Introduction
In the first article, we took a look at some of the things you need to consider when setting up your own development firm. In this article, I'd like to take a look at the infrastructure you are going to need for your business. I was going to be dealing with the paperwork that we produce, contracts and so on, but the comments on the previous article led me to think that this article was necessary.
I'm going to assume, for the purpose of this article, that you're just starting out contracting, i.e. selling your skills to companies, or you've set up a small consulting shop. The infrastructure that is detailed here mainly applies in both cases (there can be differences), but can be applied to other business models just as easily.
Disclaimer
This article will not guarantee success. It is not intended to replace all the hours that you are going to have to work in order to develop your client base and it only deals with working with clients.
Infrastructure Defined
Before we go any further, we need to define what infrastructure actually means. According to The Free Dictionary, infrastructure is defined as:
1. An underlying base or foundation especially for an organization or system.
2. The basic facilities, services, and installations needed for the functioning of a community or society, such as transportation and communications systems, water and power lines, and public institutions including schools, post offices, and prisons.
So, in our case, the infrastructure is the underlying base for the organisation. We're going to take a look at two different types of infrastructure that you are going to need for your company; people based and equipment.
People Based Infrastructure
I use the term "people based" here to define the fact that you are going to need support from people other than yourself. Before you can even begin to think about running your company, you really need to understand that you need support from an accountant, legal team and banking. In some cases, an accountancy company will offer you basic legal advice, but it is worth the time hunting out a good business legal team (due to cultural differences, I've shied away from using the term Lawyer or Solicitor here, but you can take it as read that this is what I'm talking about). Certainly, the accountant will be able to recommend a business banking account, but again feel free to hunt one out for yourself.
In the previous paragraph, I mentioned a business bank account. You are going to be running a business so you need a business account to pay the money into. It's not your money - it's the businesses. You can pay yourself a salary, and maybe dividends and bonuses, but your company needs to be run to post a profit. Hopefully you will build up the profit enough so that you have a financial cushion when business is lean. This is vital, and I can't stress this enough, there will come a time when the clients stop coming in. Recessions happen, and businesses without reserves will fold. In order to ride out the bad times, you need money in the account because you'll still be paying salaries and all the taxes even when there is nothing coming onto your order books.
You need to understand that you will be running a business as a legal entity in its own right, and as a result you have to comply with the laws of the country you live in. I'm not going to go into any of the legal issues that you need to consider because these differ from country to country (and, in some cases state to state). Suffice it to say that you need to get advice from your accountant AND legal team before you start the company.
Part of the people infrastructure that tends to be ignored, is your family and friends. It is vital that they understand what you are doing, and the pressures that will be on you when you are getting your business off the ground. You are going to be working seriously long hours, and you need the people with a personal connection to understand that it's not personal, you aren't ignoring them. If it's family, stress that you are doing this for them - it's harder if you've got kids because they won't understand why Mom or Dad can't play with them, but with a bit of help and support you will build up this personal side.
If you are employing people, you need to consider hiring somebody to look after the Human Resources/Personnel side. Don't outsource this because it is a task that really can keep somebody busy day in day out. If you country is like the United Kingdom then there will be a whole raft of employment laws that you need to keep abreast of, and having a dedicated HR person really does pay off because they can steer you clear of a very messy problem.
So how do you actually go about finding accountants, etc...? Well, this is where you should really start practicing your networking skills. In most countries there are government run agencies that specialise in businesses (here in the UK we have BusinessLink). These often co-operate with local business groups who normally have regular meetings where they get together to discuss issues, get advice and have a general talk about the successes that local companies are having. These meetings are really worth going to because you will talk to potential clients in an informal setting, and you will get the chance to pick peoples brains. Personal recommendation is valuable so listen to these people - some of them will be accountants, legal types and so on. If you are lucky enough to have business breakfasts in your area, these are another valuable way to pick up contacts and to generate potential business leads.
Equipment Infrastructure
Needless to say, you are going to need a computer, but what else will you need?
Well, you should definitely consider getting a business telephone line. It's invaluable to have a line where customers can ring you that isn't going to be tied up by your other half being on the phone to the parents. Similarly, you should consider having a fax machine and a scanner. With the advent of all-in-one printers, it makes sense to get one that covers for both while you are just setting up.
A mobile phone is vital. You should be contactable at the drop of a hat, so you should always have a charged phone. Don't get a pay as you go, it should be a contract phone. Consider getting an in-car charger for your phone - I'm lucky enough to have one that has a USB charger as well so there is no excuse for it not being charged. Hunt around for a phone network that is going to let you keep in touch. Service from some providers can be patchy, at best, so they should be avoided.
What about software? Well, if you're a developer then you should definitely have the compiler of the language(s) that you are going to develop in. Also, you should invest in an Office suite. The Office document formats are understood by most suites, so you can choose whichever one you really want but you should always transfer documents in the Office format (avoid the new Office format because lots of companies haven't made the leap yet).
Get yourself a day planner. You will come to rely on it more and more to keep track of your appointments. If you are lucky enough to run a firm with multiple staff, make sure you hire yourself a PA. A good PA is like gold - they will keep you on track.
