Relationship marketing is a powerful tool that you must use to grow your computer consulting business. Relationship marketing is how I turned a simple website demo into $175,000 in service revenue over a period of a few years. When you use relationship marketing you don't waste your money on risky display advertisements, you don't have to cold call, you don't have to do any door to door selling, and best of all you don't even feel like you are selling.
Relationship marketing centers on conveying the right kind of professional image all of the time. It is crucial that in every situation you find yourself in, you remember that you are marketing your business. You are your business so what people think of you they will also think of your business.
Another important key to remember with relationship marketing is that every person you meet presents an opportunity to forge a relationship. Obviously networking opportunities are important to remember. But the area of relationship marketing that many people forget about is developing relationships within the businesses you serve.
You may have gotten a lead from one person at a company. Or you may have one key contact at a business you currently service. Those who are savvy at relationship marketing know that one contact is never enough. People change jobs and companies all the time. You don't want to lose a potential client or service contract because your key contact is no longer around.
When you use relationship marketing correctly you will develop relationships with more than one person at any business you enter. Think of every person as a potential source of business. Make sure you expand the scope of your accounts to at least a couple of people with whom you have a solid relationship.
The Bottom Line on Relationship Marketing
Relationship marketing is a critical element in your overall marketing strategy. You must always be aware of how you are presenting yourself. You never know when or where you will meet the next person with whom your relationship flourishes into a whole lot of business. The beauty of relationship marketing is that it seems like effortless selling but it is really the most powerful and effective marketing tool you can use.
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Relationship Marketing and Your Computer Consulting Business
Service Contracts: The Best Business Model For Consulting
Service contracts are key for the busy computer consultant. They will help you to manage your time when you have many clients all needing service at once. By setting up computer service contracts you will be able to maximize your utilization rate while still having enough time to deal with client emergencies when they crop up.
When you have a bunch of clients who all have an emergency of some sort you can't be everywhere at once. To deal with this you need to narrow down the list of who you are obligated to respond to emergencies for. You do this by creating computer service contracts.
A service contract business model is so important because what you are doing is forcing the people you service to make a decision. Are you in or are you out? Your service contract model weeds out those who are just testing the waters. Without a computer service contract it is you who decides if you can handle their emergency or not.
By using computer service contracts you can manage everyone's expectations effectively. Those who have a service contract know they are top priority. Those who don't, know that you have clients with service contracts and that they are the ones who are dealt with first.
The Bottom Line on Service Contracts
Service contracts keep expectations in a nice neat package. You don't have to stress about trying to be everything to everyone. You can concentrate on providing top quality service to those clients you have a service contract with. The rest will simply have to wait in line.
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Computer Consulting Business: Find the Right Clients
If you really want to make a decent living and want to have a good, successful, viable computer consulting business, sooner or later you have to narrow down your focus and develop a keen intuition. Additionally, you have to become good at spotting the best small businesses accounts.
The Small Business Myriad
There are millions of small businesses in the U.S. and there are millions of small businesses abroad. There’s a pretty good chance that there are thousands, if not tens of thousands, of companies that would qualify as small businesses in your local area.
The sad fact is, if you latch onto the wrong ones, you’re not going to have a very good computer consulting business.
Finding the Best Accounts
You need to know where to find these best accounts. In the computer consulting business you also need to know how to say "no," and when to say "no."
It’s extremely important that you know where to look, and how to verify that a small business is going to be a gratifying client for your computer consulting business.
You obviously want to feel a certain sense of career satisfaction. That’s probably one of the reasons you’re looking at starting your own computer consulting business as opposed to sticking with a traditional corporate IT career.
Keep the Financial Aspects in Mind
Your computer consulting business also has to be lucrative financially because you need to have a profitable business. You want it to be a stable source of recurring revenue.
Remember, all small businesses are not created equal. Your job is not to be the Mother Teresa of PC support. You are not starting a computer consulting business as a charitable organization.
