I'm planning to make a private GIS service providing firm in the coming years. I just wanted to know what skills and resources are required to set up such a firm? I'm aware that the software, hardware and data collecting equipment would cost me. Can you give me some idea of the things i will be needing? For you information, i am a Geography hons student, and presently doing a diploma course in Geo-Informatics. I also have some knowledge in programming.
I love your enthusiasm and running your own GIS Consultancy can be very rewarding.
I worked my way up to running a commercial GIS Unit for a very large environmental research and consultancy service, plus lead GIS teams in other organisations before going freelance. This experience gave me a very good idea of what running a business would involve, who my clients would be, what they would be prepared to pay and who the competition is. Above all though, it let me hone my skills which is important because commercial GIS is not as neat as structured training exercises when a student. In no way would I want to dull your enthusiasm or belittle your skills. However, I do recommend some patience especially if you are fresh out of college.
Before you hire a team of people, rent offices, buy servers and commission company logos and stationery, I recommend you start working as a solo freelancer, especially if you have not worked as a commercial GIS practitioner before. This will do several things. First it will teach you more about business than any course can. I have personally found a big difference between the practicalities of day-to-day business and what you get told in a classroom. Secondly, it will start an income stream for you and that will prove both to you and a bank that you have got what it takes to grow your firm. They have seen countless impressive-looking business plans but they need proof that YOU can make it work. Thirdly, you start building a list of clients, contacts and a reputation all of which are crucial not only to help convince a bank to lend you money for everything a large firm will need but also to be sufficiently attractive to skilled people you will need to work for you. If you want people to work for you, they need to know that you are worth working for.
Here are some random business thoughts I rely on:
- Question everything
- Do not get mesmerised by turn-over. Companies boast about their turn-over but it is better to be running a small business turning-over £50k per year where 90% of that is profit than run a business with a turn-over of £1 million where you are making an annual loss of £100,000. It sounds obvious but so many people (even ones with MBAs) fall for the shiny glitz of a massive turn-over.
- Cash flow is king (aka "a bird in the hand is worth two in the bush"). Companies that have massive profits on paper can and do go bust because they have no cash flow.
- YAGNI - this is an adage from "agile programming" meaning "You Ain't Gonna Need It". Develop only what you need to do a task and don't build in extra functionality just in case. Allow for expansion and develop in such a way that you can add extra functionality for sure but doing any more than what is required wastes time, effort and money which could all be invested in something else (like getting the job done on time to the client specifications). This advice holds true for running a business and hence my comment about not rushing out to buy everything for your firm on day one.
- If you are in the UK join the Federation of Small Businesses. If not, then find a similar business federation where you are ('small' means up to 250 members of staff and unless you are going to run a digitizing sweat-shop in India or China, my guess is that includes you). Many business people are honourable but many are not and you may need a little back-up. The FSB also give advice on all aspects of business.
- Get Professional Indemnity Insurance. Not only do we live in litigious times but many companies won't give you work without it.
- The phone won't ring by itself - you need to do some leg work to market yourself.
- Just being cheaper is not the best selling point and can even put people off. There are a lot of GIS consultancies out there and big companies, Local Authorities, Government Agencies increasingly have skilled GIS people on the staff already. Find your niche.
- Network. It spreads your name but also combinations of small specialist consultancies working together can have a synergy which allows them to tackle larger projects or win work they could not have got alone. Trade fairs, previous employers, clients from previous work situations, friends and classmates - they are all potential clients and all can help spread the news about your availability.
- Be quick to respond to clients.
- Don't be too proud to do small jobs. A thousand clients who each pay you only £100 each per year can be better than 1 client you pays you £100,000 per year because if you loose one or two, it doesn't matter as much. But keep always keep your regulars happiest above all!
- The biblical story of Joseph interpreting Pharaoh's dream is instructive. Be prepared for feast and famine.
- Don't just talk about it, do it! Prove to yourself, the banks and everybody around you that you can run a GIS Consultancy. All you need to start is a half-way decent PC, a back-up drive and some free software from OsGeo. You barely need to spend anything other than a little on web hosting. There is nothing like getting the payment on your first invoice as a freelance consultant to build confidence and enthusiasm. You can go to classes on book-keeping, corporation tax, marketing or what ever you need while you are making money and starting to demonstrate that you can run a profitable business. If you can't earn enough solo, you certainly can't earn enough to also pay the mortgages of all the staff plus the office rent of a firm!
Things that comes to mind from an IT perspective are: hardware, servers (OS/Database), backup, offsite data storage, business continuity plan in the event of power outage/emergency (UPS power supply), do you want staff to work remotely (VPN), licensing, local laws around running a business, building lease...the list goes on.
It all depends on what you will be offering, the amount of work you accept/expect to have, how many staff, etc.
If you plan to start as self employed these are still things you need to consider. It gets increasingly more complex as you grow your business. Then you have to think of the update cycle of all your hardware/software/OS's.
My advice is take a small business course and create a business plan. The business plan will be your 'road map' so to speak. Lenders will not give you money without a solid business plan anyway.