Small Biz Tech Talk ™

Business partnerships provide an opportunity to do test marketing.  This is an interesting side benefit that many new computer resellers don’t think about when they start exploring business partnerships.  

When you enter into a business partnership, you have a prime opportunity to test the water on a certain product or service before deciding to branch into it yourself. When a new product, operating system, platform, or niche opens up, if you create a business partnership with a company who is an early adopter, you get to witness, first hand, how profitable the venture is.  

Let’s say I want to add Sales Logics to my product and service line.  To become an authorized reseller or get a recognized designation, I have to invest 80 to 100 hours or more in getting training.  These classes will cost several thousands of dollars, probably upwards of $7,500.  

I could do all this on my own or I could figure out if Sales Logics is a good opportunity by securing a business partnership with someone who already does this work.  If I monitor this business partnership closely, I will learn the following information:

• The return on investment the company is realizing
• The specific IT issues presented
• The associated business issues
• The length and nature of the sales cycle
• The amount of demand for the product
• The type of clients demanding the product

With a business partnership you get access to all the information you need to make a decision.  And you don’t have to go through any painful trial and error or learning curve issues to figure out if the investment is worth it.

Bottom Line on Business Partnerships
Business partnerships are a low risk, low cost method for doing market research. With a strategic business partnership like this, you can easily figure out if you want to invest the time and money in a new venture, based on the demand among your client base and the type of prospects that you work with.  

In this article, you’ve been introduced to Business Partnerships. To learn more about how you can improve your knowledge about Business Partnerships, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business. 

Business partnerships can be located in a variety of ways.  The following is a discussion of our preferred methods for locating a business partnership.  The list starts with our most preferred method and works down from there.

• The absolute best way to locate a business partnership is through a common account.  This means you start working with a new small business and they are already working with someone who’s a deeply niched technology consultant.  By working together you form a camaraderie similar to working together in an internal IT department.  The business partnership idea flourishes naturally from this type of introduction.  You’re both working together, you have ample opportunity to talk, and you become friendly.   

• Next down the list is tapping into your word of mouth referrals for business partnership ideas. If you have a business partner that does Access database development but you need someone who’s an expert on SQL server, letting your current partner know what you need will usually net you a few solid business partnership leads.

• Networking directly through organizations like the Chamber of Commerce or business networking events is the next best way to meet people for potential business partnerships.  

• Another great idea for identifying business partnership prospects is going to reseller channel events for the platform or products that you support, as well as reseller channel events for products that you don’t support.  

• Technical training classes are another source of potential business partnerships.

• User groups and related consultant reseller groups are always great places to meet niche technology providers.

• Look to niche and industry trade groups, trade associations and industry-specific conferences.  Some of the best people for business partnerships may be speaking.  

• Niche and industry trade publications are great sources for picking up potential business partnerships. 

• Vendor Web sites, industry ISVs, independent software vendors, and independent hardware vendor Web sites are other business partnership referral sources.  You can go a step beyond that and contact the local field reps in your area and get personal referrals from people that work with the software vendor or the hardware vendor.  

Bottom Line on Business Partnerships
There are many different ways to investigate potential business partnerships.  The best methods are the most personal ones.  The more direct contact you have with a potential business partner, the more likely it will turn into a full fledged business partnership.

In this article, you’ve been introduced to Business Partnerships. To learn more about how you can improve your knowledge about Business Partnerships, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Subcontracting often means providing services to clients that you would not normally provide.  For whatever reason the service you are subcontracting is not something you consider to be part of your core business.  So the question is, how should you view a client’s request for services outside of the scope of your business?

When faced with a subcontracting decision you need to ask yourself:

• Should I do it?
• Do I have to do it?
• Do I need to do it?
• Do I want to do it?  

Subcontracting does involve costs.  But, in terms of long term clients there’s a certain obligation that comes along with it too.  When you have a client on a long term service agreement then subcontracting is the way you can provide exemplary service.  

As an IT provider for a long term, steady client you should strive to provide any and all IT related services. If subcontracting will allow you to that, then the decision to go ahead is easy and straightforward.

