How to Start a Tech Support Business

Start a tech support business by following these 10 steps:

1. Plan your Tech Support Business
2. Form your Tech Support Business into a Legal Entity
3. Register your Tech Support Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Tech Support Business
6. Get the Necessary Permits & Licenses for your Tech Support Business
7. Get Tech Support Business Insurance
8. Define your Tech Support Business Brand
9. Create your Tech Support Business Website
10. Set up your Business Phone System

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.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Tech Support Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

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.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your tech support business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

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.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

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.

Service Contracts

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.

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.

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.

Not sure if a tech support business is right for you? Try our free Business Idea Generator and find your perfect idea.