How to Become an IT Consultant: Essential Steps and Guide
Enthusiasm for technical solutions, the ability to relate to people, and providing them with solutions to their problems are key qualities of a successful IT consultant. Your clients and teams will change with each project, as well as the tasks you undertake. A specialized approach is often beneficial in this field. For example, network specialists may not be suited for SAP, while others may focus on integrating cloud solutions. However, a holistic approach is always valuable, particularly when addressing a company’s underlying IT architecture.
Our Advice: IT Liability
Negligence, misinformation, or poor planning can lead to substantial claims that might cause your company to face insolvency. To protect yourself, consider cyber liability insurance. Typical risks covered by cyber liability insurance include:
- Programming errors
- Missed deadlines
- Copyright infringement
- Loss of customer data
Ensure your protection with IT liability insurance now!
Step 1: Becoming an IT Consultant – Key Skills and Qualifications
As an IT consultant, knowledge of IT and business administration is essential. You will advise companies on their business processes, so understanding these processes is crucial. Many IT consultants work directly within companies, so it’s important to understand why you may choose to be self-employed.
Your expertise should extend beyond technical areas, such as SAP development, to understanding the business processes it supports. Here’s what you should consider as you prepare for a career as an IT consultant:
- Corporate information technology
- Informatics
- Engineering (with business administration knowledge preferred)
Certifications as a Quality Sign
The title “IT Consultant” is not a protected profession. Therefore, it is important to showcase your expertise through certifications. For instance, if you plan to work with SAP, you should have advanced training and courses that demonstrate your capabilities.
Experience in Companies
Whether you’re a recent graduate or transitioning careers, companies will evaluate your experience and references. To ensure your CV stands out, it’s crucial to gain practical experience through internships or working student positions.
Specializations – Investment in the Future
Specializing in areas such as data science or data engineering can help you establish yourself in the market. Data scientists analyze data to provide actionable insights for management, while data engineers collect and manage business-relevant data. Many of these master classes are available without prior study and can even be pursued remotely.
How Much Does an IT Consultant Earn?
The earning potential for IT consultants is high due to the high demand for IT expertise. Your salary will depend on your qualifications, experience, and the companies you work with. Below is a breakdown of typical annual salaries:
- Junior IT consultant: From $40,000 to $60,000
- Experienced IT consultant: From $60,000 to $98,000
- Senior IT consultant: From $74,000 to $105,000
Freelance IT consultants charge between $90 and $100 per hour, depending on their area of focus.
If you want to negotiate the best compensation, consider these six golden rules for freelance negotiations.
Step 2: Getting Started as an IT Consultant
As an IT consultant, you are considered to be a freelancer. While this role is not explicitly listed in the official catalog of freelancers, you can achieve freelancer status by meeting two essential criteria:
- You must have qualifications in a scientific, technical field or a practical engineering role.
- You must provide your services independently and not engage in any other commercial activities.
Once these requirements are met, you can apply to the tax office to confirm your freelance status. Failing to register your status early can lead to significant tax liabilities later.
Registering as a Freelancer
Register as a freelancer with your local tax office either in writing or electronically through the ELSTER portal. Once registered, you will receive a tax ID, and the tax office will confirm your freelance status.
Step 3: Essential Formalities and Protections for IT Consultants
As an IT consultant, the main formalities include registering with the tax office, clarifying your freelance status, and deciding how you will organize your business (as a company, sole proprietorship, or freelancer). Other considerations include:
- Choosing the right business structure
- Ensuring appropriate insurance coverage
- Managing accounting, taxes, and invoicing
The Right Business Structure for IT Consultants
Choosing the right business structure is vital for your success. It will depend on your business plan and whether you will offer services or produce and sell products. For freelancers focusing solely on consulting, registering a business may not be necessary.
IT Liability Insurance
Minimizing risk is crucial as an IT consultant. Professional liability insurance tailored for IT professionals protects you in case of damages caused by your work. Cyber liability insurance also covers property damage, personal injury, and consequential damages.
Personalized Insurance Coverage
Use tools like the Hiscox premium calculator to determine your exact insurance needs and only pay for the coverage you require.
Disability Insurance
As a self-employed professional, disability insurance is mandatory. It ensures you have the necessary financial support in case you are unable to work due to illness or injury.
Other Important Commercial Insurances for IT Freelancers
- Professional and corporate liability insurance
- Cyber risk coverage
- Data insurance
The Right Business Account for IT Consultants
It’s advisable to open a separate corporate account to simplify bookkeeping and tax filing. You can find details on suitable accounts in our 2023 business account comparison for founders and startups.
Invoicing as an IT Consultant
As a freelancer, issuing invoices is a fundamental part of your business. To streamline the process, use an efficient invoicing program like SevDesk, Lexoffice, or Zervant. Proper invoicing ensures you get paid promptly and efficiently.
Step 4: Marketing and Acquiring Clients
To find clients, start by defining your unique selling proposition (USP). What sets you apart from competitors? Create a consistent and professional presence on platforms like LinkedIn and Xing.
Networking events and business cards still hold value, especially when meeting with clients or in large meetings. Design a logo or unique business card through platforms like 99Designs or Moo.
Build Your Website
A personal website is essential for showcasing your services. Platforms like Wix or WordPress offer ready-to-use templates for creating a professional website quickly. Check out the best website kits for 2023 for more options.
Freelance Platforms and Job Portals
Registering on freelance platforms like Freelancer Map, Fiverr, and UpWork can help you find projects and clients. These portals, along with social networks like LinkedIn, are great for expanding your reach and acquiring clients.
For more detailed information, check our overview of the best freelance job portals in 2023.