Think of subcontracting as an opportunity to grow your client relationships a lot deeper.  Subcontracting services you wouldn’t provide yourself takes your customer service to a whole new level.  These are the things that clients remember when they talk to their business contacts, when they make referrals, and when they write testimonials.

Subcontracting is also an opportunity for you to bring on a new partner or vendor.  This gives your firm a much wider service capability that you can potentially use with other prospects and clients down the road.  

The most important benefit of subcontracting is the networking potential with these niche technology providers.  These people are an excellent referral source.  Your subcontracting to them, might result in them subcontracting to you down the road.   

Bottom Line on Subcontracting
Subcontracting services you don’t normally provide is almost an obligation for your long term clients who are on service agreements. Don’t think of subcontracting as an obligation though, it is really more an opportunity to deliver superior service and make excellent contacts with the people you are subcontracting to.

In this article, you’ve been introduced to Subcontracting. To learn more about how you can improve your knowledge about Subcontracting, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Business case studies can be a useful addition to your marketing collateral.  There are many different types of business case studies so here is some useful information on what to include and when to include it.

When Should You Use a Business Case Study?
When you are selling to an IT manager then you might consider using a business case study.  If you do decide to go ahead, then the business case study should be as on-point as possible.  

A generic business case study that talks about some company a thousand miles away is not very useful.  Your business case studies need to address the benefits that people have received by working with you.  For instance, including a Microsoft case study is only useful if you are Microsoft.  

Elements of a Good Business Case Study

• Provide a couple sentences of background information on what the company does
• Identify how long they’ve been around, where they’re located, etc…
• Identify the main decision-maker
• Define what the problem was before you started with the client
• Discuss how you fixed the problem
• Define what the benefits were to the client

The points in your business case study need to be fully attributed to what you did.  You should also have the name and the address of the contact person in the case study,  This adds to the credibility.

Do You Have To Be a Great Writer To Put Together A Business Case Study?
No.  All you’re really doing when you prepare a business case study is sitting down with your client for five or ten minutes with a tape recorder and interviewing them.  You need to add in the details of what you did, but essentially you are using your client’s own words to form the basis of the business case study.

Bottom Line on Business Case Studies
Business case studies are a great addition to your marketing collateral.  Don’t use generic, prepared business case studies though.  These showcase none of the things that make you unique.  The best business case studies talk specifically about your work and your clients’ success.

In this article, you’ve been introduced to Business Case Studies. To learn more about how you can improve your knowledge about Business Case Studies, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business. 

Computer service contracts should be set up for a yearly term.  There are some customers who try to push for a shorter period for the computer service contract but this is not a wise idea.  These people are probably more in the customer category than client, and what you want to develop are long term clients.

If you are at the point of selling a computer service contract then you have probably done an IT audit or helped them with an emergency.  These situations are your proving ground. You’ve built up trust, so if they want to work with you then there is no reason not to enter into a year long computer service contract.

If doing work with you on one or two little projects doesn’t convince them, they’re probably never going to be convinced.  If they insist on something real short-term, then don’t compromise your traditional computer service contract.  Instead offer them an agreement where they buy blocks of time at a slightly discounted rate.

A year long computer service contract is the industry standard.  If they are balking at the monthly price commitment, offer to lower the dollar value.  Their payout is lower but you still have a year long commitment – more than enough time to prove to them that a computer service contract with you is worth it at any price.

Don’t make these sorts of deals for anything but a really small account.  If it is a customer who fits the sweet spot profile, then going for a computer service contract of less than $1000 per month for a one year commitment is not going to work out.  You are better off finding other leads who are prepared to work within your computer service contract model.

Bottom Line on Computer Service Contracts
Computer service contracts are meant for the long term.  When a client enters into a computer service contract you want to know they are committed to you and to professional IT support.  If they want you to compromise when you know they have the need, then entering into a shorter term computer service contract will only end up hurting you in the long run.

In this article, you’ve been introduced to Computer Service Contracts. To learn more about how you can improve your knowledge about Computer Service Contracts, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Computer service contracts are just as attractive to your client as they are to you.  They might not be aware of this though.  Your job is to enlighten them as to how they will benefit from a computer service contract.