The Bottom Line about the Computer Consulting Business
Of course, you want to have empathy for the people you support and you want to do a great job for them. At the same time, you have to look out for your own interests to make sure you’re going to be there for them six months to a year down the road.
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Computer Consulting: Should You Work With Micro Businesses?
When it comes to computer consulting with micro businesses, look at the margins issue. You will always have a certain amount of hours that you’re forced to eat because you can’t bill for it. When you have a larger base of computer consulting clients to spread it over, a loss is a lot easier to swallow.
"Eating" a Loss is Easier with Big Clients Than Small Ones
For example, if you have a customer that’s billing $2,000 a year with you and you’re forced to eat a $500 job, you’ve sacrificed 25 percent of your billing for that customer. If you have someone that’s billing $10,000 a year with you and you’re forced to sacrifice a $500 job once a year, that’s no big deal.
That’s a very small percentage. The bigger the client, the more you can afford to do things like that.
Are Micro Business Distracting You From Finding "Sweet Spot" Clients?
Is computer consulting for micro businesses taking away valuable time from cultivating more lucrative business? Only you can answer that question.
You have to make sure that you have enough time to go after the solid B2B small businesses where there’s at least 10 systems, a real server and they can afford at least $5,000 to $10,000 in IT services a year on an ongoing basis.
Focus On The Larger Computer Consulting Clients
Phase out your dependence on micro small businesses. As you start taking on additional larger clients, you’re going to find you have to make tough decisions anyway.
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Consulting Salary - What Can Your Business Afford?
Consulting salaries are an important factor in your ability to hire the type of talent you will need as your business expands. You will probably do much of the work yourself, but as your business scales up you will need to employ others to help you. The consulting salary and payment scheme you offer will be key to attracting and retaining top talent.
You need to ask yourself very early on in your business operations, "Will I be able to afford the kind of technical person that has the skills that are needed for sweet spot clients?" If your business is only generating enough revenue to cover a consulting salary of $27,000 per year, you might be in for a shocking answer.
Consulting Salaries and Scenario Analysis
When we think about consulting salaries we have to use the triple billing rule: 1/3 of revenue goes to sales and marketing, the second third goes to taxes, insurance, and administrative expenses, the final third includes consulting salaries as well as all the other business expenses.
A great tool for figuring out potential consulting salaries is an Excel spreadsheet set up for scenario analysis.
Run different hourly billing rates through the analysis
Allocate the overall revenue into the general thirds
Take out a reasonable amount for general businesses from the final third
Analyze what is left for consulting salaries
You should try to run billing rates between $75 per hour to $125 per hour and come up with a rate that will support a consulting salary of $40,000 and up.
The Bottom Line on Consulting Salaries
The overall revenue of your business must be able to support a consulting salary that is sufficient to attract good, solid employees. A some point you will likely need to hire some help. If yo use the Triple Billing Rule you should be able to set an hourly billing rate such that you can afford to pay an attractive consulting salary to yourself and your future employees.
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Computer Consulting Businesses: What Your "Sweet Spot" Clients Are Looking For, Part One
When providing B2B service, computer consulting businesses' ideal clients, or “sweet spot,” are companies with 10-50 PCs and 1-10 million in revenue. These “sweet spot” small businesses typically look for four things in their computer consulting businesses.
1. Response Time
2. Knowledge (Business and Technical)
3. Customer Service
4. Price/Value
In this article we will focus on the top two items, response time and business and technical knowledge.
Speed is Paramount in Computer Consulting Businesses
The more that a small business needs IT, the more likely that response time will be the leading factor. Why? Downtime is money lost. How quickly computer consulting businesses can address their clients' urgent or emergency IT needs becomes very important.
Computer Consulting Businesses are more Than Just a Bunch of Technicians
Your technicians' quick response to IT needs is of prime importance to most sweet spot small businesses. Second in importance would generally be your business or industry knowledge. For example, how well do your employees understand the client's particular industry and niche? Sweet spot clients definitely want technology providers that can really solve business problems, as opposed to just running around doing “screwdriver” kind of work, such as upgrading RAM or loading software.
