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Do you want to start an IT Consulting business plan?
Do you want to start an IT consulting business? It’s a great idea If you are thinking about it, especially if you want to start a small but profitable business. It requires fundamental knowledge of IT and an understanding of customer dealing. And you can start it on your own or with a small team too.
Even though it is a relatively simple business to start, you should still use a business plan for IT consulting as a guiding tool. It is a significant step when you wonder how to start an IT consulting business. Business plans are always helpful even if you’re reading a sample life coaching business plan.
So, it’s up to you. Either hire business plan writing services or write your own business plan using this document as a guide.
Executive Summary of IT Consulting Firm
2.1 The Business
Hampton’s IT Consulting will be an IT consulting startup owned by Ruby Hampton. The company will provide IT consultation services in and around the Brooklyn area. It will offer a wide variety of services ranging from simple consultations to system development, implementation and management.
2.2 Management of IT Consulting Company
Ever wondered how to start your own IT consulting business? The best start is to read a lot of business plans for IT consulting and then develop one of your own. The best business plan strategy ensures success with adequate human and technical resources planning.
So, if you want to do IT consulting for small business, you need to go through the trouble of writing a business plan like this one.
2.3 Customers of IT Consulting Company
To start a IT consulting business, you need to identify your customers. Our customers will come from all walks of life:
- Small and Large Businesses
- Government Facilities
- Educational Facilities
- Small and Large Stores
2.4 Business Target
Our target is to become the most trusted and demanded consulting company in Brooklyn for customers who need help achieving their business goals through IT.
We want to achieve the below-mentioned financial targets for the first two years of our launch:
Company Summary of IT Consulting Firm
3.1 Company Owner
Ruby Hampton will be the owner of Hampton’s IT Consulting. Ruby completed her Master’s in IT about two years back. Afterwards, she worked for an IT consultation company in Manhattan. After that, she left the job to start her own endeavour in the field.
3.2 Why the IT Consulting company is being started
Ruby noticed that many businesses around her Brooklyn hometown were struggling to make adequate use of their IT resources for improving their work. She realized that she could use her knowledge and experience to improve the functions of businesses in Brooklyn. And so, she decided to start her own IT consulting firm.
3.3 How the IT Consulting company will be started
Step1: Plan Everything
The first step in learning how to start a IT consulting business of your own is to develop a business plan for IT consulting firm. To help you figure out how to set up an IT consulting business, we are providing a sample business plan here. Ruby decided to offer consultations services to every business under the sun, so you can use this plan for IT consulting business ideas for any business. You can also hire business plan experts to handle everything for you.
Step2: Define the Brand
You need to develop a brand for your business that can help you stand out. In this phase, you highlight your professional values and policies towards your customers to show your competitive advantage.
Step3: Establish Your Corporate Office
Ruby decided to rent out an office in a Brooklyn commercial building for starting the firm. But, first, she will put together a small team and procure the computing equipment needed.
Step4: Establish a Web Presence
Online advertisement is a huge part of the marketing of any business. Understanding this, Ruby decided to create social media profiles for her business and get a website developed. She expects that it will help her stay connected to her clients.
Step5: Promote and Market
In the final phase, a comprehensive marketing plan needs to be executed to promote the business.
| Start-up Expenses | |
| Legal | $122,200 |
| Consultants | $0 |
| Insurance | $13,000 |
| Rent | $33,000 |
| Research and Development | $10,000 |
| Expensed Equipment | $26,000 |
| Signs | $3,400 |
| TOTAL START-UP EXPENSES | $207,600 |
| Start-up Assets | $226,000 |
| Cash Required | $169,000 |
| Start-up Inventory | $39,000 |
| Other Current Assets | $240,000 |
| Long-term Assets | $217,000 |
| TOTAL ASSETS | $891,000 |
| Total Requirements | $1,098,600 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $207,600 |
| Start-up Assets to Fund | $891,000 |
| TOTAL FUNDING REQUIRED | $1,098,600 |
| Assets | |
| Non-cash Assets from Start-up | $1,156,000 |
| Cash Requirements from Start-up | $285,000 |
| Additional Cash Raised | $50,000 |
| Cash Balance on Starting Date | $35,000 |
| TOTAL ASSETS | $1,526,000 |
| Liabilities and Capital | |
| Liabilities | $18,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $48,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $66,000 |
| Capital | |
| Planned Investment | $1,098,600 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,098,600 |
| Loss at Start-up (Start-up Expenses) | $361,400 |
| TOTAL CAPITAL | $1,460,000 |
| TOTAL CAPITAL AND LIABILITIES | $1,526,000 |
| Total Funding | $1,098,600 |
Services of IT Consulting Firm
Before you start an IT consulting business company, you need to figure out what your services will be. That way, you can plan your business around these services you will provide to the customers.
