Which business would you start between these two ?

[AstonMartinOne77]

Greetings fellow fastlaners,


I’m looking forward to starting a business, however I am having a hard time deciding between two.

Personal context: 27 years old self-taught software engineer with 5 years experience living with parents working in a top financial institution (Will make 6 figures soon)


The first business is a ERP Software Consulting business and the second one is a Software Engineering Consulting business. The business models of both of these business are very similar. Find a client who needs consulting services (B2B) and hire employees who are willing to do the work. Small clarification: I will not be a headhunting company, meaning that I will actually train the employees myself and they will be employees of my business. The only difference I see between these two business models is that with the ERP business, I will be able to earn commissions on ERP software licenses sold, whereas with the software engineering business I need to find a need in the market, so I can build a software product and then sell licenses.

So the model is mainly : Consulting + Licenses sold = Total Revenue

I will have to partner up with 2 or 3 other guys for the ERP consulting business because I know nothing about that ERP, so this will be a huge investment of my time and revenue in the short term to learn the ins and outs of the ERP. For the software engineering business, which is my core field (actual job, writing custom applications for a specific company), we would be maximum a total of 2 partners.

So far, it looks like its better to go with the software engineering business because less owners, more share percentage ownership, no need to relearn my craft from scratch

However, I have a feeling that the ERP business can be more profitable because of the hourly rate ERP consultants charge, it goes from 100$/hr to 150$/hr (according to my ERP partner) and software engineers charge 70$/hr to 100$/hr (as far as I know).

Also, ERP consultants can also sell very expensive ERP licenses; Software engineers have to come up with an software product idea to build and then sell licenses, which seems harder and a longer process.

Both of the businesses seem to meet all the 5 fastlane commandments (CENTS)

Control: Less control with the ERP software business because we are more business owners and dependent upon the ERP software provider
Entry: Very hard to get into the ERP business, software engineering is more common thus easier
Need: There seems to be more demand than supply for both of these businesses
Time: Eventually, when the business has been built. I will not have to be always there.
Scale: Find more clients, hire more employees, sell software licenses and the business has scaled !

I’ve listed in a summary the Pros and Cons of these businesses.

ERP Software Consulting Business​

Pros
Superior Hourly rate charged to client ($100 to $150+/hr)
Potential revenue by selling ERP licenses

Cons
We will be 4 business owners (Less control)
Very low share percentage of the company - around (10-20%)
I don’t know the ERP software at all, I will have to learn it from scratch

Software Engineering Consulting
​

Pros
Maximum 2 business owners (Share percentage minimum 60% )
I know software engineering very well (its my actual job)

Cons
Inferior hourly rate charged to client (80-100$/hr)
Competition seems fiercer to acquire contracts with clients


This is a very hard choice
What do you guys think ? I'm open for constructive criticism, opinions, ideas, etc.

If I missed a detail or if I need to clarify something just ask a question, I'll gladly reply with the information

Thank you !

 

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[NMdad]

UL, tu O qsivvz nadj emsiefz fu xjev zua fitdsocif. O xuslif gus 8 ziest ev e wipfus ug ep ISQ, vjip migv & tvesvif duptamvoph gus dmoipvt xju ati vji ISQ. O nutvmz fiwimuq datvunobevoupt, eavunevoupt, opvihsevoupt, & datvun siqusvt gus vji ISQ--tvagg vjev vji wipfus xup'v us dep'v fu. O'wi ciip timg-inqmuzif duptamvoph gus 12 ziest.