It is very important to be able to articulate the benefits of a computer service contract to your client.  If you don’t, your customers won’t sign up.  Read the following list of benefits and incorporate as many as you can when you are pitching a computer service contract.

Benefits Of Signing a Computer Service Contract   

• With a computer service contract, clients have a certain degree of dependability – they know you are going to be there consistently for them.  A computer service contract is like an insurance policy where for a certain premium you cover their needs and take care of them.

• Clients who are on a computer service contract own a little slice of you.  True, you are a shared resource – they are effectively sharing you with a bunch of other businesses in the local area, but they can also count on you as much as they could count on a staff technology person.

• Computer service contracts provide peace of mind – you commit to being there to take care of things for them for an extended period of time or for the long haul.

• Discounted hourly billing rates are another benefit of being on a computer service contract.     You’re able to waive certain premiums, surcharges and fees and you can provide them lower billing minimums. 

• Clients on a computer service contract enjoy prioritized response time and scheduling priority.

• Computer service contracts provide access to the entire range of virtual IT services you can provide along with all the perks you can offer due to your relationships with the different IT related businesses in the local community. These are the special perks you provide to your long-term loyal clients.

Bottom Line on Computer Service Contracts
Computer service contracts are good value for your clients.  You don’t have to come up with any hard sell campaigns either.  If you present the information authoritatively, the benefits of a computer service contract should sell themselves.

In this article, you’ve been introduced to Computer Service Contracts. To learn more about how you can improve your knowledge about Computer Service Contracts, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

IT audit pricing is best done on a fixed price basis.  Deciding what that fixed price should be though, can be challenging.  The whole point of getting paid to do the IT audit is so you aren’t working for free. However, the whole point of doing an IT audit is to get a long-term client out of the deal.  You have to balance these two motivations when you decide on what to charge for an IT audit.  

How do you price out an IT audit?

In most cases it makes sense to use a fixed price.  Even though it cuts into your margins, it overcomes a lot of sales resistance at an extremely critical part of the sales cycle. When you are selling an IT audit is when you are trying to pry a client’s wallet open that’s crazy-glued shut.  

If you show them you’re willing to shoulder some of the risk by offering an IT audit at a fixed price ,then they see you as more credible – someone they could see themselves doing business with long-term.

The typical IT audit for a sweet spot client (Ten to twenty-five PCs, single server) will take about three to four hours of work on-site.  If you’re charging $125 an hour for non-contracted clients, three to four hours would be $375 to $500.  A contracted client will get down to $100.00 an hour or $300 to $400 per IT audit.

The trick to getting an IT audit is to price it even less than that.  Yes, your margin will suffer but this is your proving ground.  You’re showing them that you’re willing to take on some risks and you’re developing a relationship. Once you prove you can do a great job, clients are usually more than willing to spend money with you on IT services.

The Bottom Line on IT Audits
The way you price your IT audit accommodates two goals:  to get paid and to win a client. You should always offer a fixed price for an IT audit to prove you are willing to take a risk just like your client is.  The second thing you need to do is charge less for an IT audit than the actual time you estimate it will take.  This again shows you are willing to take risks and it gets you in the door so you can prove your worth to a new client.

In this article, you’ve been introduced to IT audits. To learn more about how you can improve your knowledge of IT audits, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Overcoming objections to an IT audit is often best handled by asking questions of the client that make them decide all on their own that they need an IT audit.  By turning the tables on the client, you effectively make them the source of overcoming objections.

The key to overcoming objections is to make the client see the importance of what you are trying to sell.  You do this by asking them questions that help them conclude on their own that, gee, an IT audit does make the most sense.

Questions To Ask For Overcoming Objections

First you set up in their mind that there could be some potential problems here by asking:

• When was most of your system installed?  
• How long ago was that and who did that work?  
• Is that person or company still maintaining the systems?  

By now, they’re starting to think, well, it’s been awhile since it was installed.  I don’t even remember who did it.  No, they haven’t been maintaining and we’ve kind of been slacking on that for the past six months to a year.  