A strong IT consulting business model contains detailed information about the services of an IT business consulting group.
Since Ruby decided to offer a wide variety of services, this IT consulting services business plan can be used as a reference for any business plan. Even a private counseling practice business plan.
So if you want to start your own IT consulting business, you can take help from this document. Here, we are describing all the services offered by Hampton’s IT consulting briefly:
IT Infrastructure Planning
We will provide a basic infrastructure consultation service. In this service, we will analyze the client’s business requirements and provide them with a comprehensive plan to develop their infrastructure resources around their business.
Security Consulting
We will also offer security IT security consultation, which will include:
- Security Planning against future attacks
- Security reinforcements
- Development and Implementation of a Security System if required
Risk Assessment Analysis
Our firm will also provide analysis and risk assessment of the IT infrastructure of the business. The client can then avail of our resources further to alleviate the concerns uncovered by the analysis.
Disaster Recovery Planning
IT systems are prone to disasters. Our firm will ensure a system that can recover from any unexpected disaster at a quick pace so that our customers don’t have to face any troubles.
Marketing Analysis of IT Consulting Firm
When you want to start an IT consulting business or any other business, you should have a good idea of who your customer base and competition will be. This information is usually added as a part of IT consulting firm business plan for an IT firm or a business plan for business consulting.
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You can gain insights about your customers and competition through a marketing analysis. Any expert will tell you that marketing analysis is a crucial part of a business plan, let it be a sample IT consulting business plan or a mortgage business plan template.
In case you don’t know how to conduct marketing analysis, you can reach out to some IT business consulting experts. You can also use this document as a learning point for developing a business plan for IT consulting business software. Below, we have presented a detailed marketing analysis of Hampton’s IT Consulting Firm.
5.1 Market Trends
According to IBISWorld, the IT Consultation business in the US has a bold market share of $525.3 Billion. And as of 2021, it continues to grow at a rate of 2.4% every year. Taking a general view, the involvement of digital devices and systems is increasing day by day in every industry. As a result, businesses are looking for ways to shift their old infrastructures to the digital realm. It means that the demand for IT consultation services is not about to go down any time soon.
5.2 Marketing Segmentation
The expected customer base of Hampton’s IT Consulting is divided into the following groups:
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5.2.1 Government Facilities
The primary area of the shift to digital services is the government facilities. These facilities require a lot of assistance to shift their systems online or improve existing systems without affecting their operations too much. So they are expected to be our long time customers.
5.2.2 Small/ Large Businesses
Our second biggest customers will be the businesses that want to stay up-to-date with the newest technology. They are expected to utilize our services regularly as well.
5.2.3 Educational Facilities
Educational facilities also require developments in their IT systems quite regularly. So, they are also expected to use our services from time to time.
5.2.4 Commercial Stores of Every Scale
Last but not least, most retail stores are going online and need robust systems for that purpose. We expect to provide our services to these clients as well.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Businesses | 31% | 21,000 | 25,200 | 30,240 | 36,288 | 43,546 | 10.00% |
| Educational Facilities | 27% | 18,000 | 21,600 | 25,920 | 31,104 | 37,325 | 10.00% |
| Commerical Stores | 26% | 15,000 | 18,000 | 21,600 | 25,920 | 31,104 | 10.00% |
| Government Facilities | 16% | 12,000 | 14,400 | 17,280 | 20,736 | 24,883 | 11.00% |
| Total | 100% | 66,000 | 79,200 | 95,040 | 114,048 | 136,858 | 10% |
5.3 Business Target
- To become the most trusted IT consultation firm in all of Manhattan
- To increase the scale and reach of the business over the next five years
- To achieve a profit margin of $100k per month by the end of the second year
- To maintain customer satisfaction above 95%
5.4 Product Pricing
Our prices will be dependent on the range of services required by the customers. They will be along the same lines as the market standard. But we will maintain continuous communication with the clients to ensure satisfaction till the end.
Marketing Strategy of IT Consulting Firm
To start own IT consulting business, you need a solid marketing plan to stand out in the industry. To gain this prominence, and for marketing IT consulting business, you need to find promising areas of your businesses that will help customers recognize you as a better option.
Like a freelance business plan, you need to showcase your distinctions. In this IT consulting startup business plan, we are detailing a marketing plan for Hampton’s IT Consulting:
6.1 Competitive Analysis
- We have excellent customer care and support services. We will ensure to take feedback from our customers to improve our performance regularly.
