Archive for December, 2011

If You’re a Computer Consultant, It’s Time to Start a Small Business of Your Own

December 25th, 2011

When small businesses are looking for a support solution for maintaining their network and computer systems, they have several options. They can utilize one of their tech-savvy employees to pull double-duty as their in-house tech. They can employ a dedicated in-house network administrator. Or they can outsource the service to an IT Support company, an MSP or to an Independent Computer Consultant.

In today’s market, I believe that the Independent Computer Consultant represents the best possible support model for serving the needs of the small business customer. And I firmly believe that any computer professional with the skill set to maintain a small business network should strongly consider starting a small business of his or her own.

In the early days of outsourced computer support (and to this day for many consultants), the break/fix support model where services were charged for by the hour was standard practice. We wait for the systems to fail, call the computer consultant to come out and fix it, he sends an invoice. Repeat as necessary.

It’s obvious how this support model puts the needs of the computer consultant directly at odds with the needs of the client.

The client typically sees the computer consultant as an unwanted expense. Should the consultant be required to make an office visit to the customer, it’s likely because something is broken, which is costing the customer money… both in lost productivity and for whatever the repair costs might be. Under the hourly-rate service model, it’s understandable why the customer would want to see the computer consultant as little as possible. Of course, this works directly against the needs of the consultant, who’s simply trying to bill enough hours each day to make a sustainable income.

If the hourly support model is a lose-win proposition (the more pain the client experiences, the more money the computer consultant makes), how can we create a business model where everybody wins? For us to do this, let’s take a look at what each member of the relationship is looking for:

The Computer Consultant Wants:

  • To make a consistent, reliable and possibly substantial salary.
  • To have a high level of job security.
  • To be able to learn, work with and be challenged by new technologies.
  • To work with a diverse group of customers and computer systems, keeping the days varied and interesting.
  • To work a reasonable amount of hours and enjoy a balanced work and personal life.

The Client Wants:

  • They want their systems to perform reliably at all times.
  • They want ZERO unexpected downtime.
  • They want problems prevented from occurring wherever possible.
  • They want an immediate response when a problem does occur.
  • They want smaller problems identified early, before they can develop into larger, more costly problems.
  • Their computer consultant should be able to address and fix problems remotely, providing instant gratification and minimizing downtime.
  • They don’t want any surprisingly large invoices (and a large invoice is ALWAYS a surprise).
  • They want up-to-date systems (even if they don’t always appear at first to want to pay for it).
  • They want a consultant who has a deep understanding of their systems and their technology needs.
  • They want to have confidence in their computer consultant’s talents for maintaining their network, supporting their users and to guide them in making good choices for future growth.

When looking at the list of what the customer wants, it’s clear to see what the consultant needs to provide:

Automated System Monitoring
Minimizes or prevents unexpected downtime
Provides for early problem identification
Can provide Asset Management and Inventory reporting

Help Desk
Allows for immediate communication and response to customer requests
Allows for instant remote computer support for end-users and server systems

Personal Attention
Customers want a dedicated consultant who knows their systems. They don’t want a new, dispatched “repair-man” each time a service request is made.

Low Cost
They’re not necessarily looking for the LOWEST rate available. They do however expect a fair and competitive rate.

The MSP (Managed Service Provider) support model is designed to address the above Customer wants by leveraging today’s available technology to support larger numbers of clients while utilizing fewer internal resources.

The support utilities available today that provide remote monitoring, preventative maintenance and remote computer and server support, has become reliable and affordable to the point where they now provide the means for those computer professionals wanting to start a small business to finally enter the market without the need for massive amounts of start up capital.

These inexpensive utilities now help all IT support providers serve their customers more efficiently and for lower, more predictable fees than was ever possible under the hourly support model.

With support becoming easier and cheaper to provide, many well run and well funded companies are emerging and competing for the Small Business Support market. They’re working to establish brand recognition and looking to dominate the market. As regional and even national companies continue to grow and as the current market leaders in providing small business technology products, such as Microsoft, Dell, CDW, etc. enter the small business IT Support market, it can seem inevitable that the Independent Computer Consultant is headed the way of the dinosaur.

I say absolutely NOT!

There is not a single item required by today’s small business customer that YOU, as an Independent Computer Consultant cannot provide reliably and inexpensively.

YOU can monitor your client’s systems, identifying or preventing potential problems.

