How to get first clients from scratch?

[toughen]

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Hi Guys,

Firstly, I’ve only found this forum about a week ago and think it is going to be an awesome resource! Good work.

I have done some searching so hopefully I haven’t missed anything too obvious.

I’m tossing up whether to buy an existing business or start from scratch. It will be an IT services business and I don’t believe there is one currently operating in my area. I previously ran a similar business but just didn’t have the work coming in to keep me afloat. I tried email outs to several different industries at the time, even trying to direct the email to the right person in each business but only had a single response.

My question is, if I decided to start my business from scratch and how do I get my initial clients? I hate the idea of door knocking businesses/cold calling and I personally don’t think it is effective. There is a small “computer shop” about 30 mins away for sale advertised for $70k. I haven’t even talked to them yet, so I don’t know how much repeat business they have or anything, however it looks like a business that I could grow into what I want to create.

Is it possible to contract a salesperson to find me work? I guess I just don’t even know what they would be doing and how effective it would be to spend that money. What other options do I have?

I would have to leave my job so I can be available for any work, it is not really something I can start after hours. So I don’t want to be sitting on my hands for months waiting to see what happens.

Edit: Sorry I should also have said I don’t think my Google page rank and online ads are really going to help me target local businesses where I am. I will still have a website and go through SEO for the page etc.

Thanks for any advice,

Toughen

[MissSassy]

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Hi Toughen and welcome

Learning to generate clients is not easy but even if you buy a business you will need to generate ongoing business. Networking for example will be ideal for a business like you have mentioned.

I would suggest that you contact a business adviser to coach you through this. You will get more confident with time.

You will need to cover a wide range of things and this is where a business adviser can help you both before you get started and once you are going. Cash flow can be taken into account to measure how long you can survive and what you need to do in order to quickly grow the business.

[rmck]

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toughen, post: 185561 wrote:

Hi Guys,

Firstly, I’ve only found this forum about a week ago and think it is going to be an awesome resource! Good work.

I have done some searching so hopefully I haven’t missed anything too obvious.

I’m tossing up whether to buy an existing business or start from scratch. It will be an IT services business and I don’t believe there is one currently operating in my area. I previously ran a similar business but just didn’t have the work coming in to keep me afloat. I tried email outs to several different industries at the time, even trying to direct the email to the right person in each business but only had a single response.

My question is, if I decided to start my business from scratch and how do I get my initial clients? I hate the idea of door knocking businesses/cold calling and I personally don’t think it is effective. There is a small “computer shop” about 30 mins away for sale advertised for $70k. I haven’t even talked to them yet, so I don’t know how much repeat business they have or anything, however it looks like a business that I could grow into what I want to create.

Is it possible to contract a salesperson to find me work? I guess I just don’t even know what they would be doing and how effective it would be to spend that money. What other options do I have?

I would have to leave my job so I can be available for any work, it is not really something I can start after hours. So I don’t want to be sitting on my hands for months waiting to see what happens.

Edit: Sorry I should also have said I don’t think my Google page rank and online ads are really going to help me target local businesses where I am. I will still have a website and go through SEO for the page etc.

Thanks for any advice,

Toughen

Hi Toughen,

IT is not my area, but I do work along side IT people 2 days per week and know for a fact that they rely on “managed services” that they sell explicitly to B2B customers.

Maybe developing your own “managed services” model will help you to stabilise your income.

Will a local “computer shop” force you into an existing business model that does not match your goals?

A lot of IT people now work from remote locations too!

BTW – what is you area of expertise?

Good luck!

Ryan

[toughen]

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Thanks for the replies!

One of the advantages I see to buying a business is having existing cashflow and possibly even someone already working on building new business. I suppose the question is could I build the same or more business with the same money.

Ryan, B2B managed services is essentially what I want to target but I would be happy to support a retail side if there was any.

Yes, any business clients I would always aim to support remotely if possible. There are obviously situations where being on site is required and it is good to build the relationship.

I have about 10 years experience in IT Support at different levels, primarily in corporate environments.

Toughen

[rmck]

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toughen, post: 185583 wrote:

Thanks for the replies!

One of the advantages I see to buying a business is having existing cashflow and possibly even someone already working on building new business. I suppose the question is could I build the same or more business with the same money.

Ryan, B2B managed services is essentially what I want to target but I would be happy to support a retail side if there was any.

Yes, any business clients I would always aim to support remotely if possible. There are obviously situations where being on site is required and it is good to build the relationship.