- Our clients can reach us at any time through our contact, website or social media, and we will get back to them at the earliest possible time.
- We will not only implement systems but also guide our customers in how to use them. We will also offer standing support to help the clients whenever they need it.
6.2 Sales Strategy
- We will offer free maintenance and support to our recurring customers over two years.
- We will advertise our services through Google ads, word of mouth and social media.
- We will also offer discounts to our new customers.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| IT Infrastructure | 876 | 929 | 984 |
| Security Consulting | 674 | 714 | 757 |
| Risk Assessment | 453 | 480 | 509 |
| Disaster Recovery | 124 | 131 | 139 |
| TOTAL UNIT SALES | 2,127 | 2,255 | 2,390 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| IT Infrastructure | $1,250.00 | $1,450.00 | $1,682.00 |
| Security Consulting | $1,250.00 | $1,450.00 | $1,682.00 |
| Risk Assessment | $1,450.00 | $1,682.00 | $1,951.12 |
| Disaster Recovery | $1,750.00 | $2,030.00 | $2,354.80 |
| Sales | |||
| IT Infrastructure | $1,095,000.00 | $1,346,412.00 | $1,655,548.20 |
| Security Consulting | $842,500.00 | $1,035,938.00 | $1,273,789.36 |
| Risk Assessment | $656,850.00 | $807,662.76 | $993,102.13 |
| Disaster Recovery | $217,000.00 | $266,823.20 | $328,085.81 |
| TOTAL SALES | $2,811,350.00 | $3,456,835.96 | $4,250,525.50 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| IT Infrastructure | $950.00 | $1,045.00 | $1,097.25 |
| Security Consulting | $950.00 | $1,045.00 | $1,097.25 |
| Risk Assessment | $1,000.00 | $1,100.00 | $1,155.00 |
| Disaster Recovery | $1,250.00 | $1,375.00 | $1,443.75 |
| Direct Cost of Sales | |||
| IT Infrastructure | $832,200.00 | $970,345.20 | $1,079,994.21 |
| Security Consulting | $640,300.00 | $746,589.80 | $830,954.45 |
| Risk Assessment | $453,000.00 | $528,198.00 | $587,884.37 |
| Disaster Recovery | $155,000.00 | $180,730.00 | $201,152.49 |
| Subtotal Direct Cost of Sales | $2,080,500.00 | $2,425,863.00 | $2,699,985.52 |
Personnel plan of IT Consulting Firm
An IT consulting business proposal contains information about business personnel as well. This is because the success of a business is highly dependent on the workforce, especially for big IT consulting business names. Wanting to uphold these standards and to become a part of IT consulting business slogans, Ruby detailed the team requirements and selection criterion in the business plan:
7.1 Company Staff
- 1 Co Manager
- 6 IT Executives combined in 3 teams to handle client systems developments
- 1 Technician to upkeep the machinery
- 1 Web Developer/ Mobile App Developer to manage online sites
- 1 Sales Executive to organize and promote contracts
- 1 Accountant
- 1 Receptionist
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Manager | $40,000 | $44,000 | $48,400 |
| IT Executives | $142,000 | $156,200 | $171,820 |
| Technician | $15,000 | $16,500 | $18,150 |
| Web Developer | $25,000 | $27,500 | $30,250 |
| Sales Executives | $25,000 | $27,500 | $30,250 |
| Accountant | $15,000 | $16,500 | $18,150 |
| Receptionist | $30,000 | $33,000 | $36,300 |
| Total Salaries | $292,000 | $321,200 | $353,320 |
Financial Plan of IT Consulting Firm
The success of a business isn’t just ensured by sales. Every business needs a financial plan to make sure that the business is working on the correct route and providing a profit. A financial plan is as important to It consulting definition business as it is to a business plan for recruitment firm.
Note
A financial plan doesn’t only help you in managing your expenses. It also helps to answer fundamental questions like how much does it cost to start a consulting business.