One of the hardest things that you will do is define your corporate identity. You really need to start this up-front. Your identity will evolve as time goes on, but you need to get a version sorted sooner rather than later. You will need business cards, letterhead and a website right from the start. You can get good quality business cards and letterhead from VistaPrint - they allow you to define your own templates. I also like to keep my business cards in a card holder - it prevents them from getting dirty, and keeps them straight and easy to get to. Keep your logos, colour schemes and fonts simple at the start. You should use the same images, fonts and colours on your website and business card, and your letterhead should use the same font and colours (steer clear of images). A personal plea here - don't put up a half finished website. Don't put links to pages with "Under construction" on them. These irritate the life out of me, and will put your potential clients off.
Finally, splash out on some good quality clothes. Suits for the gentlemen (tailored if possible) and smart-business for the ladies. They aren't, strictly speaking, equipment, but they do define how you will be viewed. By the way - when you network, you are initially judged on how you present yourself. People will be far more receptive if you wear the uniform of business.
Final Thoughts
Well, I hope that this has helped. In the next article I'll take a look at some of the documentation that we use with clients, and how to build a relationship with a client. In future articles, we'll take a more in depth look at issues such as creating your identity and networking. Again, keep those comments coming in - they will help define the shape this series will take.
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 | Very nice.
Rutvik Dave | 5:56 12 Mar '09 |
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Looks like I am a bit late to read the series.  5 from me.
The fun part in the article series is "Disclaimer" 
Thanks...
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| Waiting for the third
Maruf Maniruzzaman | 21:15 9 Mar '08 |
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When that is coming? 
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Maruf
Thanks for your interest. I'm in the process of writing the third and fourth articles in this series. In article 3, I'm giving away some of the documentation that we use in our company so I have to make sure it's cleansed of all references to the company.
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GREAT!! Looking forward to.
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Here[^] you go. Enjoy (I hope).
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| Pieces of advice from an oldtimer
very-old-timer | 5:33 5 Mar '08 |
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Keep the following rules in mind (one for each day in the week to remember ):
1. Control your destiny or someone else will
2. face reality as it is, not as it was, nor as you wish it was
3. change before you have to
4. if you don't have competitive advantage, don't compete
5. be cadid with everyone
6. don't manage - LEAD!
7. ackknowledge your mistakes before someone exaggerates them.
Nice article with good learning points.
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Very good points. Very good points indeed, especially point 4.
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| Thanks Pete!
Manvir Singh | 7:09 26 Feb '08 |
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First of all thanks a lot for such a great article. I have been struggling with this thought of Going Solo, for some time. And today (by good luck) I found a link to your articles, which are worth reading. I am really looking forward to the coming articles.
Currently, I have one question, how to find customers online, if one is a new entrant in this field of business?
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Networking, word of mouth and blogging. These are all invaluable tools. Coming soon, I will be posting an article with ideas from others on how they gained market visibility.
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| Couple comments from a younger business owner that probably took the leap too soon [modified]
dev_maniac12 | 18:47 25 Feb '08 |
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Excellent article... Hope you keep going with it.
My situation is probably unique. I left the small consulting company where I started my career to start my own business when I was 25. I had one big client with a huge project (start-up software company, making the product). I'd done smaller projects for their other business, they liked me a lot, and I had a huge ego... Suffice it to say that I fell flat on my face in a lot of ways, but was able to turn it around eventually. Sometimes the best way to learn how to swim is to jump in the deep end. 
Thought I'd share my two biggest stumbling blocks, for any other hotshot coders out there thinking about striking it out on their own. Maybe you can expand upon this in a future article? I can tell you that the following are things you NEED to learn to run your own business ( / manage large projects). And that it'll be harder than you think.
Project planning - if you're currently a hotshot programmer, or have even done some project management, but have never tackled a really large project, this is challenging. You need to have a very well defined plan for how to tackle a project to have any prayer of making it on time and budget. Include time (lots of it) for researching and planning architecture decisions, for creating and reviewing detailed specs (every page or form you code and the entire db should be spec'd out before you start coding if at all possible), and testing, several phases of testing. Then double your estimates for how long you think the coding will take, especially if you're planning to hire other programmers to do part of the work. And on documentation, it doesn't have to be formal or perfect, make it readable, try to cover all the details, do what works for you, and keep revising it as you go.
Delegating effectively - It's a mess of contradictions: You can't do everything yourself, yet you're responsible for the work. Micromanaging will take too much time and anger people, but if you don't inject urgency and organization nothing will ever get done. I've learned, one, hire quality and pay for it, it's worth it. Then try to find a balance, develop relationships with people and share what's going on to get buy-in, check in frequently and encourage them to ask questions, and most importantly (and tied to the planning) give them solid specs to work from.
