Now May Be The Best Time In A Decade To Become A Solution Provider

There is no doubt that starting any small business is a commitment and a risk. We have all heard the government statistics on how many small businesses fail each year. But you also have to remember that there are more than 5 million successful small businesses in the United States, and more than 25 million if you include sole proprietors.

Fifty percent of all employees in America work for a small business, and 40 percent of all jobs in high technology are within a small company.

So, why do I believe it is a great time to become an independent solution provider?

First and foremost, we are coming out of an economic downturn during which virtually every potential customer cut back on IT staff. Now, granted, those customers also cut back on IT spending. But how do you think they are going to approach the inevitable increase in spending on information technology? I believe they will choose to invest in contractors and outsourcing rather than hire additional employees. This will be especially true in the early stages of the recovery when no one will want to add staff unless it is absolutely necessary. The fundamental approach to IT has been changed during this downturn, and many companies will never want to build their IT staffs to match previous levels.

Another reason I believe this is a good time to become an independent VAR is because labor costs are at historic lows. Those highly trained IT staffers that were let go during all the downsizing are amenable to salaries that are much lower than what they commanded before the downturn. So adding staff is more cost-effective today than it used to be. In fact, you may actually have a cost advantage over your competitors that retained staff and maintained a higher cost structure.

'There is no doubt that starting any small business is a commitment and a risk. But also remember there are more than 5 million successful small businesses in the United States, more than 25 million if you count sole proprietors.'

There are other reasons I believe it is an opportune time for solution provider entrepreneurs.

Real estate is always an issue for a business. Well, here again, the downturn is working in your favor. We haven't had an abundance of potential office space at attractive rates like this in many years.

This is especially true in the largest markets in the country where there is the greatest number of potential customers. Drive through any industrial park or downtown area in this country today and you will see more "for lease" signs than at any other time in the past 10 years. And you have all the leverage in negotiating a lease when the owner knows you can walk across the street to another empty building if need be.

The barrier to entry is less now for other reasons as well. There no longer are the inventory costs there were 10 years ago. Today's distributors do all the heavy lifting in that arena.

Distributors today also provide services such as billing, credit and lease arrangements, which allows you to focus on the two most important things,selling to and servicing customers.

Becoming an entrepreneur is never an easy thing, but these are all very positive scenarios. Also take into account the fact that the IT infrastructure currently in place is getting old and will need to be replaced. Roll all these facts up with the likelihood that we will see increased spending on IT products and services as the economy steadily improves, and you'll see this just may be the best time in more than a decade to take the plunge.

Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].