With A Handshake

The idea behind the program is to get owners and solution provider management teams thinking more strategically about decisions they make in the course of day-to-day business, over both the short term and long term. I went to get a sense of how CRN can better cover some of the things—such as selecting a technology vendor partner—that affect those decisions.

One question asked on the very first day particularly intrigued me because it addresses a very fundamental challenge all of you will face over the next 12 to 18 months. Simply put, one attendee asked how sales contracts should be valued if you're preparing your company for an eventual sale. Based on that question, and the accompanying chatter that circled around the room, I learned something big that day: Apparently, many solution providers focused on small businesses dispense with contracts at least some of the time in favor of the handshake deal.

My husband, who is in the home-renovation business, handles a lot of his repeat clients this way—although it gives him agita on the bigger jobs.

So, I guess I understand why you'd do this from a relationship standpoint. It's the way of small businesses. But in the managed services world, your contracts could make or break you, so you'll need to rethink this policy.

Terrence Chalk, founder, chairman and CEO of Compulinx Managed Services, an MSP in White Plains, N.Y., says the shape of his contracts is in constant evolution, accounting for all sorts of things, such as setup fees, the length of time it takes to hire a good engineer, and—this is a big one—the customer's responsibility to maintain business-class broadband service. Over time, Chalk has adapted those contracts to bill on a quarterly basis vs. monthly because of the way deactivation is handled if an account defaults.

But the point is, he leaves little to chance, which is a practice you'll also have to embrace to make it in the MSP world.

Trust and discipline can coexist. Send your comments to HEATHER CLANCY, Editor at CRN , at [email protected].