Starting IT Consulting firm in US - 2008 : Is this a right thought?

As my career started and all through my regular job I am in IT consulting, no wonder that I would have thought about setting up an IT consulting firm. This is how it started first tried to start with web development stuff trying to be a freelancing firm by hiring web developers but as the margins are too low it really didn't hit my interest and moreover it is almost unimaginable compete with the offshore pricing overseas. Then started searching private clients but being in this domain I already know that if you were a Bigger firm you would have either outsourced the 50% of the work to offshore or even have the offshore it to the local firms who has all S/W process, security, ISO certification ..and not to work the SOX and SAS70. The client have numerous options for outsourcing and can always get the best price even after going with BIG consulting firms. Then talking about mid-size firms there is little scope but again you have to compete with the pricing of offshore firms, as cost cutting for mid-size firms is a major criteria. The only thing left is Startups and as being a truth as startup would never hire a consulting firm for their IT needs and even if they need they would use the freelancers.

So the only scope left in here was, the Government contracts. There is 100% of the scope to hit the Govt. sector. Nonetheless, the process and procedures to get onto any Govt. contract is not that simple as it sounds. Off course you have your competitors hitting the same target and you need to prove yourself better having NO experience. The Govt. contract awards are based on evaluation, measuring attributes like, Yrs of experience, Current client references, Current process, over solution, current revenue. Well putting your self in to this criteria and comparing against your competitors would obvious not qualify you as a top listed vendor. So, still the question, HOW? is not answered. One good scope to get in to these contracts is being a HUB. Most of the States in US encourage HUB to participate in these bids as it is a part of the Govt. pre-defined policy. I saw many firms getting fortunate being a HUB to get into these contracts.

But you are not a HUB, THEN WHAT?

Well, the solution is as simple as that. INNOVATE.

In my preliminary investigation, I came across few firms like Perficient, SEILEVEL and some other list firms which are very unique in their process and delivery model. SEILEVEL has gone back to fix the basic of S/W Engineering which targets the requirements analysis which is THE MOST IMPORTANT part of the whole S/W cycle. And there are many more startups who are successful by adopting an innovative core business process to compete with the market.

There are even new set of IT services firms whose target market to provide some new web trends like social networking, social media, blogs, forums and name it you will find a firm providing that service.

Bottom line, It is never a bad idea to provide a service, but one needs to innovate to an extent where they can out perform their competitors and the only weapon is INNOVATION.