Congratulations on starting your technology business! You've probably already discovered that when you start a business, you have more responsibilities than you ever imagined.
Running a tech company isn't just about tech — it's about running an organization. That means you need to pay taxes, develop smart workflows, schedule your time, and manage IT risk. Let's look at how most businesses get started.
How Do I Start My Own Tech Business?
Whether you're an independent contractor or a small-business owner, there are some basic steps you must take before accepting clients:
- Choose a name. What's in a name? If you're a contractor or consultant, maybe you'll use your own name. There's no harm in that. But having a strong, unique business name can be an asset down the road. If you want to file for a trademark, you'll need to have a name that other tech companies aren't using. It's never too early to think about building your brand.
- Choose a legal structure. Will your business be a corporation, limited liability company (LLC), or partnership? Or do you want to work as a sole proprietor? These decisions affect your business taxes, so consider consulting with a lawyer or accountant or doing some research to see what makes sense for your finances.
- Choose a domain name and build a website. As an IT professional, you're probably better equipped than most to set up a website. But remember to think ahead: what will your website be five years from now? Do you want to use it to post newsletters, blogs, and other information about security and tech issues? Or will the site simply provide a way for clients to contact you? Having a snappy domain name and developing a web plan you can grow into is a smart move, even in the earliest stages of your business.
- Build a business plan. How do you plan to attract clients? Are you going to freelance via an IT employment agency? Are you going to ask for referrals? Though it's impossible to know the future, make a plan for the first six months of your business, then ask where you see the business in one year and five years. Think about your skillset. Do you need to expand your skills? Are there growing areas of IT that you can take advantage of?
- Perform an IT risk assessment. Figure out what the biggest threats are to your data security and your clients'. Find ways to minimize these risks, including risk mitigation (e.g., developing a security protocol plan and sticking to it) and small business insurance.
What Insurance Do I Need When I Start My Tech Business?
When you start a tech small business, you need a few different technology insurance policies to cover your risks. Additionally, lease agreements and customer contracts often require you to have basic IT business insurance policies, such as:
- A Business Owner's Policy: This is a popular insurance choice for IT businesses. It actually packages two policies together: General Liability and Property Insurance. General Liability is basic liability insurance, covering lawsuits over non-employee slip-and-fall accidents, property damage, and bodily injuries. Property Insurance helps you replace damaged or lost business property. A BOP package offers IT companies a way to get two important policies at a discount.
- Errors & Omissions Insurance: E&O is also called Professional Liability Insurance. It covers lawsuits related to your work, such as those over technology liabilities, errors, malfunctions, data loss, breaches on client computers, and many other IT problems. If a mistake or oversight in your work (or in the software / SaaS you run on a client network) causes a client a financial loss, your insurance covers the cost of a lawsuit, should the client sue you.
- Cyber Liability Insurance (for select IT businesses): This technology policy only makes sense for IT companies that store a large amount of client data on their own networks. That's because Cyber Risk Insurance covers the cost of cyber attacks made against your company, but it doesn't cover attacks on your clients. If your clients are attacked, Errors and Omissions Insurance (not Cyber Liability Insurance) covers your liability, paying for your legal expenses in a data-breach-loss-related lawsuit.
For free insurance quotes on any of these technology insurance policies, submit an online insurance application.