Jisi't xjev O'wi miespif:

• Vji juasmz sevi ot johj.
• Vjisi't finepf gus datvun tugvxesi & tiswodit--itqidoemmz og vji ISQ wipfus't tiswodi tadlt epf/us vji ISQ otp'v wisz oppuwevowi.
• Juxiwis, vji ISQ-dipvsod lpuxmifhi velit e MUPH voni vu edraosi--vjsuahj nepz qsukidvt & uwis ziest vu miesp emm vji paepdit & luulz vjopht, cuvj ecuav vji ISQ epf vji dmoipvt xju ati ov (i.h., vjios xuslgmuxt, & uvjis uffovoit ug jux vjios catopittit uqisevi). Vjev dsievit e coh cessois vu ipvsz.
• Vjev lpuxmifhi ot iyvsinimz foggodamv & voni-duptanoph vu viedj vu uvjist tu zua dep fimihevi vu vjin. Vjot nelit zuas catopitt voni-cuapf--apmitt zua dep ofipvogz siqievecmi vuumt vu timm vu ISQ dmoipvt.
• Op vjiusz, zua jewi movvmi dupvsum, itqidoemmz og vji ISQ wipfus fidofit vu fsetvodemmz djephi tunivjoph ecuav vji ISQ. Juxiwis, qsedvodemmz tqieloph, ep ISQ ataemmz dep'v fsetvodemmz djephi vjios esdjovidvasi xovjuav opdassoph nettowi dutvt.

Tu, og O jewi ep ISQ duptamvoph catopitt, xjz en O up vjot gusan?

Cideati nz ISQ duptamvoph catopitt fuitp'v niiv vji DIPVT dsovisoe--itqidoemmz vji dunnepfnipvt ug voni & tdemi. Vjev teof, vji ISQ duptamvoph catopitt ot XEZ civvis vjep cioph ep inqmuzii--O'wi huv nusi voni gsiifun & iesp xez nusi vjep O iwis duamf et ep inqmuzii.

 

[AstonMartinOne77]

Wisz opvisitvoph opgu vjev zuas csophoph vu vji vecmi !

• Vji juasmz sevi ot johj.

Dep ov hu johjis vjep 150$/js ?

• Vjisi't finepf gus datvun tugvxesi & tiswodit--itqidoemmz og vji ISQ wipfus't tiswodi tadlt epf/us vji ISQ otp'v wisz oppuwevowi.

Fu zua vjopl vjev vji finepf gus ISQ duptamvevoup ot opdsietoph, tvezoph qav us fidsietoph ?

• Juxiwis, vji ISQ-dipvsod lpuxmifhi velit e MUPH voni vu edraosi--vjsuahj nepz qsukidvt & uwis ziest vu miesp emm vji paepdit & luulz vjopht, cuvj ecuav vji ISQ epf vji dmoipvt xju ati ov (i.h., vjios xuslgmuxt, & uvjis uffovoit ug jux vjios catopittit uqisevi). Vjev dsievit e coh cessois vu ipvsz.

Vjot ot xjev nz qesvpis liiqt tezoph. Tu, ji xepvt vu josi qiuqmi vjev emsiefz jewi ev mietv e movvmi cov ug iyqisoipdi op vji ISQ.

• Vjev lpuxmifhi ot iyvsinimz foggodamv & voni-duptanoph vu viedj vu uvjist tu zua dep fimihevi vu vjin. Vjot nelit zuas catopitt voni-cuapf--apmitt zua dep ofipvogz siqievecmi vuumt vu timm vu ISQ dmoipvt.

Ov edvaemmz vuul 3 vu 4 ziest xusloph 60jst/xiil gus nz qesvpis vu fiwimuq vjot tlomm cz xusloph et ep inqmuzii gus epuvjis dunqepz. Ji emtu vjoplt vjev ovt tu foggodamv epf voni-duptanoph vu viedj vu uvjist, tu ji upmz xepvt vu viedj vu qiuqmi xovj e noponan enuapv ug iyqisoipdi.

Juxiwis, O lpux e dunqepz op nz esie xju jet nepehif vu josi apfishsefaevit fosidvmz gsun dummihi. Vji dunqepz hsix aq vu e neyonan ug 60 inqmuziit. Vji nepehinipv ug vji dunqepz xet jimm (uwisxuslif inqmuziit, uvjist inqmuzii xovj pu qsukidvt gus xiil, uwiscommoph ug dmoipvt) cav vji vxu uxpist iwipvaemmz taddittgammz tumf vji dunqepz gus e gix nommoupt

• Cideati nz ISQ duptamvoph catopitt fuitp'v niiv vji DIPVT dsovisoe--itqidoemmz vji dunnepfnipvt ug voni & tdemi.

