Contracting tips

I know there are quite a few of you on this board that do/have done independant contracting. I would like to ask you all a few questions because I am interested in doing so myself.

How do you go about billing/setting up your contracts? Do you go through a lawyer to set up your contracts and a printing service for your bills?

I'm interested in doing work for businesses rather than just going to a person's house and doing work like reinstalling windows or spyware checks. Would the best way to do this be going through a hiring company?

Please, anybody who has done this type of work, share your experiences and how successful you were.

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EverythingPCowner

Depending on the size of the company; they will probably have a legal staff to make the contract and send it to you to sign. This is based only on my two contract experiances though....

Dont forget to put some money away for Uncle Sam!

entzilla

Thanks!

I'm looking to do some contract stuff on weekends and evenings when I'm not at work, just something to bring in a better income. It will probably start off being for small businesses.

determinedgerman

Hey entzilla,

I was working on the exact same thing. Plus the funny thing is I am in Plainfield as well. I would open up a small company. Get incorporated and get a website and do everything over your own company instead of going through the customer. You can get pre-written contract that you can change around. If you have an attorney just let them do it or just write a contract yourself.

entzilla

Heh, I guess I should update my info. I'm currently in Round Rock, Texas (Just recently moved earlier this month) working at Dell as a temp for Enterprise Server Support. I wanted to start up something on the side so I can have a better income.

Starting a business seems like the best bet. If you don't mind, I'd like to know how you are handling parts? For instance, if you need to replace a drive in a customer's machine, are you planning on ordering the parts from a company as you need them, or do you have an inventory? Also, is there any type of deal you were able to work out with a supplier, or how do you go about getting your parts?

keatron

1. Contracts; If you want to keep yourself out of court, get an attorney (who's got experience in writing these types of contracts). If you really want to write them yourself, then at least pay an attorney to look over them. Even though it might be the case that most of your clients will have contracts for you to sign, you need to have your own because not all clients will have their own, and two, their contracts are to protect them, you need something to protect yourself.

2. Parts; Simple. Form some alliances with some of the bigger hardware resellers, For example, my company did this very thing. All of our Cisco equipment comes from a particular seller (this is in writing also). From this advantage, we get very good prices, and actual contracts (I do lots of training for this reseller).

Good luck.

entzilla

Did you form the relationship through the training?

Trailerisf

I work for a very small company, lol (2 of us). We handle about 50 different clients ranging from home pc's to 50 workstations. We have about 5-6 big clients that keep us busy and we fill in the gaps the best we can.

We average about 18-20k billing a month between the two of us. The highest being almost 30k (NO LIFE). We carry -0- in inventory (other than small odds and ends - cables etc) We live in a metropolitan city where I can go to a supplier and grab the hardware as needed.

We use palm's to record our hours and export it to Quickbooks directly for billing. We don't have contracts in place with the customers as we bill them hourly. Paperwork takes about 1 full day a month.

We have accounts with most large manufactures (dell, hp, compaq) and buy direct. In the last month alone, we have purchased over $150k in dell servers.

All of our customers have come over 8 years from word of mouth. No Advertising. No Marketing.

determinedgerman

Hey Trailerisf,

How did you start your business? Without Advertising and Marketing how did you get your first customers? All through word of mouth through relatives and friends or how did you do it? I was in the process of doing some site work as well and want to start my own company just for part time work.
Did you cold call small businesses at all? I would appreciate any advise.

Thanks

EverythingPCowner

Yea i forgot to mention going through your own company. Rather than be a consultant advertising yourself...definately open a company called "whats happening now technologies" or whatever and you never have to let anyone know its a one man operation. Just say "i think we have someone who will suit your needs" and send your resume or professional outline.

Trailerisf

The guy I work with ended up starting the business... He moved to Canada from South Africa and had no job... He went to a larger computer companys and just filled in their gaps as a consultant. They had 20 or so techs and didnt always need a 21st.

Larger companies provide "crap" customer relations... Always a diff guy showing up. He is a very personable guy and ended up chatting up the people at a jobsite. He was there to solve a problem the other tech couldnt. The tech quoted 8 hrs to do the job.... He did it in 45 mins and was given the contract on the spot.

Most of the companies we have when the employees leave, they end up calling us to their new jobs... Being a people person helps... Don't be the geek in the corner.

Our customers are law firms, investment firms, mutual fund companies, stock market companies. One of the companies we deal with has 12 companies under the umbrella (they also own a NHL hockey team)

We do alot of home pc work as well.. We only bill $50/hr for it... But $200 for an o/s reinstall that you image is easy money. I can sit here and do 4 in an evening while studying.

keatron

Entzilla, to answer your question, Yes there has been relationships built through the training, but more importantly, the relationship I built while pushing out their hardware is what opened the doors for me to get into doing training for them. It's the old "one hand feeds the other" analogy.