Computer consulting businesses basically becomes the outsourced IT department for your sweet spot clients. Your company will end up working on hardware support, software support, LAN and WAN support… so you deliver soup-to-nuts, end-to-end solutions.
The Bottom Line on Computer Consulting Businesses
In this article you've been introduced to your sweet spot clients' first two requirements in computer consulting businesses.
Computer Consulting Business: Know about Vendor Hard Drive Replacement
Many of your computer consulting business clients will come from non-technical, business backgrounds. As a result, many will not immediately grasp why a failed hard drive cannot "simply" be replaced by a new or refurbished hard drive.
As part of managing clients expectations, it’s important to educate your clients on the steps that go into formatting a hard drive, loading the OS, configuring device drivers, loading software applications, customizing the OS and applications and restoring data.
Educate Your Client
As a computer consulting business owner, you know replacing a hard drive is not as simple as removing the shrink wrap and installing the device into the PC. But, many times, your clients don’t.
Or they just assume that all the OS files, device drivers and software applications will "magically" appear. This all may sound really basic, but taking a few minutes when discussing PC warranties with your clients to explain these issues.
How does the Vendor Handle Hard Drive Replacement?
You need to know how your preferred PC vendors handle hard drive replacement under warranty service. What kinds of labor are covered if a desktop PC or notebook hard drive needs replacement under the warranty?
Some vendors specify that the hard drive device needs to be just physically replaced and operational, and recognized by the PC hardware setup program. Under this form of warranty coverage, the technician’s job is done the moment the empty (blank) replacement hard drive is installed in your client’s PC.
The Real Cost
Unfortunately, as most PC vendors feel financial pressure to reduce their support and warranty costs, your computer consulting business clients probably will be subjected to a no-frills warranty service approach. Hard drives for desktop PCs are relatively inexpensive, around $100 to $200 at retail.
So it’s important for your clients to understand that warranty service on a hard drive replacement generally doesn’t cover the more substantial labor costs involved with restoring the hard drive and system to the pre-crash condition.
If your clients outsource this work to your computer consulting business, it easily could cost them $200 to $500 (or more) in labor to get that PC hard drive back to its pre-crash condition. Even if your clients’ internal gurus handle the work, this easily could pull these internal gurus away from their "real" jobs for a half-day or more.
The Bottom Line about the Computer Consulting Business
The expense of recovering a crashed desktop PC hard drive tends to be more concentrated on soft costs, which most times aren’t covered by the PC vendor’s warranty, therefore we see more and more reason not to recommend purchasing extended warranty coverage with entry-level desktop PCs.
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Computer Consulting: A Business of Time and Sweat Equity
Building a computer consulting business requires a lot of time. It involves going out to meetings and it's shaking a lot of hands. You'll need to make a lot of follow-up phone calls. Display ads and direct mail drops and similar marketing efforts do not replace calling up a potential client to try to establish a person-to-person connection. Because of the required hands-on time, you should be realistic about what it takes to get your computer consulting business going.
Franchises Don't Serve Silver Platters
Even with a franchise operation, the franchiser is not handing you a client list on a silver platter. If you want to be handed a client list on one, don't buy a franchise: you need to buy a current business. And of course, buying a current business is even more capital intensive than a franchise. To buy even a small, thriving IT consulting firm could cost anywhere from a few hundred thousand dollars to a few million dollars… pretty much some multiple of its annual sales.
What Are Your Computer Consulting Business Start-Up Costs?
On the other hand, you can start your own consulting firm generally for as little as a few thousand dollars. What do you need? You need a business phone number and voice mail. You need a cell phone. You need business cards and legal licensing registrations. And you probably want to meet with an attorney and an accountant. You'll need some insurance. In many cases you can get started working out of your home office. Start-up costs are certainly higher with a franchise.
