Need your suggestions regarding SEO business

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techtata

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Hi Friends,
I have a group of friends who have just finished their BCA (Bachelor of Computer Application) around 6 months ago. They want to start a small company specialising in providing SEO services only. They want do not wish to get into web design business as many freelancers or recent graduates do. They have asked me to do some reasearch on this type of business, I know very little about any type of software business as it is not my field or work, but being a member of the same group of friends and also being elder to them, I have said yes. But now I am really confused.
1. As per my online research, there are many things such as SMO (Social media optimization), OIM (Online identity management), and PPC (Pay per click) apart from the simple SEO. How does one do all these as well?
2. I also came across a few online forums dedicated to SEO. The below forum has a list of some free SEO tools. I wonder if these tools are industry standards when it comes to doing SEO related services. They all are supposed to be free, but are there any more that are any other propritary ones that are absolutley necessary?
http://tools.seochat.com/
3. Is it possible to do SEO business just using free tools, virtually investing zero in software infrastructure?
4. There are companies who specialize in SEO for example the one listed below, which offer different SEO packages. But I am completely clueless as to how to decide the rates per month/year.
http://www.ebrandz.in/seo-packages.html
5. I have been also invited by this group of friends to invest in this SEO venture. I am a little tempted to say the least. But please provide me your expert suggestions on this proposed venture.
Thanks a lot.
 
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