I am often asked to participate in discussions about subjects related to being involved in IT consulting and specifically related to being a good IT contractor.  I was recently asked by eWeek to talk about IT consulting and about the process of transitioning into starting your own business.

"A lot of times when people leave a corporate job, they’ll take their salary and divide it by 2,000 hours, realize they were making, say $20 an hour, decide to charge $30 per hour and conclude that they’ll do just fine. But, they don’t realize that you can’t bill out 40 hours a week without working 60 or 80…”

"The first thing you want to look at is the utilization rate, the ratio of the hours you are billing to the hours you are working. Billing 30 hours per week, or a 75 percent utilization rate, is a good place to shoot for.”
"For every dollar you take in, one-third will go to sales, marketing and promotional activities. This money could later on be used for your first salesperson position … The second third is administrative costs, from insurance to retirement and FICA benefits, lab equipment, training and certifications. The third part is what you can afford to pay even another technical person as a salary so you can take on more clients."

To hear more about what I had to say in this article about being a great IT contractor and some of the other important steps to starting your own business, visit the attached link!

Added By:  Joshua Feinberg