Here we’re providing the detailed financial plan of Hampton’s IT Consulting. You can get an idea of the business finances through this plan.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.12% | 8.20% | 8.26% |
| Long-term Interest Rate | 8.40% | 8.44% | 8.47% |
| Tax Rate | 24.03% | 24.21% | 24.60% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $132,500 |
| Assumptions: | |
| Average Per-Unit Revenue | $231.00 |
| Average Per-Unit Variable Cost | $0.62 |
| Estimated Monthly Fixed Cost | $163,800 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $2,811,350 | $3,456,836 | $4,250,525 |
| Direct Cost of Sales | $2,080,500 | $2,425,863 | $2,699,986 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $2,080,500 | $2,425,863 | $2,699,986 |
| Gross Margin | $730,850 | $1,030,973 | $1,550,540 |
| Gross Margin % | 26.00% | 29.82% | 36.48% |
| Expenses | |||
| Payroll | $292,000 | $321,200 | $353,320 |
| Sales and Marketing and Other Expenses | $145,000 | $148,000 | $156,000 |
| Depreciation | $2,300 | $2,350 | $2,500 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,900 | $3,000 | $3,100 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $2,900 | $3,000 | $3,200 |
| Payroll Taxes | $24,000 | $25,000 | $27,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $471,200 | $504,650 | $547,220 |
| Profit Before Interest and Taxes | $259,650 | $526,323 | $1,003,320 |
| EBITDA | $259,650 | $526,323 | $1,003,320 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $51,930 | $105,265 | $200,664 |
| Net Profit | $207,720 | $421,058 | $802,656 |
| Net Profit/Sales | 7.39% | 12.18% | 18.88% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $51,000 | $55,080 | $59,486 |
| Cash from Receivables | $22,000 | $23,760 | $25,661 |
| SUBTOTAL CASH FROM OPERATIONS | $73,000 | $79,570 | $85,936 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $74,000 | $79,000 | $85,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $42,000 | $42,000 | $45,000 |
| Bill Payments | $27,000 | $28,000 | $31,000 |
| SUBTOTAL SPENT ON OPERATIONS | $69,000 | $70,000 | $76,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $69,000 | $74,520 | $80,482 |
| Net Cash Flow | $21,000 | $23,000 | $25,000 |
| Cash Balance | $27,000 | $30,000 | $33,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $275,000 | $308,000 | $338,800 |
| Accounts Receivable | $24,000 | $26,880 | $30,213 |
| Inventory | $4,300 | $4,816 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $282,000 | $315,840 | $355,004 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,400 | $21,728 | $24,444 |
| TOTAL LONG-TERM ASSETS | $24,400 | $27,328 | $30,744 |
| TOTAL ASSETS | $294,000 | $329,280 | $370,440 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $18,700 | $20,944 | $23,541 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $19,000 | $21,280 | $23,919 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $15,000 | $16,800 | $18,883 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $53,000 | $57,770 | $63,547 |
| Earnings | $193,400 | $210,806 | $231,887 |
| TOTAL CAPITAL | $285,000 | $310,650 | $341,715 |
| TOTAL LIABILITIES AND CAPITAL | $300,000 | $329,280 | $370,440 |
| Net Worth | $293,400 | $319,806 | $351,787 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.25% | 8.03% | 8.90% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.21% | 10.20% | 11.31% | 9.80% |
| Inventory | 5.39% | 5.97% | 6.62% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 149.80% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 11.55% | 11.60% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.90% | 4.94% | 4.98% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.59% | 7.65% | 7.72% | 7.38% |
| NET WORTH | 100.45% | 101.25% | 102.19% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.60% | 97.15% | 99.87% | 99.00% |
| Selling, General & Administrative Expenses | 93.56% | 96.09% | 98.78% | 97.80% |
| Advertising Expenses | 1.52% | 1.56% | 1.60% | 1.40% |
| Profit Before Interest and Taxes | 41.50% | 42.62% | 43.81% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 33 | 33.8 | 34.645 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 74.08% | 74.89% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 96.30% | 101.12% | 106.17% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.56% | 34.60% | 35.67% | N.A. |
| Return on Equity | 55.80% | 57.53% | 59.31% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.4 | 34.02 | 35 | N.A. |
| Accounts Payable Turnover | 15.6 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $244,000 | $257,664 | $272,093 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.87 | 0.89 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29 | 29.12 | 29.16 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
FAQ
How do I write a business plan for a consulting business?
A business plan is critical if you are wondering how do I start a consulting business. You can take help from this document for writing a consulting business plan.
What does an IT business consultant do?
An IT consultant has many job roles such as system development and implementation, maintenance, security and analysis of systems.
How much does it cost to start a IT consulting business?
The costs of starting an IT business depends on the scale of the business and requirements. But if you want to know how much does it cost to do a business plan, it generally ranges between $5k to $10k.
How do I start a computer consulting business?
If you want to start a computer consulting, you will need a computer consulting business plan. You can refer to this document for help in that matter.
Download IT Consulting Business Plan Sample in pdf
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