Franchises Aren't for Control Freaks
Another downside of franchise can be a loss of control. You have to do things a certain way and according to the established rules. And you can't step too far outside of that. Again, your company would be paying the franchiser a percentage of your company's revenue indefinitely. And you won't have as much flexibility in taking your business in a lot of different directions that you may want to.
The Bottom Line on Computer Consulting
Computer consulting has a few different options for start-up. You can start an independent business, buy a franchise or buy an established business, depending if you want to start from scratch or be handed a client list. A start-from-scratch computer consulting business requires more sweat equity than money.
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Computer Consulting Business: Nail Down the Vendor Support Options
No computer consulting business can afford to be sitting at a client site, running up a big bill, staring at a blue-screen-of-death, facing an angry mob of irate users and sitting on hold for two hours with tech support.
This scenario is your absolute worst nightmare in running a computer consulting business and can be the kiss of death to your client relationship.
The Need for Good Vendor Technical Support
Good vendor technical support will preserve your credibility as a computer consulting business during times of crisis. No matter how experienced you are at PC hardware troubleshooting, calling on a specialist is a necessity.
Understand What Is Offered
Rather than get an unpleasant surprise when you need help the most, get the lowdown on vendor technical support before you make the purchase recommendation. Although many top PC vendors have similar capabilities and services, ask about included technical support services, and preferably get a description of them in writing.
Ask Questions
As a computer consulting business, you will want to ask questions to determine the reliability of PC vendor technical support. Find out if they are available by phone, if the technical support phone number is toll-free and if the support is free or not.
Also, find out if there are different technical support phone numbers for different products.
In operating your computer consulting business, you will also want to know if vendor technical support has 24/7 support in case you have a need for emergency support. Ask if online tech support resources are available as well.
Deal With a Specialist
As a computer consulting business, you want direct, rapid access to a specialist who deals with nothing but that particular product all day. So test the technical support group’s responsiveness at a time when your heart isn’t racing in the heat of a client server-down emergency.
Also, PC Magazine (http://www.pcmag.com/) regularly evaluates PC vendors’ technical support quality, so this is a good resource to look into.
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Computer Consulting: Which Business Is Right for You?
Some people decide they want to open up an independent doughnut shop instead of buying into one of the really large doughnut shop companies. If you want to make submarine sandwiches, you can do it on your own or you can buy into one of the big, extremely well known franchises. If you want to start a computer consulting business, you can be independent or part of a franchise.
It all depends on whether you want to build your business completely by yourself, or whether you want to try to take some shortcuts. Of course, with a franchise, you need to be prepared to up the ante. In this article, we'll explore some pros and cons to each choice.
Be Prepared to Put in Some Sweat Equity
Realistically, during your computer consulting startup phase, you're still going to have several months where you'll need to be out pounding the pavement, shaking hands and getting your name out there. You'll also follow up on a ton of leads, generate a lot of proposals and go out on a lot of sales calls. And you'll have to do all of this before you start getting a lot of billable projects. Don't think that just because you're buying into a franchise that those problems are going to go away overnight. You need to be realistic about the pros and the cons of buying into a franchise.
Different Strokes for Different Folks
The right decision for one person isn't the right one for the other. It really all depends on what you're looking for in your computer consulting business, your skills, and your available time and financial capital.
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Computer Consulting Business: Hardware Warranty Services
As a computer consulting business, you shouldn’t be spending precious time and your clients’ limited budgets troubleshooting a malfunctioning monitor or CD-RW drive.
If your computer consulting business is large enough that you have both senior-level and technician-level staff, you’re probably already doing a great job of directing workload to the right personnel.
Are You a Company of One?
However, if you are a small computer consulting business, where perhaps you are the "company", it makes sense to let the PC vendor’s technical support staff arrange for hardware warranty repairs, using their large networks of national service providers.
Know the Facts about Warranty Service
As a computer consulting business, you will want to know how long the warranty period is, if it covers parts, labor or both and what the promised response and turnaround time on warranty service may be.
Also, determine whether the vendor will try to pressure your clients to do their own service. If so, are your clients prepared to pay your consulting firm to do the labor?
