It’s a curious problem: You worked your way through the corporate maze, amassing experience, expertise and praise to the point that one day, the confidence swelled inside you and you realized, I could do this better on my own. So you ventured out into the world as an IT contractor, a scary proposition, the lack of a safety net and all. But you found your first clients quickly. Rather, they somehow found you. And your instinct was right; you could do this better on your own. Some of those very satisfied customers referred you to friends’ companies and opened up inside tracks to a few open contracts. The pieces are falling into place so easily, much easier than you ever had a right to expect. Yet, you have no idea just how well you’re doing. Your attention was honed on building your business, so much so that you never paused to consider what you were building it toward
Because of the nature of the work, IT consultants and contractors are especially prone to isolation from their industry, much like a Michelin-star chef. Gastros and peers may be in awe of her ability, reservations a logjam for the foreseeable future, but her world, for all practical purposes, is contained to that kitchen. Success, to her, is measured by perfect execution and a depleted inventory at the end of the night. Not to imply that they’re insignificant, because they by no means are, but they are shortsighted. By not knowing her audience or her peers (friendly and otherwise), she’s missing opportunities to capitalize. And, worse, she could also be blindsided by inevitable shifts in taste.
What Is Benchmarking?
All of this is to say, it’s critical to know where you stand. It was a blind spot that we began noticing soon after our start, over 25 years ago, as we nurtured a client base largely comprised of small businesses, a large share of which became IT contractors and consultants as tech took over our lives. In response, we developed a process we call Benchmarking. Basically, we take a snapshot of a your particular segment of the industry to establish revenue and expense baselines. From there, we can tell you where you fall and even if this surge in business is a result of your practices or a budding need in the region. In other words, is it sustainable?
Where accounting advice can feel like a one-size-fits-all template, as accountants for IT contractors, we’ve learned to anticipate your particular needs and craft relevant, nuanced strategies for filling them, because the trickiest part about knowing where you stand is that the ground’s always shifting.
Author: CA4IT has 30 years of experience supporting IT professionals, independent professionals and project managers