatino, trebuchet ms, helvetica, garamond, sans-serif, arial, verdana, avante garde, century gothic, comic sans ms, times, times new roman, serif]A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties

    -[/FONT][FONT=georgia, bookman old style, palatino linotype, book antiqua, palatino, trebuchet ms, helvetica, garamond, sans-serif, arial, verdana, avante garde, century gothic, comic sans ms, times, times new roman, serif]Harry Truman[/FONT]
  • NetAdmin2436NetAdmin2436 Posts: 1,076Registered Members
    Hey Essendon!
    Glad to hear that you're thinking of starting your own gig.

    I'm still pretty new at this whole running your own business thing and am learning everyday. I started my company back in September 2009 just as a sole proprietorship and have recently incorporated. I only have a handful of clients so far, but it works out pretty good and I'm making more than I ever have in my life. I am also much happier with my career than I was a year ago. Here's my 2 cents...
    Essendon wrote: »
    1. For someone still thinking of consulting, is it better to consult for a company for start something of your own. Working for someone would assure you atleast some income and would let you learn the ropes before you venture out on your own. What are your thoughts on this?

    I think it can work both ways. I actually worked with a small local IT consultant company for about 2 months shortly before I started to start my own company. It's kind of a long story, but I was very unhappy working for the IT consultant company for countless reasons (mainly because he never paid me on time). I saw how this IT consultant company ran the business and within the first 5 minutes of working there I knew I could do better. Luckily I was able to turn a very negative situation into a positive life changing decision (at least so far).
    Essendon wrote: »
    2. How did you guys get your first customer and how hard was it? Did you have to rely on a contact to help get you your first contract or did you get a call in response to an advert you put on the yellowpages or something?

    My first customer was a former employer whom I worked 7 years for (the job before working at the IT Consultant company). I was fortunate to negotiate a deal with them to let me work 4 hours a day at a contractor rate. This was absolutely huge for me because it gave me steady income while I was able to then spend the rest of my day building my company. I think it was important that I had a great relationship with my previous employer and he knew my skill set and knew what kind of employee I was. The negotiation was literally only a 3 minute conversation and the owner didn't even hesitate to agree to the deal. We didn't actually put anything on paper, just a verbal. I have yet to have a written contract. Some people in this world absolutely HATE paper contracts. I'm one of them. I'd say if the client wants a paper contract, give it to them. But don't push contracts on customers, as they may not like them. But certainly tell them your contractor rates and what they can expect from you up front and/or ask what they expect from you.

    Most of my other clients have just been word of mouth. In fact, Dynamik actually referred someone to me after he had left Minnesota. So I guess he actually is good for something icon_wink.gif ....just kidding, thanks dude!
    Essendon wrote: »
    3. When did you know that you knew enough to go face a situation all by yourself? Now I know a fair bit about Exchange/AD but am no guru at it, say your very first client rings you up and says their forwarder has suddenly stopped working or a mailbox store doesn’t mount, you wouldn’t be able to give the client the "warm fuzzy feeling" when you get there if you didn’t know what you should be looking for. So when do you know that know enough.

    You have to realize that you don't have to know everything yourself. Use your resources. Use the vendors. Like anything in IT, there's a learning curve with technology consistently changing. If you have to call Microsoft tech support, so be it. When I first started working in IT, I had to call in an IT consultant 3-4 times. Each time the consultant had to call up the vendor or Microsoft. Maybe you know another high caliber consultant in the area. Don't be afraid to ask him for help if you're stuck.

    I've seen some pretty half ass IT consultants out there, trust me. I'm no computer god, but I believe I can do the job better than most other IT consultants. Confidence is a must if your small business owner. You can do it! You've put in significant study time and have been doing this for a while. Trust yourself. If you can't trust yourself, who else will?
    Essendon wrote: »
    4. Did you have to have a sales guy do the pitch for you first and you went and closed the sale or did you have to do it all yourself too. I am not that good at convincing people and am working on my public speaking skills (joining a local Toastmaster’s soon), is this going to be substantially harder without well developed communication skills.

    I don't really do a whole lot of sales pitches personally. I just try and have a normal conversation with the client and ask and answer any questions. I also like the under-promise over-deliver strategy here.
    Essendon wrote: »
    5. I believe it is very important to have concisely written literature on what services your company offers. Would you guys have printed copies or just rely on the material you post on your website.

