Start a tech support business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your tech support business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a tech support business?
Initial investment in this line of business is fairly minimal. You will need the software and hardware required to operate your business, including a high performance computer and at least one monitor. High-speed Internet and a decided phone line should also be budgeted for. If you plan to make house calls, make sure you have reliable transportation. A website and a sound marketing strategy, including online and printed material, should also be a part of your initial investment. General liability business insurance will set you back between $300 to $1500 per year, depending upon the specifics of your company. Experienced professionals recommend budgeting for $12,000 to $28,000, with an additional $10,000 if you decide to franchise.
What are the ongoing expenses for a tech support business?
Much like your start-up costs, ongoing expenses are fairly minimal. Your largest expense, aside from payroll costs, will be continuing education. It is critical, however, that you keep your skills current, so do not try to use this as a way to trim the budget. Additionally, you will want to invest in websites such as Microsoft's Experts Exchange, where you can ask for assistance when you run into a roadblock. Fees will set you back approximately $99 annually. Travel expenses, insurance, website maintenance, and business insurance should also be budgeted for.
Who is the target market?
New business owners are cautioned against defining their target market as “anyone that has a computer issue.” This is too broad. Define your ideal customer based on your skills and experience, as well as what is needed in your area. Since residential clients are often on a tighter budget, consider targeting small businesses. Many tech support business owners have found success focusing on remote PC support.
How does a tech support business make money?
Tech support companies generate revenue from the services they offer, including management of servers, computers, and networks. Clients are billed by the hour.
How much can you charge customers?
Hourly rates vary based on region and services provided. The national average is $100 per hour, with rates going as high as $160. It is standard to charge an additional fee for holiday, after-hours, and emergency assignments.
How much profit can a tech support business make?
If you are the sole employee and plan to work fifty weeks out of the year, your business will draw in $150,000 per year with just twenty hours of work per week. When determining your hourly rate, be sure to factor in ongoing expenses.
How can you make your business more profitable?
As previously mentioned, gaining additional certification stands to significantly increase your business’ profits, as does hiring team members with varying skills and experience. If you possess strong communication skills and are well-versed on the subject, offering training and basic computer classes could be a great way to increase your enterprise’s profits.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your tech support business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: You can get $300 when you open a Chase Total Business Checking® account with qualifying activities. Learn More.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a tech support business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A tech support business is generally run out of a home or office. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a tech support business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your tech support business will be in compliance and able to obtain a CO.
Tech support businesses should consider requiring clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and so on.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a tech support business
Advertising your business’ services should include a variety of strategies. Many have found success advertising in community periodicals, local newspapers and magazines, computer stores, and at community centers. Ads on social media sites and search engines should also be part of your strategy. Attend business trade conferences and chamber of commerce meetings, networking with as many professionals as you can. One successful tech support business owner indicates that pounding the pavement and educating businesses on the services he offers has generated the greatest number of clients.
How to keep customers coming back
In addition to delivering strong customer service on each job, stress the value of a preventative maintenance plan. Clients will see a reduction in downtime and you will gain steady work.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Tech Support Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Are you the person your friends and family call whenever they have a computer or software problem? Do you enjoy working with computers? Have you received any official training or considered obtaining certification? If you answered yes to any of these questions, this business venture could be the perfect fit for you.
What happens during a typical day at a tech support business?
Your days will largely be spent troubleshooting and fixing your client’s computer and software issues. The specifics of what this entails vary, depending upon the services you offer. If your work is done on-site, part of each day will be spent traveling from site to site. Additionally, you will need to spend five to ten hours each week networking and marketing and taking care of any other administrative duties that require your attention. This is an ever-evolving industry, so it is also critical that you remain abreast of the latest trends and regularly add to your arsenal of certifications.
What are some skills and experiences that will help you build a successful tech support business?
In this industry, professional training and certification is critical to your success. You must be able to work with a variety of systems and do so quickly and efficiently. A+ certification and Network + certification are both highly recommended. Having strong computer skills, however, is only part of the equation. You must be able to communicate with clients and possess the interpersonal and leadership skills required to network, market, and manage a business. If this is not a part of your skill set, it is recommended that you attend business and/or marketing classes at your local community college or hire a professional to assist you.
What is the growth potential for a tech support business?
Recent reports reveal that the computer services industry generates more than $47 billion annually. The employees you hire and your team’s education and background are, ultimately, what will define your organization’s long-term success.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a tech support business?
Since this is a recession-proof industry where there will always be a need, it is recommended that you carefully map out your business strategy. Those who fail to do so often dissolve their business within the first year. Experienced tech support entrepreneurs offer the following advice:
- Clearly define your workflow and stick to it with each client.
- Use a time tracker to ensure you are billing for the correct number of hours. Failing to do so could result in lost money.
- Be confident in the recommendations you make to clients. While there will be times where your suggestions are met with resistance, it’s important to keep in mind that you are the expert. Work with customers who value your hard work and professional experience.
- Clearly define your hours. Make yourself available during the hours your target market would most require your services.
- Make sure you draw up a contract for each client and make sure it has a strong indemnification clause. Work with a lawyer when drawing up your contract.
- Get as much certification as possible.
- Have a sound system for generating invoices and make payment for services as painless as possible for your customers. Make sure your clients understand when payment is expected.
How and when to build a team
For many, an attorney and bookkeeper are a critical part of their team. When it is time to start building, carefully consider each candidate. Hire staff that is well-trained, has worked in the industry, and possesses the education required to complete the work. Hiring staff that is certified in areas that you are not is also a good strategy, as it expands the pool of customers you can service.