Comment by trapexit
2 years ago
I run small outsourced IT systems for SMBs. Web scrapers, reporting, stuff like that. Baisically private bespoke SaaS.
About $10k/mo gross revenue and takes a few hours of work a week (unless there’s a downtime event that needs fixing). A lot of upfront work to build some of these systems though.
Got to $2k/mo in the first month of doing this. I don’t recommend working (as a solo operator) with clients who have budgets less than $5-10k/mo. Too much overhead for too little return in that case.
In what little spare time I have left after my day job and looking after two small kids, I put more automation in place to improve reliability for my clients and reduce my own ops time requirement.
I get leads for this by referral from people I’ve done good work for in the past. But it’s the kind of thing you could bootstrap by direct outbound sales, publishing authority-building content to the right business audience, going to conferences/trade shows, or building a referral network from other service provides.
I’ve thought about doing this, but a few reservations came up when I considered getting started with a family friend. I just pictured a contracted ”IT MANAGER” getting rabbit holed into some time-sink extreme;
1. Dedicated operational IT admin: Dealing with repetitive tasks+requests, like managing customer’s Microsoft environment and on-site infrastructure.. Owning physical and AD infra doesn’t sound like a part-time job.
For e.g; a/v and physical IT asks; like conference room operation maintenance and support, Desktop workstation triage (have you tried turning the monitor on?). The dreaded “can you set up the printer?”…
And what if the customer sets me up as their site’s dedicated AD domain admin? Resulting in repetitive requests for user/access management CRUD operations. And/or micromanagement of tedious things like email and mailing lists…
Or
2. Dedicated software developer, website or business workflows.
Building a website and getting micromanaged or overburdened. (“can you change the logo to blue?” “Can you redesign the whole home page?”)
Or, get pulled deep into providing a business-critical software workflow or application. Fielding sales/exec requests, interpreting their business requirements, and then building AND delivering (for e.g a customer management system) is not a part time job…
How do you operate to keep the scope limited? What steps help buffer yourself from a slippery slope of full-time services?
The word "no" can be very effective. Remember that you control the type of work that you take on.
I have a small side gig building "controllers." By controllers I mean devices that are typically arduino controlled and use peripherals in the arduino ecosystem. They span a very wide range, but are typically very feature-limited. e.g., I have a client who is converting massage chairs to be pay-per-use.
As you noted, it's not easy to keep a service-based business from growing to take over all your time. I manage it by keeping the feature set clearly specified and working on fixed price.
Want to add a feature we didn't discuss? That's another charge. My niche is taking on very small projects that are too small to move the needle for a full-blown engineering services company (I've worked for two) and I always work fixed-price, so I need to be very aggressive about scope creep.
Project scope keeps growing? Either tell the client that it will be a while until I have time to complete it, or, more frequently, that they will need to find someone else. This is pretty easy to say because as mentioned above I'm clear about only taking on small projects.
I've had people who basically want me to be their engineering department. That's a hard "no:" I simply don't have the time.
I don’t take on huge IT projects anymore, or ones that have potential to require lots of changes over time.
Used to do this as an agency principal and it involved a lot of time spent managing clients and projects and subcontractors. Drove myself crazy and took a couple years off after nearly burning out.
I look for projects where the software solves a single targeted business problem and can quickly get to “done”. Then the client is happy to pay for ongoing maintenance/ops, so any additional effort I put into the software is around reducing my ongoing workload.
A couple questions, if you don't mind. How did you go about finding clients? What is the nature of the work agreement—project-based, hourly, or something else?
Clients for this work have come almost entirely by referral. See my other comments in this thread.
For ongoing things I do fixed rate or usage based pricing.
For custom one-off stuff, consultancy, and build-out of systems I charge a day rate.
Would love to learn more about this. What type of SMBs do you target? How did you acquire your first customer?
I work mostly in the travel industry. First client 10+ years ago came from a friend who worked as a manager in a large company and needed some special software built to improve his unit’s results - the existing contractor was not good and internal IT did not have time/skill.
Follow on work came from other people at that first client company who knew my work and went on to work at other companies.