The push for VARs to move into the MSP market has been going strong now for several years. Many solution providers have made at least a partial transition to the MSP business model. But what about the rest of us? What does the future hold for the VAR who either doesn't want to provide managed services or, by virtue of their clients, isn't in a position to do so? It has been my observation that as the MSPs ply SMBs with the managed services Kool-Aid, a market has opened up in a sector that has never been defined. Let's call them Ultra Small Businesses, and define them as companies with five or less desktops, at least one server and less than 10 employees. This market has been neglected, and is now being served either by technicians working out of their cars or by "my next door neighbor's son, Josh, who's really good with computers."
This market is ready and willing to pay for knowledgeable, honest and fair support. Here are 10 tips for making money in this market:
1. Don't underprice yourself. The client called you because they can't fix the problem!
2. Don't overprice your products. Be willing to take one to two points on hardware so you can pick up the labor on the back end.
3. Utilize vendor programs. Make it your mission in life to get all the MDF, SPIF and back-end money available from vendors. One of the biggest complaints from vendors is that their partners don't take all the money that is offered.
4. Look and act professional. Slacks and logo shirts are a must. If you have multiple technicians, consider having picture ID cards made for them.
5. Leverage the float. If you have clients that pay on delivery and you have net terms with your vendor, consider taking less in profit in order to pick up the float on the deal.
6. Join the local chamber of commerce. Keep your name and face in the public eye and they will remember you when the time comes.
7. Don't advertise in the local football program or on the menu at the diner. This type of advertising is for businesses giving back to the community and will not affect your revenue.
8. Do advertise where you can get the best exposure. In most cases, this will be the local yellow pages. However, with the proliferation of "yellow page" books, you must do your homework to find out who is the premier book in your area.
9. Identify your market. Recognize that you aren't working for Fortune 1000 companies.
10. Standardize your procedures. As in any business, the simplest formula for success is to find out how to make one dollar profit, then replicate that as many times as is necessary.
Duke Burge is the founder and president of DB Computer Solutions In Waxahachie, Texas. What's On Your Mind? Send letters to Jennifer Hagendorf Follett, Assistant News Editor, at jfollett@cmp.com.
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