Solution Providers See Cause For Concern, Hope In Economic Crisis

Solution providers harbor concerns over the current economic outlook and its looming impact on their businesses, but many are finding hope in the strength of the SMB market.

Some solution providers attending the CRN Fast Growth 100 Executive Summit in Chicago on Wednesday said they have had customers delay or cancel projects over the last month because of the economic downturn.

Others said they aren't seeing a dip in business yet, but fear what's to come.

"At the end of the year, typically we would see a surge in the fourth quarter because people have budgets to spend. Now we're seeing that people are going to hold it over to next year, so we might not see that surge," said Phil Tom, business development manager for the special systems division of Continental Electrical Construction, a cabling, telephony and audio/visual solution provider in Skokie, Ill.

However, some solution providers pointed to small and midsize businesses as a bright spot on the economic horizon.

"A lot of small businesses are not as dumb as the guys on Wall Street. Maybe it's because they're closer to their businesses, but they've been tightening their belts and are still tightening," said Bob Hood, president and owner of Chicago-based Hood Consulting Group. Hood cited one manufacturing customer that has seen profits increase 27 percent this year even as sales dropped 21 percent because of streamlining that customer began implementing in January.

Solution providers said they are taking steps to minimize the impact of the economic slump on their bottom lines.

"I'm leveraging partnerships, working with vendors more closely as well as other small businesses," said Raymond Hall, principal consultant with Raymond V. Hall Training and Consulting Services, Chicago.

Solution providers also said it is now crucial to maintain good relationships with existing clients.

"You really want to over-communicate with the customers you have. Find an excuse to go have lunch or go have coffee ... You also should make yourself known not just to your contact but across the business," said Terrence Donohoe, president of R.M.I., a Chicago solution provider. "Now's the time to use what you've already invested in," he added.

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