    I'm with eMeS on this one. I have just my services listed on my website and a word document if anyone wants one. I probably should create at least 1 professional flyer....maybe when I get time. I wouldn't spend too much time on making your company look like a million dollar company at this point. Customers would then expect million dollar service. Know what I mean? This goes back to the under promise over deliver.
    Essendon wrote: »
    6. Number 5 raises another question, how about a company name. You don’t want any whacky names such as Monkeyboy Technologies or Pink Mutt Inc., how did you go about choosing a name.

    Exactly. I tried to choose something that if Joe Blow heard my company name, he would immediately know what my company did. My company is called "Northern Computer Networks". I think it's pretty clear what my company does from my business name, eh?
    Essendon wrote: »
    7. What obstacles did you come up against and what was your course of action. How did you identify that a market need exists which hasn’t been filled yet? I have been reading Million Dollar Consulting written by Alan Weiss, a book that eMeS recommended in one of his extraordinarily and very informative long post on the same subject once. The book rightly says you need to be able to identify a market need, the skills to fulfil those needs and the desire to do so. Would you guys recommend that I should start learning what the market needs or should I hone my skills in my area of interest.

    I'd just recommend that you pay attention to what technologies your clients have and try to mold your skill set to them. Other than that, not sure what to really tell you.


    My last peice of advise would be to try not to over think everything. Keep things simple in the beginning.
    WIP: CCENT/CCNA (.....probably)
  • eMeSeMeS Posts: 1,875Registered Members
    I think it can work both ways. I actually worked with a small local IT consultant company for about 2 months shortly before I started to start my own company. It's kind of a long story, but I was very unhappy working for the IT consultant company for countless reasons (mainly because he never paid me on time). I saw how this IT consultant company ran the business and within the first 5 minutes of working there I knew I could do better. Luckily I was able to turn a very negative situation into a positive life changing decision (at least so far).

    Other than being cantankerous and not liking to "work" for other people, this is largely how I ended up starting my own shop as well. I used to be in a position where I worked for a large financial services firm. I often had to hire consultants. Over the course of doing that for several years I knew that I could offer much better service than the big consulting firms were providing and be much happier in the process of doing it.
    My first customer was a former employer whom I worked 7 years for (the job before working at the IT Consultant company). I was fortunate to negotiate a deal with them to let me work 4 hours a day at a contractor rate. This was absolutely huge for me because it gave me steady income while I was able to then spend the rest of my day building my company. I think it was important that I had a great relationship with my previous employer and he knew my skill set and knew what kind of employee I was. The negotiation was literally only a 3 minute conversation and the owner didn't even hesitate to agree to the deal. We didn't actually put anything on paper, just a verbal. I have yet to have a written contract. Some people in this world absolutely HATE paper contracts. I'm one of them. I'd say if the client wants a paper contract, give it to them. But don't push contracts on customers, as they may not like them. But certainly tell them your contractor rates and what they can expect from you up front and/or ask what they expect from you.

    I don't generally care so much about specific contracts with customers as I do care about PO's being issued. If I have a fully approved PO associated with a statement of work then I'm good...in my world the existence of an approved PO is exactly the same as the customer having already spent the money.
    I've seen some pretty half ass IT consultants out there, trust me.

    Agree 100%. Sometimes just showing up wearing clothing that is fresh and stain free sets you apart from the crowd. This is a serious statement based on real experience with having people show up that looked like they ate last week's lunch on their shirt. The vendor will remain nameless, but it is a big one.

    In this vein I recommend having samples of your work that you can share. I win a ton of business simply because I'm able to provide a sample of something like an ITIL Gap Analysis. I don't give them the whole thing, rather, I have about a 10 page sanitized sample that I share. They don't read it, but it gives them an idea of the end result.

    I win a ton of business, even take some away from the big guys, simply by having relevant examples of the work that we can provide.
    I tried to choose something that if Joe Blow heard my company name, he would immediately know what my company did. My company is called "Northern Computer Networks". I think it's pretty clear what my company does from my business name, eh?

    It is clear. People appreciate that.

    I can't stress enough how foolishly some out there choose their company names. The most annoying thing to me is the prevalence of companies that people have named after themselves.

    MS
  • EssendonEssendon Posts: 4,548Registered Members ■■■■■■■■■■
    Thanks a million for sharing your experience and for the valuable advice, this is one of the biggest reasons this site's the best and you guys absolutely rock! Much appreciated.
    NSX, NSX, more NSX..