You could (and lots of people have) write a book on each of these topics. Just wanted to share a couple tidbits here. Mostly I'd say, if you want to and have the opportunity to strike out on your own, go for it. You'll need a really high belief in yourself and a lot of time and hard-work. The rest you can learn as you go.
modified on Monday, February 25, 2008 11:57 PM
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Great, something like this was what I was asking Mr. Pete to write about. To get some insight from young people that started a a business.
Thanks
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| Good one
Sohail Kadiwala | 4:51 24 Feb '08 |
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A very good article. I look forward to the next in line
Cheers,
Sohail
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I think it a very good article. As Pete writes, every country and business is different. So it's really hard to make the article right for everyone and cover every aspects that it needs. But it provides a general guideline and this will be a good starting point.
Though UK is different from US, I am interested to know more about the legal advice like how to cover the business risk associated with going solo. I think the details maybe different but general principal should be universal.
Thanks again and look forward to the next episode.
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I think that even when countries have their own legal systems, contracts should be the same as it represents an agreement between both parties on the deal. So contracts would be an invaluable advice for starters.
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Here[^] you go. Enjoy yourself with it.
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| Your advice is terrible and has NOTHING to do with the REAL World...
Butch from Brooklyn | 15:51 23 Feb '08 |
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Hi,
In general a business starts with sales and if you demand at least partial pre-payment for sevices cash flow is not a problem.
I know the heads of the IT departments of several multi-billion dollar companies and would really laugh at your articles, Part I and PArt II.
I assume that you have at least created and own one consulting firm that does at least $50 millin a year? If not, your advice is worthless because it has no real world experience or proof behind it.
I remember that the first guy I ever put on an infomercial selling a course on How to Buy Real Estate with No Money Down and MAke Millions had never bought a house in his life--but we made millions selling his course which was about as good as your article here.
So what are your credentials? I must have missed your success story that tell us that you know what you are talking about? What have you done?
What it comes down to is this... them that can DO, and them that can't... write articles... or teach. 
Butch from Brooklyn
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Pete has started this series as a general pointer for those considering going solo and running their own business. As I said, it is a general pointer relevant to all business models, however, if you want specifics aimed at Consultancy, you should wait and see what Pete delivers in the remainder of his articles.
Butch from Brooklyn wrote: In general a business starts with sales and if you demand at least partial pre-payment for sevices cash flow is not a problem
That is wrong for many business types/models. For Consultancy or Developer work then that would be the norm if that is how the sales negotiations progressed. But not everybody who is a member of Code Project fits into that Consultancy/Developer pigeon hole, yet the basic general rules in conducting and running a business is always relevant.
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Butch. Thanks for you input. All opinions are valuable, so thanks for this even though you and I are talking about completely different things. I know absolutely zip, nadda, nothing about running infomercials so I don't pretend that I do - that's your thing, and kudos to you for it. I do know about running a consultancy though, mine has survived two recessions and is well placed for a third thanks to some rather lucrative government contracts.
No, we don't do $50 million a year - and I make no claims that it does. As far as I can tell from you and your blatant self promotion is you do infomercials. You don't do consultancy. You don't provide support services for clients, so your points in this field are about as valid as any I would make about infomercials. Just because you know others in the field doesn't make you an expert, nor does all your hot air.
"In general a business starts with sales and if you demand at least partial pre-payment for sevices cash flow is not a problem."
Yup - and that's part of what we'll be covering when we go through the contract cycle, when we go over payment cycles and staged deliveries.
BTW - which bit do you actually disagree with? Which bit do you think DOESN'T apply to starting up a development company? I'd be really interested to hear which bits you think are wrong.
But again. Thanks for your comments. I look forward to all your learned replies in each part of the series.
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In that I disagree with you Pete, comments that do nothing but put unconstructive criticism without valid arguments, talking about a whole different thing and that tries to bloat your knowledge by contesting your background has abslutely no value to me and I might say, to you.
I'd say it is just good make you mad as you put your efforts on helpful articles so just someone with no sense on what they are talking about just say offensive stuff to try putting you down. To me his only intention was that, to put you down. And that is just someone you might reply here for formality but ignore on your own reality.
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Fabio, thanks for this. I agree that on the surface he seems to want to do nothing but inflate his own importance, but the important thing to me is that people get a chance to read his comments and then make their own opinions. Maybe I just haven't put the position to him clearly enough that this series is about starting out with a consultancy/contract development company, in which case the fault is entirely mine. He needn't read it if he doesn't want to go down that route, but the best way to deflate an argument is to challenge the accuser to justify their opinions, rather than to get involved in a he said/she said.
More importantly, every post gives me insight into what it is that people want out of this series. It's an open ended series, and we will probably revisit ground covered already as it progresses so that we can flesh things out.
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Peter,
both your articles are great!
I find them very useful since I am thinking about working on my own too. They seem very logic and mature advice.
About that guy butch, please ignore him. It seems to me everything he says are just lies, and doesnt have a clue of anything he writes (or thinks).
Again, excelent article and thank you.
Alejandro.
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Thanks for that Alejandro. I'm not too worried about Butch - there's always somebody willing to have a go at articles. I'm not writing them for the plaudits - just to pass on the experiences I've gained over the last 10 years.
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