Next, you move to asking about the maintenance:

• What kind of maintenance is done and how often is it done?  
• Do you have a log showing the maintenance activities and routine support requests?
• Do you have any support history, or do you have copies of some support invoices and things like that?

At this point the client is thinking they are totally disorganized and lacking in maintenance and your job of overcoming objections is almost over.  

Finally, to really seal the deal, you ask about the number of people who’ve been involved with the system over the years.  If they’re typical of a sweet spot small business client, they have had three or five different companies involved over the past several years.  This means they have a hodgepodge mess and overcoming objections is easy after that.

The Bottom Line on Overcoming Objection
If you can turn the selling back onto the client, your success at overcoming objections is much greater.  When you allow the client to see why they need the IT audit without any hard selling, overcoming objections after that is quick and easy.

In this article, you’ve been introduced to overcoming objection. To learn more about how you can improve your knowledge about overcoming objection, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business. 

IT audits have three separate components.  You need to explain each component in terms of benefits in order to sell a client on paying for an IT audit.

The first component of an IT audit is the actual features of your audit.  These are items such as:

• Review  existing network
• Look at PC configurations
• Examine  telco circuits
• Critique IT policies
• Analyze existing data security and data protection measures
• Explain common data loss risks

To sell the IT audit you need to convert these features to benefits like:

• Ability to understand what it is that you already own
• Awareness of inherent limitations of what you own
• Understanding of system weaknesses
• Learning about untapped potential

The next component of your IT audit is the written, detailed report you will provide. The report a client gets with an IT audit includes an up-to-date asset inventory.  The benefits associated with this are:

• Client has complete documentation for insurance purposes
• Ability to make much more informed decisions on future purchases

Finally, as part of the IT audit, you will deliver an independent, vendor neutral set of recommendations prioritized by potential risk and severity.  What is the IT audit benefit here?  

Protection from becoming victim to sales bias from non-technical, commission-hungry sales reps
Understanding of what makes the most sense for existing IT investments and future business and IT needs.  

By presenting the three components of your IT audit in a features and benefits framework you tell the client what the IT audit includes, but even more important, you to tell them why they need it.  When you talk to potential clients, listen for the things that are most important to them. Then tailor your IT audit benefits to address their primary concerns.

The Bottom Line on IT Audits
It audits are an excellent way for you to get closely involved with a business’ systems.  They enable you to prove your value to a client.  The key to selling your IT audits in the first place, is to customize your benefits to the clients’ needs and highlight how your IT audit will help solve a client’s current and future problems.  

In this article, you’ve been introduced to IT audits. To learn more about how you can improve your knowledge of IT audits, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business. 

Hourly rates of your competitors, both the high and low range, will help you decide where to position yourself in the mix.  As we talked about last time, if you put your hourly rate too  low, clients will assume your work is worth that rate.  You want to attract clients who know you are worth a high hourly rate and who are willing to pay that rate for your services.

In order to attract these sweet spot clients you need to determine where the upper echelon of network consultants sets their hourly rates.  Unfortunately, finding out this class of hourly rate is not so straightforward.  

Hourly rate of high margin/service contract IT Consultants
Finding the hourly rates of the IT consultants you want to compete with is much more difficult. These competitors are unlikely to publish their rates in public places.  What’s even trickier is some of them don’t even stick to their own hourly rates.  They adjust their hourly rates to the client based on price sensitivity.  

To find out the hourly rates of this group:

• Ask your business partners that may have worked with other IT consultants in the past
• Ask accountants, management consultants, or attorneys what they think the going rate for LAN support is
• Ask your contacts that are deeply niched non-competing technology providers what they charge
• Inquire with the Chamber of Commerce and economic development offices  
• Ask around at user group meetings and networking events
• Ask for previous IT service invoices from new small business accounts
• Look in CRN and VAR Business – occasionally they will have articles that mention these kinds of things

The Bottom Line on Hourly Rates
Finding out the hourly rates that your competitors are charging is important.  You want to make sure you are setting your hourly rate in the top range.  This way you can ensure you attract the type of clients who will sustain your profitability long-term.  It’s not always easy to find out these rates, but taking the time to do so is well worth your while.  

