Consulting Firms: Should You Be a Product Reseller?

Consulting firms do not see great benefits from being product resellers. Don’t be seen as a commodities broker in your computer consulting firms.

In this article, we'll explore the two schools of thought on whether computer consulting firms should resell products.

Pure Computer Consulting Firms Defined

Some consulting firms want to be pure consulting firms. They believe that they are never going to make a penny off product margin and that there are potential conflicts when reselling products. So these kinds of consulting firms don't choose to resell hardware, software, or peripherals. As consultants, these companies will help clients decide exactly what to buy, what the specs should be, and show them where they can buy the recommended products.

Purchasing Agents Are Almost Pure

A variation on this scenario includes becoming the purchasing agent for clients. In this case, your firm does the purchasing for clients and your firm bills clients for a couple of hours for that function. Your firm gets and reviews quotes, places orders, tracks orders, and carries the purchase through to completion. Both of these (the referral role and purchase agent role) are more of a pure consulting model.

Hybrid Consulting Firms Are another Option

With a hybrid-consulting model, your consulting business resells some products. A lot of computer resellers do what's known as white box PC reselling; selling what's known as PC clones. A computer reseller offering white box systems is typically selling non-branded desktops, non-branded servers and in some very limited cases, non-branded notebooks (called white books).

To Resell or Not to Resell in Consulting Firms?

The strategic decision of whether to resell or not depends on where you want to be spending the bulk of your time. Do you want your firm to try to pick up some incremental profit off of product sales? Or do you want most of your consulting firm's income to come from pure consulting dollars? Regardless, if you really want to be in a strong sales position for your consulting business, you really should not be leading off with a product sale.

Are Products Sales a Good “Foot in the Door?”

Now many new computer consulting business owners wonder: Should you sell inexpensive PCs, cheap software and cheap peripherals to get a foot in the door to sell the consulting services? The answer in most cases is no. 

Why not?  Because then, all of a sudden you've shown customers that you want to be their commodity broker.  Will customers hire their commodity broker for consulting?  Not likely. They've got your firm pegged as the cheap, low-cost source.

If you want to resell products, resell products to people that you have consulting relationships with. And make sure your consulting firm makes an ample profit margin for the time, capital, space, staff and overhead that you must devote to reselling products.

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Computer Skills: Which Ones Your Staff Needs

Computer skills, especially more advanced ones, can be easily self-taught and shared among your staff. This article shows you what your clients are looking for in technical computer skills.
Don't worry too much if you lack advanced technical computer skills.  A lot of that can be remedied by just putting in a little bit of time each week in doing some self-study. In this article, you'll learn which computer skills are necessary to serve your sweet spot small business clients.

If It Works, Break It
You can do something as simple as getting a not-for-resale (NFR) copy of a product that you want to sell, install, and support and then working with the product in your lab. When you or one of your lead technicians or engineers has a spare half-hour to an hour, you can walk through the basic installations. Then, deliberately break the lab installations. Next, reinstall the software until you get more comfortable with the package.

Most of these products that you'll be installing for small businesses are very mature technologies. They're very wizard-driven, and at least for plain-vanilla configurations, they don't require tremendous levels of computer skills.

Installations Are Easier Now
Years ago, it was much more difficult to install the Novell small business suite or IBM equivalent, or the original 1997 Microsoft Small Business Server. But all of these companies, especially Microsoft, put a lot of money into making it easier for people who don't have advanced IT backgrounds and networking computer skills to install their small business server application suites. 

In terms of your technical computer skills to service sweet spot clients, your staff needs to:
1.    have good strong PC hardware skills
2.    be able to handle a peer-to-peer setup
3.    understand what TCP/IP is all about
4.    know what POP3 and SMTP are
5.    know how to work with basic SOHO routers

If your staff possesses the above skills, you're definitely at a good starting point to get started with at least the smaller sweet spot small businesses (10-20 PCs).

Share the knowledge among your employees
Make sure your staff members cross-train each other and you. This way, no one's ever “too knowledgeable” to the point where they can blackmail you, extract huge raises or huge bonuses, or walk away with your client base. You have to make sure your company's internal know-how or intellectual capital can't just get up and walk out the door to your biggest competitor.