    Blog >> http://virtual10.com
  • dynamikdynamik Posts: 12,314Banned
    I'm making more than I ever have in my life. I am also much happier with my career than I was a year ago. Here's my 2 cents...

    It just struck me how funny it was that we were struggling to complete our MCSEs a couple years ago.
    So I guess he actually is good for something icon_wink.gif

    Why are you trying to tear down the reputation I worked so hard to achieve!?
    eMeS wrote: »
    Agree 100%. Sometimes just showing up wearing clothing that is fresh and stain free sets you apart from the crowd. This is a serious statement based on real experience with having people show up that looked like they ate last week's lunch on their shirt. The vendor will remain nameless, but it is a big one.

    We regularly get told we don't "look the type" or get asked where the analysts are (assuming we're sales or something) when we do on-site services. I guess the ties throw people off...
    eMeS wrote: »
    The most annoying thing to me is the prevalence of companies that people have named after themselves.

    Wait, so you're saying I shouldn't have gone with Johnson Penetration for my pen testing company? icon_redface.gif
  • earweedearweed Posts: 5,192Registered Members
    dynamik wrote: »
    Wait, so you're saying I shouldn't have gone with Johnson Penetration for my pen testing company? icon_redface.gif

    rofl..that name is just plain inappropriate. This is a rated G forumicon_wink.gif

    I have my own little PC repair business. I use my name and my initials in it. Initials being IT helps out..lol
    No longer work in IT. Play around with stuff sometimes still and fix stuff for friends and relatives.
  • undomielundomiel Posts: 2,818Registered Members
    Well I may be able to give a bit of insight into this one, I hope. I currently work for a consulting company for small to mid-size businesses. It's a small number of employees and I work directly with the owner so I get to see a lot of the behind the scenes work.

    I'll address your question of what to do when all of your googling and research yields no results and you're out of options. Call the vendor. Don't be afraid to do so. In the over 1 year I've been working with this company I've put in 3 calls to MS, though in all 3 instances I had the problem solved by the time MS called back or during the call so I got the credits refunded. But especially in instances where a support call doesn't cost you anything then it can save you a whole lot of grief. For instance there is this one company we've recently taken over, no documentation and lots of niche applications, so google is useless. Support call comes in at 2 am with production halted due to an application being down. I poked at it for a bit then put in the call. Support had me back up and running in 5 minutes just because they knew what they were doing. And now I knew too so I could fix it the next time it happened. So again, don't be afraid to call.

    Another thing I've seen the company I work for do is bring in outside help. We have all the MS and SonicWall expertise that we need, but when it comes to some of the more complex Cisco configurations then we have a few contractors that we can call upon when needed. Sure it cuts down the profit margin but things get resolved smoothly, a good working relationship is maintained with the company, and they eventually will bring some more work our direction. We also get contracted ourselves by another consulting company that is weak in Exchange and clustering. We keep their customers happy, they get more, and then we get more of that work.

    In sales what I've seen the owner do is all about the face to face. He has a written couple page overview of what the company does, some background on the employees, some company references, and that is pretty much it. A number of the companies do check with the references too. The sale comes from having a competitive price and sounding like he knows what he is talking about. Style-wise he adapts to what he senses the company representative will respond to. For some he writes out detailed approaches to how the job will be done, especially when they already have an IT department, and some other it is just one or two sentences about what the end result will be. Up until earlier this year the owner was the sole sales guy. Most business was found through referrals and networking. We just recently brought on a sales guy who does cold calling. Average is about 1 in person meeting for every 100 calls the last I heard. I couldn't tell you what percentage of those worked out though.

    And to definitely agree with what people have been saying here, you don't need to be an expert in a particular IT field to get a sale. I've sometimes wondered how this company last for 7 years before I came on, just because there are some wide gaping holes in the current employees' understanding of Active Directory. But that didn't stop them from getting sales and keeping clients productive. Sometimes the situation really does just call for duct tape.
    Jumping on the IT blogging band wagon -- http://www.jefferyland.com/
  • garv221garv221 Posts: 1,914Registered Members
    The key to consulting is being good at what you do, being a very likable person with great social skills and securing monthly retainer contracts (residual income).

    My advice is securing some contracts and slowly creep into it. It is hard to get rich by setting up small networks and servers.
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