I have about 10 years experience in IT Support at different levels, primarily in corporate environments.

Toughen

Here is a bit more.

IT are pushing a lot of new gear (very little to no in-house builds) preferring to act like middle men. The big brands like HP are offering long warranties on their commercial ranges that fit with their managed agreements.

The IT manager has also teamed up with a finance company and now offers clients leasing arrangements on the equipment AND install, removing the initial cash outlay as a barrier.

Very little business is done over the counter and the IT team spend much of their time at client offices. Sometimes setting up new environments and sometimes fixing issues (normally software related).

Hope that helps.

Ryan

[toughen]

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Yeah, I’d also be pushing cloud services because it removes the hardware component all together and it’s dirt cheap these days.

[rmck]

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toughen, post: 185596 wrote:

Yeah, I’d also be pushing cloud services because it removes the hardware component all together and it’s dirt cheap these days.

True and I personally use cloud service for value and convenience.

Food for thought. If you’re selling and managing predominantly cloud services where do the margins come from?

Ryan

[toughen]

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Businesses still need support. Day to day desktop support for PC’s in their office and a lot of industries will still have their own systems in place that can’t simply be “moved to the cloud”.

I know there is work there, my question is around getting the clients.

[rmck]

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toughen, post: 185604 wrote:

Businesses still need support. Day to day desktop support for PC’s in their office and a lot of industries will still have their own systems in place that can’t simply be “moved to the cloud”.

I know there is work there, my question is around getting the clients.

No worries just letting you know what has worked for said IT company.

As you’ve mentioned your online presence will be important prior to a reputation.

Maybe there is a local business chamber that hold after hours functions that you can tap into.

All the best!

Ryan

[Tony Manto]

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Hi Toughen, all the above post have valid points which most you have agreed with, but here is what I think.

First of all buying a customer base is much, much easier that building one from scratch.

Think of the time and lost income you will have to endure before you start to make a profit.

This is called opportunity cost.

You could loose much more up front income that the 70K you are talking about.

But that being said, a couple of things to consider.

Will the clients your buy stay with you once the current owner leaves. All personal service business are just that, personal. A percentage could leave you?

How much is hardware business and how much is service type business? If there is a lot of hardware type business with very low profit, you will be stuck in the shop and not have time to get out or perform the service type of business.

How big is your reachable target market. How many other businesses nearby that could use your services?

Are you clear on the new types of services you can and want to offer?

How many other business are in your area that provide the same type of service?

These are all questions you need to ask.

Now I have said all that, getting back to your question on how to get new clients. Unfortunately the answer is not that easy to answer in an email.

There are various methods you can use to gain clients. All work in different ways.

I can tell you for a fact that its not going to be in once call.

You will have to build up a relationship with each client before they can trust you. This might mean offering a solution at no charge to gain their loyalty. This may mean attending many network meetings or even inviting them to your place of business and holding your own. This may mean inviting them to a presentation on a new software that might interested them.

There a many different strategies you can use. This is why buying the clientele would be easier, providing its the right type of clientele.

I agree with Miss Sassy, getting a business adviser or business coach would be a good idea.

[Victoria Cavallo]

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Hi Toughen!
Something to keep in mind when buying an existing business is retention.

People buy (especially services) from people NOT companies, so there’s no guarantee the clients will stick around if the business changes hands.

The best way to ensure a high retention is to go out and meet each client face to face, just a quick pop in to say hello so they can meet you – you’ll find you get a lot more loyalty from clients who have seen your face, shared a smile and shaken your hand.

Not exactly cold calling for new business but still something some people find uncomfortable doing so they put it off and then wonder why they loose clients to competitors.

I know you said you hate to cold call but coming from a sales background, if you’re targeting businesses in a certain area its the best way to get new business.

Doesn’t have to be a big deal – just drop in with a business card, tell them you’re a new biz in their area specialising in XYZ and do they have any IT issues needing attention – reckon you’ll get some work on the spot doing that! Businesses always ignoring computer issues until the last minute because they are too busy to find someone to come out!

Other than that – get ranked in local directories online.

[Simply Money Honey]

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Hi Toughen

Have you considered joining some sort of IT contractor network? I don’t have any experience in IT consulting but I know when I had computer issues I called Geeks 2 You and they sent a contractor out to fix my computer. The guy that came out worked for himself. I don’t know exactly how it work but I imagine Geeks 2 You take a % of the fee for marketing, making the booking etc and the contractor takes the rest. Might be something worth investigating as you build your business?

Cheers

Gabrielle

[Author]

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