In this article, you’ve been introduced to hourly rates. To learn more about how you can improve your knowledge of hourly rates, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business. 

Hourly rates of your competitors are good to know. In order to put together a competitive hourly rate you should be familiar with what other IT consultants are charging.  This means knows what both IT consultants in the low-margin sector are charging, as well as the hourly rates of those consultants that are targeting the same sweet spot clients as you.

This first half of our discussion will focus on the finding hourly rate of the IT consultants you don’t necessarily want to compete with.  The consultants who charge really low rates, attract price sensitive clients, and leave themselves no margin to take time to focus on business development issues.  

Hourly rates of low margin/high volume IT Consultants
The reason you need to this group’s hourly rate is not because you want to emulate it, but because you want to distance yourself from it.  If you set your hourly rate in this range then, advertently or not, you are positioning yourself as their competitors.  You will low ball yourself out of being able to attract the sweet clients you want.

To find out the hourly rates of this group:

• Go to Web sites (Try Googling your city, state, province, etc… and type in something like Redmond, Washington network consultants or Austin, Texas PC repair)
• Look around in consumer-focused advertising  – fliers, leaflets, coupon packs, newspaper display ads, etc…

These hourly rates will tell you what your market’s definition of being way, way, way too cheap is.  You don’t want to be anywhere near these providers because their clients are extremely price-sensitive and that’s not where your biggest opportunities are.

The Bottom Line on Hourly Rates
Finding out the hourly rates that your competitors are charging is important.  You need to know the range where your hourly rate should and should not be set. You don’t want to set an hourly rate that competes with low margin competitors because you’ll end up attracting highly price sensitive clients – you don’t want that.  

In this article, you’ve been introduced to hourly rates. To learn more about how you can improve your knowledge of hourly rates, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business. 

Price sensitivity is the degree to which a buyer uses price as a determining factor in his/her buying decision. You want to attract clients with low price sensitivity. These are the types of clients who will pay whatever you charge because they want you to do the work – no one else.

The benefits of attracting clients with low price sensitivity are great:  

• You can select the highest caliber clients because you know they will pay your rates regardless.  
• You can set your rates at the top end of the range and clients with low price sensitivity will still come to you.  
• Clients with low price sensitivity are typically more serious about their needs and will give you the freedom you need to build their system

It is clear that you should use price sensitivity to base your target market decisions.  Once you are certain that businesses with low price sensitivity are part of your sweet spot, you can then make marketing decisions that support your choice.

Now on the other hand if you choose to target clients with high price sensitivity your rates will necessarily have to be on the low end.  This might work for you, although given the choice I’d go for the high prices.  

Clients in micro businesses and home-based business are your typical high price sensitivity clients.  If clients like these are who you would like to work with, then your business model will have to focus on high volume.  You can’t survive with low rates and low volume.

Bottom Line on Price Sensitivity
If you want to charge premium rates you will have to target clients who are low on the price sensitivity scale.  On the other hand if you would like to work with home based and micro businesses you will need to take their high price sensitivity in mind when setting your rates.  Either way you need to make a decision and stick with it – there is not much room for crossing over as a client low on price sensitivity will typically choose high rate providers because of the perceived higher quality, and clients with high price sensitivity will choose based on rates almost all of the time.

In this article, you’ve been introduced to Price Sensitivity. To learn more about how you can improve your knowledge about Price Sensitivity, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business. 

Phone support, for a new network consultant, has to be a profit center; not a cost center.  When we talked about this need to charge for phone support last time, we looked at the benefits to you.  Now, we’re going to shift that perspective to the client and dispel any doubts you still have about charging for it.   

If you don’t provide phone support at all, what is your clients’ comparative alternative? They would end up having to call an independent phone support hotline. 

