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Advice on How to Start an IT Business (Video)
Lee Drake owns a small IT service and sales company in Rochester, New York, called OS Cubed. He was a cubicle denizen many years ago, and didn't like it. So he started his own business, first with a partner and later as the sole owner. Rochester may be part of the infamous "rust belt," but Lee seems to be doing well, to the point where he's happy to pass on some tips about how to start and grow your own IT business. While Lee's company specializes in "Microsoft solutions," his advice applies to almost any IT business -- and almost any other kind of business, too.
To become financially independent.
Several people have looked into how people become wealthy, and they divide the methods into 5 broad categories.
The categories(*) change depending on how you slice them, but generally the two which are accessible to everyone are: 1) Commission sales, and 2) Starting a business.
Commission sales is for things like IBM mainframes, telecom equipment or movie scripts, where a single sale can net you 6-digit commissions. A number of people have become independent doing this.
If you can run a successful business you get to build up equity using tax breaks and the productivity of your employees. It's not unusual for someone to start a business and sell it 10 years later for several million dollars. (BTW: The most common business that makes one a millionaire (as of the several years ago, may have changed) is dry cleaning.)
Being financially independent requires roughly $1 million in assets. If you put that in a long-term equity fund, account 1% for management fees and maybe 2.5% for inflation, then you can retire and pull out $50,000 a year for the rest of your life.
Different people have different needs (family, kids, lifestyle), and different levels of economic risk (I'll need $2 million, just to be safe), but that's the basic formula: Figure out how much you need for a comfortable lifestyle, figure out how much you need in the bank to supply that lifestyle, start a business and build up equity until you get that much, then retire.
More info: 80% of first businesses fail, but only 40% of *second* businesses fail, and the percentage goes down fast after that. Having business experience is apparently a strong predictor of future success.
(*) Other categories are: Inheriting it (3/4 of the buillionaires), marrying it, *other* (really rare things like winning the lottery or finding an unknown Botticelli in the attic), and so on.