We're now working on a non-profit org (this is in addition to my existing company) to provide technology training to under served demographic areas and people. Things like IC3, MOUS, etc. You wouldn't believe how many grants there are out there waiting for someone to do this (my cousin works for the US GAO, they're responsible for anaylzing grants and the need for certain grants). So with that being said, I of course have an inside track on writing the grants properly, submitting them properly etc etc. They key is to make sure you use every resource you can to get things going. Here's my advice for starting a business. There's much more, but these are some things often overlooked.

1. Plan your business all the way down to the end game. How big do you want it to be in the end (be specific, come up with an exact number, an org chart, how many people in each position for example, how many desktop support technicians do you want to employ, how many admins, how many network engineers, how many security professionals, how many trainers, etc etc etc.... Be extremely specific. Otherwise you're just taking a crap shoot. You can't just say, if it grows it grows, if it doesn't it doesn't. You have to form a solid plan, figure out how to carry it out and get there, then COMMIT COMMIT COMMIT. I had to play piano at jazz clubs, churches, and weddings to support myself until the business was where it needed to be. Are you willing to work nights at mcdonalds flipping burgers while your business is being built?

2. You have to be passionate and truely love doing this stuff. If you're in IT for money, prestige, or only because you "like computers", you will NOT be happy, and you wont be passionate, and it will show. Your work will show it, and your clients will see it eventually. If you're passionate about what you're doing, guess what? That will show, and clients will see that.

3. Only take jobs you can do. Not following this is the fastest way to screw up something and get yourself into court. I know of several IT consultants who know absolutely nothing about IT, they just sub out everything to people who do know (or so they think). End result is, they have no form of quality control and often end up with a bad stigma attached to their company because of poor work a sub-contractor did.

4. Understand that building a business is an entirely seperate job from running a business and doing the actual work to bring in money. I don't know if I can stress this enough. The movie Field of dreams comes to mind. "If you build it, they will come". Build a world class business and clients will flock. Most importantly, be consistent. You as the owner should make sure that your clients (large or small) have a world class experience everytime you or on of your employees or partners interact with them. Do this CONSISTENTLY and they will come. I promise.

5. Know your competitors, know what their edge is, and know what your edge is. If you don't know what your edge is, create one and develop it.

6. Get good legal representation, and a good CPA to help you. They're actually more reasonable than you might think. Make sure the attorney is one with experience in incorporation and representing corporations.

You can start doing these things now while you're still working full time. I spent 3 years and about $12000 on attornies, cpa's, and business seminars before I even thought about actually taking the step out into the world of ownership. I did all of this while still working full time. You have the time, find it and utilize it. By the time I actually incorporated, I only had to focus on building relationships, and staying current with my skills. Everything else was already thought about, accounted for, and already on auto-pilot.

Since we live in the same area, I'd be happy to have you as a guest at one of the seminars, or many other events we co-sponser with various vendors, and industry trade groups. I have no problem showing you what we did differently that has made my company a success.

Thanks for reading all this,

Keatron.

Webmaster

And thank you for writing all that. That's some healthy solid advice.

And good luck with the non-prof!

porengo

keatron,

It looks like you and I will need to talk as well.

I've founded a volunteer organization called TeamTechies (www.teamtechies.org) whose vision is to empower non-profits with free or low-cost technical solutions. We are also committed to empowering individuals who, although certified, lack the extensive experience that many IT organizations require. So, we're creating a win-win situation where non-profits get to complete IT projects that were put on hold, or may never have been done because of bugetary restrictions. Plus, newly certified individuals can gain valuable hands-on experience they need to get that first IT job.

We've recruited corporate sponsorship to support some of our project, but we also need to start looking at other options as well; such as grant opportunities.

We've been really successful with TeamTechies in New York City, and plan to expand. So, I'd like to invite anyone who would be interested in starting a TeamTechies in their area to contact me. After all, there is no group of people more dedicated to contribution and support than the members of this bulletin board...TechExams.

Peter Orengo
(porengo)

JDMurray

The very first thing you need to look into is business insurance. You will eventually get sued by an angry customer who thinks that you broke their computer, destroyed files, or copied their personal information. If a customer of yours is a victim of electronic fraud or identity theft, the first question the police will ask is "has anyone worked on your computer lately?" Be prepared to spend a lot of time in small claims court either defending yourself or trying to collect money from deadbeat customers.