• These services typically charge $2.99 or $3.99 per minute

• For a 15 minute phone support call that adds up to $45.00 to $60.00

• The phone support is not even half as good:

• You’re definitely going to be much more skilled than the typical person phone support hotline person
• You know the account
• You know and understand the client’s needs
• You know all their bizarre configurations, workarounds, tweaks, and business issues
• You have a 360-degree bird’s eye view that allows you to offer targeted and accurate phone support

Now, your typical hourly rate should be in the $75.00 to $125.00 range.  For phone support we suggest you use a 15 minute minimum.  This makes for easy billing and it dissuades continuous, small, inconsequential phone support requests. This means that your phone support would cost anywhere from $19.00 to $31.00.

When you compare both the cost and the value of the phone support you provide, it’s easy to justify charging for phone support.  

Bottom Line on Phone Support
Don’t think about your phone support charges in terms of the $20 or so dollars you are billing.  Think about your phone support in terms of how much value the client is getting and the fact that comparative alternatives are more expensive in the long run. If you encounter resistance when charging for phone support, run this little scenario by your client.  You’ll be surprised by how quickly they buy-into your phone support pricing.  

In this article, you’ve been introduced to Phone Support. To learn more about how you can improve your knowledge about Phone Support, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business. 

Phone support is an area where many new IT consultants lose their shirts. They want to offer high quality service so they make phone support part of their service contract.  The problem is they end up giving away the phone support for free.

When you are billing on a hourly rate, the hours you spend providing phone support need to be charged as well as on-site time.  Let’s face it, with phone support you’re going to be contacted by phone, on your cell phone, by pages, by email etc… You’re going to be doing phone support on a remote basis – and you can expect to do a lot of it.  

There is a great deal of time involved in phone support and if you don’t get paid for it, your hourly rate is $0.00.  Profitable businesses don’t charge $0.00 for their services. If you think you can justify giving away phone support "only to good clients" or "only just this once" you are fooling yourself.  

When you give away phone support you also take away your clients’ incentive to call you for an on-site visit.  Why would they pay you $100 on-site when they can call you up, get a few instructions, and then not have to pay anything?  Are these clients gong to remain good clients?  No, they’ll start to abuse the free phone support – it’s human nature to want to save money.

Bottom Line on Phone Support
Don’t give your phone support away for free!  The information you provide over the phone is just as valuable as the support you provide on-site.  You need to understand that giving away phone support is not going to boost your business and it’s not going to make good clients more loyal.  Your "good" clients will start to abuse it and you will hemorrhage money if you provide free phone support.

In this article, you’ve been introduced to Phone Support. To learn more about how you can improve your knowledge about Phone Support, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Fixed prices are often attractive to clients, but are they sustainable for the profitability of your computer business?  When we start looking at fixed prices and ongoing computer maintenance the answer is, "maybe."  

If you offer a fixed price for ongoing maintenance you would typically have sold them a network already and now you are taking care of it for x number of dollars per month.  Your first instinct would be to also say you are offering this fixed price "subject to these restrictions."  But, if you have just one paragraph let alone pages of "subject to" restrictions, this is a major turn off for any client.

So how do you protect yourself with fixed prices? 

You create a fixed price agreement that has a very tight scope to begin with.  Rather than provide blanket coverage and then slowly take the blanket away with restrictions; give them only as much blanket as you have accounted for in your fixed price.  The psychology changes:  You are not taking away, now you are giving.  

The other issue you must be concerned with when using fixed price agreements, is to maintain control of all moves, adds, and changes.  You don’t want the self pronounced computer guru at the company to start mucking around with your system.  If they do, your fixed price will include the time it takes for you set things right again.  To avoid this, you need to train the internal guru so he/she knows her limitations and knows when to call you.  

Bottom Line on Fixed Prices
Fixed price maintenance contracts can be done.  Your challenge when using them, is to make sure you have covered off as many contingencies as you can up front.  This way you don’t end up having to set up restrictions later on or risk losing your shirt.  Fixed price contracts are an attractive selling feature but the onus is on you to do everything you can to make sure the time you are spending is adequately compensated.  

