Thursday, September 07, 2006

A startup consultancy for $1000 down and $40 per month

There's been lots of talk on business model innovation, but you haven't read much on how radically new technologies have changed the professional services business. Online collaboration tools, email, portable computing and wireless have all increased consultant productivity and lowered cost.

Business Week recently described how to start an online retail business for $3,000. Well, we've got them one better. How about a consulting business for less than $1,000?

Time was, a consultant needed either a corporate affiliation (how expensive is that?) or a sizable infrastructure including an office, telephone system, staff, computer network, etc. Today, many of these items can be outsourced or shared. Consultants can both use subcontractors to staff their projects and be subcontractors themselves. With the internet, clients can come from anywhere, and with strong local networks, bartering can lower cash outlay substantially.

It's a whole new world out there, where the value a consultant and his network can bring is most important, and the size of the office, or prestige of the address fades appropriately into the background.

Here's a business model, using products and services readily available in the marketplace, to run a consulting business on a radically reduced budget. Will it offer a professional appearance to prospects? More to the point, will it work? We'll see. I'm trying it myself.

Upfront Costs:

Used laptop $220.00

Office software $0.00
Accounting software $200.00
Web site development $0.00
DIY using Yahoo Sitebuilder
Wireless email device $100.00
With 2-year contract
Corporate filing fee $125.00
State of Pennsylvania
Business cards $80.00

Business card design, logo $0.00
Legal $0.00
All-in-one printer $250.00

Total $975.00

Ongoing Monthly Costs:

Home office $0.00

Broadband $0.00
Shared with home use
Wireless voice $0.00
Shared with home use
Wireless email $20.00
Verizon EVDO add-on
Web hosting, email, etc. $12.95
Yahoo Small Business
Business line $4.00
Skype with call forwarding
Salaries $0.00
Use subcontractors as required

Total $36.95