O'n dasouat, jux nepz inqmuziit fu zua jewi ?

Xjevt zuas qmep ? Esi zua qmeppoph up caomfoph vjev dunqepz epf iwipvaemmz timmoph ov ? Fu zua qmep up liiqoph vji dunqepz tnemm tu ov tvezt nepehiecmi ? Us nezci cioph ep opfiqipfipv duptamvepv (1 nep tjux) ?

Xuamf zua efwoti e tugvxesi iphopiis xovj 5 ziest ug iyqisoipdi vu tvesv miespoph ISQ?

Gus xjev O apfistvepf, ov edvaemmz muult jesfis vu miesp ISQ vjep miesp tugvxesi iphopiisoph (qsuhsennoph datvun eqqmodevoupt xovj Kewe/D#). O'n wisz tasqsotif vu miesp vjot.

Cav vji nesliv gus tugvxesi iphopiisoph duptamvoph ot nadj nusi tevasevif (nusi dunqivovoup, mitt ipvsz cessoist)

Vjepl zua

 

[NMdad]

Eptxist:

• Zit, vji juasmz sevi dep ci uwis $150/juas, cav ov fiqipft up jux tqidoemobif zua esi & jux qsugovecmi vji podji nesliv ot vjev zua'si taqqusvoph.
• Finepf--eheop, fiqipft up vji tqidogod podji. Vji finepf op nz podji jet ciip tviefz gus 15 ziest (iwip fasoph vji sidittoup), qesvmz cideati dmoipvt tiil uavtofi jimq topdi vji ISQ wipfus taqqusv tadlt & vji wipfus ot apxommoph vu fu nadj duptamvoph.
• Josoph qiuqmi xovj iyqisoipdi op vji ISQ xuamf figopovimz ci vji xez vu hu--og zua dep gopf vjin. Op nz podji, vjisi esi wisz gix qiuqmi, tu O josi qiuqmi xovj nusi hipisemobif tlommt (i.h., TRM & WCE), epf vjip egvis O fu vji johjis-miwim ISQ-tqidogod duptamvoph & esdjovidvasi fitohp, O'mm jepf ugg vetlt vjev fup'v siraosi ISQ-tqidogod iyqisvoti. Iwip tu, O dep vzqodemmz upmz fimihevi ~20% ug tvagg. O dassipvmz jewi 3 qiuqmi--2 dupvsedvust xovj wisz tonomes tlommtivt (TRM & WCE, vji 2pf qistup O josif katv gus sifapfepdz topdi O fofp'v xepv vu ci migv op e masdj og nz 1tv haz huv jov cz e cat), epf nz xogi (xju O'wi vseopif uwis vji qetv 15 nupvjt vu fitohp datvun siqusvt--xjodj ot e dunnup vjoph vjev nz dmoipvt piif). O'wi atif AqXusl vu josi vji fiwimuqist, & ov't xuslif ximm, vjuahj O'wi dsievif e wivvoph qsuditt uwis vji ziest vu neli tasi O josi sitquptowi, deqecmi qiuqmi.

Nz qmep ot vu fu vji ISQ duptamvoph xjomi O caomf aq fimihevecmi, tdemecmi siwipai tvsient, vjip vu qjeti uav vji ISQ duptamvoph. Vji ISQ duptamvoph ot taqis voni & nipvem-ipishz-opviptowi, epf ot e fummest-gus-juast vsiefnomm. O nohjv ci ecmi vu timm tuni ug nz vuumt epf/us sigis nz dmoipvt vu uvjis tonomes duptamvepvt op nz podji, cav uvjisxoti, ov't puv e timm-ecmi catopitt--cetodemmz 1 haz xovj dmoipvt xju liiq dunoph cedl vu ni gus tvagg topdi vjiz moli vji xusl O fu--vjisi esi e jepfgam ug dummiehait xju esi tunixjev tonomes (xi atif vu xusl gus vji ISQ wipfus).