In this article, you’ve been introduced to Fixed Prices. To learn more about how you can improve your knowledge about Fixed Prices, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Pricing strategy is like walking a tightrope:  price too low and you lose money that is rightfully yours; price too high and you lose business.  Without knowing how to bill and what to charge, you risk looking like an amateur to the prospects that you desire most as clients.  And it can take years to recover from a poor pricing strategy.

There are three common ways to determine the pricing strategy for an IT service business: 

1. Price-fixed
2. Per PC or per server basis
3. By the hour

1.  Price Fixed Pricing Strategy
In order to offer a fixed pricing strategy you need to know the exact scope of what you’re doing.  You also need very tightly defined parameters so that you don’t end up doing work that is beyond the original scope.

2.  Per PC or Per Server Pricing Strategy
This type of pricing strategy is pretty much the same as price-fixed, except you need to have a handle on unit costs.  You need to know what’s going to change as you add or remove a PC or add or remove a server, and how it scales up the project.  A per PC or server pricing strategy does give you more flexibility if the scope of the project starts to include more boxes.  Some IT service businesses choose to combine the price fixed and the per PC or server pricing strategies.

3.  By the Hour Pricing Strategy
Another name for this pricing strategy is "time and materials" pricing.  This is the most commonly used pricing strategy in the IT service industry.  You set an hourly rate and you may choose to add a markup on the materials you provide.  This is the most flexible pricing strategy and the one where you are most protected when the scope of the project goes beyond your original estimate.

Bottom Line on Pricing Strategy
There are three main categories of pricing strategy.  Before deciding on the best pricing strategy for you and your business, you should consider the pros and cons of each.  The way you price your services has a significant effect on your business’ profitability and longevity – take your pricing strategy seriously, right from the start.

In this article, you’ve been introduced to Pricing Strategy. To learn more about how you can improve your knowledge about Pricing Strategy, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

IT services outsourcing is what you need to do when, not if, your prospects ask for products and services that you are not able to deliver.  Many new business owners think they need to know everything.  They fear not being able to offer every service under the sun.  

The great thing about the computer industry is that there are plenty of people you can use for IT services outsourcing. When you first start up, your concentration needs to be on getting business.  You need to spend time networking and relationship marketing.  

In order to have the time to do this you need to rely on IT services outsourcing – there just simply is not enough time for you to learn everything you will be asked to deliver.

Rather than lose the relationship, you want to be able to offer your prospects the services they need.  To do this you essentially have two alternatives for IT services outsourcing:

Work out referral relationships with other niche technology providers in your area  
Set up partnerships and subcontractor relationships

The quickest and easiest way to set up your IT services outsourcing is to set up partnerships or subcontractor relationships.  This is a fast and efficient way to deal with the issue.  

Of course, if you continue to get lots of requests for the same type of IT services, then you should probably consider getting the skills to offer it in-house.  When there is a large enough need then the time and money invested make good sense. Until that time though, IT services outsourcing is your best option.

Bottom Line on IT Services Outsourcing
Like it or not you can’t know everything.  When prospects ask for services you don’t offer, rather than lose the relationship, look to IT services outsourcing instead.  Build referral relationships with other niche IT service providers or set up subcontractor or partnership arrangements.  By doing this you maintain your client and leave yourself open to the possibility of offering the service yourself down the road.

In this article, you’ve been introduced to IT Services Outsourcing. To learn more about how you can improve your knowledge about IT Services Outsourcing, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Product ideas or services that your computer business will offer are not as easy to decide upon as you may think.  When you start a new business this part of business planning is often taken for granted.  

Deciding upon a product idea or service to offer typically starts with an assessment of your technology skills.  Once you know what you are good at, it is easy to come up with a service or product idea that interests you.  Therein lies the problem.

Many new business owners base their service and product ideas on their interests rather than their target customers’ needs.  

Two Approaches to Service and/or Product Ideas

Approach Number One

• Find a platform that you enjoy working with that sounds really, really cool and sounds like a product idea or service that everyone would want and need.  

• Then go and read every single book you can get your hands on, on that topic.  

• Attend every workshop and conference being held about this product idea or service.  

• Prepare for, and write, a certification exam to improve your credentials when offering this service or product idea.