Just a CYA needed by all computer repair people.

keatron

The first person you should talk to is a corporate attorney. Insurance companies' focus is selling you insurance, that's what they do. Corporate attornys specialize in helping people form corporations and represent corporations in court. Any attorney worth his bread will strongly advise you to obtain insurance coverage before you start doing business, but there are many things that you have to think about and do before going out and touching one computer. You go out and let some insurance broker or company sell you insurance that covers a, b, and c. The next thing you know you're very busy and now you're doing all kinds of cool work that you never even imagined, then you get into something like VoIP, the money is now rolling in, you're doing 2 or 3 installs per day. Then someone's phone communications are down for 6 hours due to a mis-configuration on CME router. Two months later, they file a suit against you seeking damages for loss of business, blah blah blah. You call your insurance company, and they tell you to go screw yourself because when they created your policy, it didn't cover anything about telecommunications or VoIP. Why? Because you signed up for coverage on computer maintenance and repair and nothing else. So the services you were offering were rendering (IP Telephony) was not covered. I've been a business owner for long enough to have seen several channel partners, alliance partners, and competitors take a royal plunge because of things like this. Then who do you go to when the insurance company won't pay up? That's right!! Your attorney!!!!!! So again, take my advice start with a good corporate attorney.

The basics you'll need are general liability and errors and omissions. Errors and omissions can be pretty steep (especially for startups), but better safe than sorry. Again, your attorney should advise you of this as he should be the first person you talk to, because becoming incorporated is the first step, you can't get insurance on a business until you have a business formed. The exact specifics on this vary from state to state and country to country.

Read these books

E-Myth Revisted

E-Myth Mastery

These books were the most helpful pieces of literature I've ever read about business.

entzilla

For those of you that do purchase parts...

Is there a way for a small company to go about purchasing parts directly from another company (example: Sony)? Or do small companies likely have to use a 3rd party to buy parts from?

determinedgerman

You are better of going through an online reseller like CDW and such. Won't get a good deal through the manufacturer. I guess it depends on the manufacturer, Some don't sell direct at all and some do...

keatron

Learn these two words.....

Partnership and Alliance.

To be honest with you, you can get set up an agreement with some manufacturers, but usually they want you to do so many millions per year in sales etc etc. Then again some take the opposite approach, they feel that by partnering with small companies who are out front being visable and in the faces of their customers, will do a better job at pushing out their product. So my advice? Get yourself a wishlist of about 10 manufacturers, go to their websites and submit the needed information as far as forming a partnership. Then follow up with a phone call.

Out of 20, you have a pretty good chance of nailing at least one down. If not, just make another list and start over again. Sometimes building alliances with smaller manufacturers first pays off in the long run. Keep in mind that this will take some patience.

entzilla

germangiant wrote:

You are better of going through an online reseller like CDW and such. Won't get a good deal through the manufacturer. I guess it depends on the manufacturer, Some don't sell direct at all and some do...

What is CDW and their website?

Thanks for all of the advice everyone.

entzilla

entzilla wrote:

germangiant wrote:

You are better of going through an online reseller like CDW and such. Won't get a good deal through the manufacturer. I guess it depends on the manufacturer, Some don't sell direct at all and some do...

What is CDW and their website?

Thanks for all of the advice everyone.

I'm assuming CDW.com, but I'm not seeing where to buy wholesale..

determinedgerman

CDW is just an online retailer. If you want better prices and service just tell them that you want to open an account and they will assign your account to an Account Executive. He will call you once in a while trying to sell stuff to you but tell them what you want and to send you a quote. When you get the quote tell them that you are getting it cheaper from somewhere else. Believe me I worked for Dartek.com which was part of Tigerdirect.com and is now the Tigerdirect Business to Business unit. You open an account with them and they will set up a custom website for you and you can request quotes and stuff through that website or just call your Account Executive. If you are doing this for your company let me know and I can get you in contact with an Account Executive @ CDW. By the way the website is cdw.com.

I mean they are good. If you get a good guy you will never ever need to do any research anymore. They will do it for you and set you up with everything you need. When I did this customers would call me and ask me to put quotes for them together. They just told me what they want to do and I would research the product they need.

keatron

My best friend is an account exec at CDW. CDW is based here in Chicagoland (Vernon Hills to be exact). If you can position yourself as a VAR (value added reseller) or get in their partnership program, you will be in a better position to get better discounts. You will basically be placed in a certain Tier in their system which means you get a certain level of pricing. If you know someone on the inside, or if you buy/sell a ton of stuff your first year doing business with them, you'll get raised per your sales/purchases. We were able to get ahhhh I guess I should say very good pricing because of internal relationships. We also provide training for CDW's pre-sales engineers and some of the specialists. If you want to get in with CDW, PM me and I'll give you some contacts there.