YOU can minimize downtime by monitoring for system or service alerts.

YOU can increase their productivity and reduce problems by monitoring their asset inventories and tracking the age and performance levels of your customer’s equipment.

YOU can provide your clients with professional, real-time service reports, asset inventories and network performance reporting.

YOU can provide remote computer support to your customer’s end-users INSTANTLY from ANY location where you have an available Internet connection.

YOU can provide your clients with the reliability they want from a dedicated consultant who is intimately familiar with their network, their end-users and their technology needs.

And you can provide ALL of these items with lower overhead than your larger, corporate competitors, which will result in an easier sales process, greater profitability and fantastic growth opportunities for YOU! Because the tools required for providing the necessary proactive system monitoring and remote computer support have become very low-cost or even free, there are no longer any major barriers preventing a qualified computer professional to start a small business and become his or her own boss and supporting a small, but very profitable client base. By providing remote network monitoring and computer support, the Independent Computer Consultant is able to abandon the very ineffective hourly support model and operate on the much more profitable flat-fee, proactive support model. By charging flat rates for service, the consultant is able to calculate in advance the number of customers that will be required to achieve a desired income level. Once the consultant is able to secure an initial client base, there will no longer be any concern for finding enough billable hours in a month necessary for survival.

And because this proactive model for support is designed to reduce and prevent problems, additional time will be available for a motivated small business computer consultant to go out and acquire even more clients to increase the income level and bolster the security of the business.

By following the correct model of flat-fee, proactive monitoring and remote computer support, there has never been a better time for an Independent Computer Consultant to pursue the goal of starting a small computer consulting business and becoming his or her own boss. It is a worthy and rewarding goal to reach for.

Robert Peretson has been both a successful Independent Computer Consultant and has started and run several New York based consulting businesses since 1996. He has created the website SuccessfulComputerConsulting.com to help talented computer consultants quickly and easily start and run their own Independent Computer Consulting business.

Wobbly Banks – What Does This Mean in Your Steps to Starting a Small Business?

December 25th, 2011

The FDIC seems to admit in today’s ABC news story, that there are more banks that really should be shut down, but the FDIC doesn’t want to hurt the public’s confidence in the banking system, so they are going to take it slow on bank closings, even though it will cost them more money in the long-term. What does this article mean for those starting a small business? It seems deposits are protected up to $250,000 by the government. But, what about your lines of facility for your business?

Your loan is regarded as an asset of the bank and should a bank fail, its assets including its loans book is sold. The new bank may have completely different guidelines and lending policies. Not all banks are entirely comfortable with small business start ups, especially in these challenging economic times. You’ll need to understand your new banker’s criteria on loans to small business, especially if you are a small business start up. Does your agreement provide for annual reviews? Check this and understand their criteria before your review.

If you do have a new banker, make a point of ensuring you do understand their lending and security criteria and importantly, work to strengthen your balance sheet. Is your loan subject to covenants? Check this now so that when it is time for your review, your numbers well and truly satisfy all the covenants.

Covenants are like certain financial ratios you and your business must comply with, else the loan requirements are breached. It’s serious if the covenants are breached. If you don’t know what this means, take your loan agreement and seek advice from an accountant.

One of the most important steps to starting a small business is securing stable and reliable lines of credit. Cash flow is KING! Any disruption to your facility lines means disruption to cash flow. If you can’t pay as a result of a temporary reason such as, your facility lines are under review or you have to reapply, suppliers, frankly, don’t care. They will just stop providing the goods.

…And what happens if you don’t have goods your customers want? …Your customers will just source the product from your competitor. Now, sending your customers to your competitor is simply not a good idea.

What do you do now, having read this article?

1. You can’t control whether or not your bank will fail, but you can control the state of your business
2. Check the requirements of your small business loan. What are the financial covenants if any?
3. Understand the bank requirements of your financial performance and put in place, now, the strategies so that you meet the stipulated criteria. With banks, there’s no excuses. If you have conditions you need to meet – just make sure you meet those criteria.
4. More bank failures mean instability, uncertainty and a lack of confidence. Consumer sentiment drives the economy. Look at your plan for the next year and trim your sails based on what you’ve learned in this FIDC announcement.
5. It looks like the economy’s not out of the woods yet. Remember, cash flow is the life blood of business. In your steps to starting a small business, plan always to have a reliable source of free cash flow.