Approach Number Two

• Start talking to very specific kinds of business owners and managers that are most likely to need IT services on a regular basis from your firm.  

• Determine from their answers, the services or product ideas they are most likely to need in the next year.

With Approach #1 you will need to sell clients on your product ideas and services.  
You will need to convince clients that they need what you are offering.  In contrast, with Approach #2, the product ideas and services should sell themselves.

You’ve already done the selling by asking them what they need.  It’s pretty hard for them to deny needing the product ideas and services they told you they needed in the first place.  If you asked the right businesses, then these people should have the willingness and ability to pay for the services and product ideas you are offering.

Bottom Line on Product Ideas
Your product ideas and/or services must come from your potential clients.  If you choose based on your interests, you will have a much tougher time selling your product ideas to them.  When you go straight to the source and then match your skills with the product ideas they suggest, your business will take off all that much smoother.

In this article, you’ve been introduced to finding new product ideas. To learn more about how you can improve your knowledge about finding new product ideas, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business. 

Computer service contracts are the butter of a computer services business. The difference between having a computer service contract and not having one, is what defines the difference between a customer and a client. As a business owner you want clients – people who are on long term computer service contracts.

Your goal is to move your customers into computer service contracts and begin a long term, stable relationship with them.  The customers that you are in contact with several times a year should be very receptive to at least a small computer service agreement.

These are the customers you should spend time trying to convert.  Make sure you keep in contact with them on a monthly basis.  Let them know of special offers you are making and any discounts you have on computer service contracts. If a customer is calling you several times per year then they should benefit from a computer service contract.  Outline to them what their savings would be.  

Ultimately, you would like to have computer service contracts with everyone.  That won’t be possible.  But even a $500 computer service contract gets them to raise their hand.  They are indicating a willingness and ability to pay on a regular basis.  This is what your business will thrive on – one regular, paying customer at a time.

Bottom Line on Computer Service Contracts
Computer service contracts are golden to your computer services business.  When you set up a computer service contract you are solidifying a long term relationship.  For customers who aren’t on a computer service contract but very easily could be – it is wise for you to keep in regular contact with them.  These customers have the potential to turn into clients so you need to do whatever it takes to make that conversion happen.

In this article, you’ve been introduced to Computer Service Contracts. To learn more about how you can improve your knowledge about Computer Service Contracts, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business. 

Contact management databases are a very, very important asset to your systems integration business.  In fact, a contact management database is like a treasure map.  In it you will find your future business.  

The names in your contact management database are golden.  Here are some tips for mining that gold most effectively:

• Review your contact management database weekly and make sure it is current.  Concentrate on  quality over quantity.

• Add some custom fields to your contact management database.  This way you can separate the contacts with strong potential from those that are weak, and anywhere in between.  Here’s how:

Set up the following four custom fields. You will use these as the basis for a points system in your contact management database.  

• Size Fit – how many computer related pieces does the client have?  Give each person in your contact management database a ranking of 10 to 50.

• Decision fit -  Is this person the main decision-maker for the company? Yes/No

• Niche fit – does this person fit the industry typically targeted?  Yes/No?

• Urgency fit – does the prospect have an urgency for your services in the next 90 days? Yes/ No.

Assign points for either a Yes or No answer.  Have your database automatically calculate the total score for each contact. When you rank the prospects in your contact management database like this, you can see at a glance which ones are worth pursuing right away.  This helps streamline your marketing and follow up.

• Two other custom fields to consider adding to your contact management database.

• Status drop down list – indicate whether the person is a prospect, a customer, a client, an influencer, etc…

• Primary motivator – this is a text field for entering the biggest factor motivating the person to make a buying decision.  

Bottom Line on Contact Management Databases
As a systems integrator, your contact management database is one of your most valuable assets.  In order to get the most return on this asset you need to use it effectively and efficiently.  Keeping your contact management database current is critically important to effectiveness.  Customizing your contact management database is a way to improve its efficiency.  When set up for maximum efficiency, the key to your future business can be found in your contact management database.

In this article, you’ve been introduced to contact management databases. To learn more about how you can improve your knowledge about contact management databases, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.