Scheduling Hardware Warranty Service Calls
If possible, try to have your clients’ internal gurus schedule hardware warranty service calls to coincide with times when you are at your clients’ offices on other related computer consulting business. Or at the minimum, be sure that your clients’ internal gurus are there to supervise the third party hardware technicians.
Be Involved
It’s really up to you to decide how active of a role your computer consulting business wants to take in coordinating and managing these hardware warranty repairs. In some cases, getting in involved with the full end-to-end responsibility makes sense, including packaging up the defective part to send back.
In other cases, you may be better off training your clients’ internal gurus on how to place these vendor tech support calls and supervise the hardware warranty repairs.
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Computer Consulting Business: Determining Client Criteria
So you’re looking for quality accounts as you start your computer consulting business. What are the qualifying criteria for such accounts?
Consider Proximity
First, the potential client for your computer consulting business should be close to you, generally within a 30 to 60 minute drive from where you’re located. This is going to have some impact on the networking events you attend or anything else you do from a marketing perspective.
Potential Client Size
In starting your computer consulting business you will want to target potential clients that have 10 to 50 PC’s. The prospect should be big enough that they need a real server, which most of the time could translate to 10 to 100 employees.
A good prospect for your computer consulting business would be companies that have $1 million to $10 million in annual sales. This information will help you in your marketing efforts, especially if you decide to do some direct mailing down the road.
What Should Your Prospects Have in Use?
In most cases, your computer consulting business’ potential clients will have their own email domain. You will want to address how their users retrieve and send emails when meeting with prospective clients.
In most cases, they’re going to have a dedicated server or dedicated Internet access, so this will help narrow it down. It also indicates that they have more serious IT needs.
Ensure They Are Serious About IT
If a prospect for your computer consulting business doesn’t have a dedicated server, dedicated Internet access or they’re messing around with peer to peer and dial-up lines, they’re probably not for you.
The Bottom Line about the Computer Consulting Business
Any prospect you are considering as a target for your computer consulting business should make IT mission-critical. Many times a potential client can end up being a good, strong prospect and future client because they’re in an industry where IT is critical.
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Are Business Consulting Companies Worth Your Time And Money?
If your business is in trouble and your loosing money, then hiring any one of the qualified business consulting companies out there may be one of the best choices you can make for your company. Business consulting companies can give you the solutions you need to make your business a success that is their job. They will look and all side of your business and find its strength and its weaknesses and then draw up a plan that is right for your business. Business consulting companies will give you the answers you need for long term revenue and profit and will consistently work with you and your employees on how to use the tools they provide for you, so you and your employees will have a profitable business for years to come. Just because you open a business does not mean you know how to run it, at least to the point of being open long enough for you to see a profit from your investment. There may be a simple plan that doesn't cost too much out of pocket expense, but may bring more customers into your business, business consultants can give you marketing tips such as web site ads and promotions, direct mail, or a half page ad in the yellow pages. You too may have come up with this idea all on your own however, unlike business consulting companies, you have no idea which one of these idea's would be the better people getter, or how to strategically place your ad were it will get the best results.
Once you decide to hire a business consulting company, which one are you going to choose? Searching on the internet will get you thousands of hits, but then what? Of course all business consulting companies will claim they will do a good job for you and your business. Many will claim to provide their advanced expertise in all categories of business and marketing techniques. While working for you will be their main focus. While it's a good idea to hire a business consulting company, but your not sure how to go about finding a good consultant that will work to make your business profitable and not take all your money and vanish. The best thing to do is go online and search for the right website that will give you information about business consulting companies and how you can get in touch with them. You will have to register to a specific site and give them the information about your business so they can match you with the best consulting companies suited to your needs. Most of these sites are low cost and using someone to help you find good business consulting companies is worth it. They do all the hunting for you and look for all the qualities you're looking for in a business consultant. The business consultant company you hire can take a big burden off your shoulders. They will take the worry out of what to do next to improve your business.