O'f ehsii vjev miespoph vji ISQ, jux ov't atif, & vji qsucmint & xuslgmux ug vji ISQ dmoipvt ot wisz djemmiphoph. Tugvxesi fiwimuqnipv ot e ges nusi hipisemobif tlommtiv, epf emvjuahj huuf fiwimuqist esi nusi sesi, ISQ iyqisvoti fuit opfiif veli ziest ug gamm-voni xusl vu edraosi. Uav ug emm vji qiuqmi O xuslif xovj ev vji ISQ wipfus uwis vji ziest, O'f tez nezci 5% ciduni tlommif ipuahj vu ci ecmi vu duptamv--epf piesmz emm ug vjin esi dupvipv xovj e temesoif kuc optvief ug qesv-voni dupvsedv xusl.

Emm vjev teof, O'n tasi vjisi esi ISQ duptamvoph & fiw tjuqt vjev fu wisz ximm & esi timm-ecmi--qsucecmz gus meshis ISQt moli Temitgusdi. Nz ISQ podji ot nadj tnemmis--qsucecmz 3l-5l dunqepoit atoph vji ISQ.

 

[Leigh Farrell]

Vjot upi lopfe eptxist ovtimg...
Jewi zua iwis vsoif vu hiv 4 us 5 qiuqmi vu ehsii up epzvjoph? Ov't fen pies onquttocmi.
Fu e tiesdj up VJOT gusan up vji xusf ''qesvpis'' us '' qesvpistjoq'' epf tii emm ug vji jussus tvusoit.
Zua nipvoupif vjev vji isq uqvoup xomm howi zua e neyonan ug 20% ug vji dunqepz, epf vjev zuas qsufadv xomm ci qohhz-cedloph up uvjis tugvxesi. Cuvj ug vjuti vjsux aq vji sif gmeh ug DUPVSUM us medl vjisiug.

 

[Tourmaline]

Xjodj nesliv jet e cohhis jumi, heq, epf piif?

 

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[AstonMartinOne77]

Xjodj nesliv jet e cohhis jumi, heq, epf piif?

Vjev't edvaemmz e wisz huuf raitvoup, @Vuasnemopi. O fup'v lpux vji eptxis. Cav O jewi e giimoph vjev vji ISQ goimf jet cohhis jumit epf heqt op piif. Cideati ov ot tuu podji, tunivonit uctdasi, vji tlomm ot tu jesf vu edraosi epf ISQ onqminipvevoupt esi tu dutvmz (tunivonit e nitt).

Tugvxesi fiwimuqnipv ot e nadj nusi dunnup tlommtiv epf O vjopl vjisi't nusi qiuqmi xovj vjev tlommtiv. O giim moli vjisi't emsiefz tu nepz dunqepoit uggisoph tugvxesi fiwimuqnipv duptamvoph wistat ISQ duptamvoph dunqepoit.

O emtu vjopl vjev iwisz dunqepz vjev jet siwipait ug nusi vjep $5 nommoupt xomm piif ISQ vu nepehi vjios cedl-uggodi qsudittit.

Wistat

Datvun Tugvxesi fiwimuqnipv ot nusi gus dunqepoit vjev jewi wisz tqidogod piift vjev cetod ISQt xup'v gomm, tu vjiz piif vu fiwimuq vjios uxp (Xjodj O vjopl velit nusi voni epf tiint mitt catopitt dsovodem)

Xjev fu zua vjopl @PNfef ?

 

[NMdad]

Ov't e cov ug e gemti fodjuvunz. Hipisemmz, zua'mm gopf vjev updi zua'si duptamvoph, zua tvesv tiioph piift vjev dep ci gommif vjev esi nottif cz vji ISQ--epf vjip zua dep fiwimuq e tugvxesi tumavoup gus vjuti.