The Bottom Line about Computer Skills
In this article you've learned about which technical computer skills are necessary to service your sweet spot clients.

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IT Specialists: Finding Your Niche

IT specialists who find a niche have an easier time marketing and become more successful. Learn as much as you can from your current clients so you know where to find new ones so you can become an IT specialist.
Finding a niche is an important step in becoming an IT specialist. In this article, you'll learn about how to develop your niche.

A Horizontal Niche

Instead of all your ideal clients being in the same industry (a vertical niche), maybe you realize that most of your clients' main contacts are office managers. What do you do next? Take an informal survey. Ask them what their biggest IT problems are, what their biggest business problems are, and make sure that you're working towards becoming a solution to those problems

This will help you retain those clients. But also, more importantly, it's going to give you a heads up on what the big business issues are and what they see as the biggest IT issues. That's going to enable you to craft your marketing pitch to go after other clients that are just like them. Begin looking for mailing lists, organizations, magazines, and conferences where you'll find a lot of office managers.

What IT Specialists Should Know:

For marketing purposes, you need to ask the following kinds of questions about any target market:
o Who are “they”? ____________________________________________________
o What do they read? _________________________________________________
o What trade publications are out there? ___________________________________
o What e-zines? ______________________________________________________
o What newsletters do they get? ________________________________________
o What local and regional conferences might they already be attending? _________
o What trade groups have local chapters that they belong to? __________________
o Where do they hang out? ____________________________________________
o What do they talk about? ____________________________________________
o What do they worry about? ___________________________________________

To get the answers to these questions, talk to your best clients… but only if you want to be an IT specialist with more clients just like them.

Chances are you've developed personal relationships already. So take your clients out for breakfast; take them out to lunch. Tell them you want to be an IT specialist and ask them your questions so you know exactly where to look for more new clients just like your current ones.

The Bottom Line on Being an IT Specialist

To get more clients in a horizontal niche, you need to find out as much as you can about your clients jobs, where they hang out and how you can find more clients just like them. When you do, you've given yourself the distinction of being an IT specialist.

IT Specialist: Why Narrow It Down?

IT specialists need to narrow down their market and find a niche. Targeted marketing to a specific niche group is most beneficial to IT specialists.

If you're trying to grow your business, why would you turn away potential clients? In this article, you'll learn that as an IT specialist, your marketing efforts are less about turning away other clients and instead about finding if you have enough prospects to market to.

If you know that your best clients are small accounting offices, do a quick search to find out how many small accounting offices there are in one hour radius of where you're located. If you don't know where to easily get your hands on that data, either contact one of that industry's leading trade groups, or talk with a mailing list broker.

IT Specialists Can Market to a Niche

Marketing to a niche is so much easier, too. You will know exactly which trade publications to advertise in. Don't spend a lot of your time and money putting generic ads into the newspaper, radio or the phone book. You are an IT specialist, so concentrate your marketing efforts directly into your niche.

Once you develop expertise, as an IT specialist, all of a sudden you're worth even more to those potential clients. Your marketing message will resonate with the person that's picking up the phone, that's looking at your long copy sales letter, that's looking at your postcard, or that you want to get to attend one of your seminars.

Don't Try To Speak to the Masses

Don't try to come up with a message that resonates with everyone. If you do, you're going to end up competing on price. You're going to end up being a commodity just as if prospects opened up the phone directory and they called 30 companies looking for the dirt-cheap, lowest price.

Put Your Name Where Your Clients Will See It

If there's a newsletter or a magazine that these prospects all read from the local association, think about putting a targeted ad in there, or writing an article, or becoming active in that organization by volunteering or speaking at that group's events. In each of these instances, be sure to at least mention how your company provides great IT solutions for that particular niche or industry.

The Bottom Line on Being an IT Specialist

There are many different ways to penetrate the circle, but the key thing is to identify something that you enjoy doing and that's lucrative enough that it's worth trying to get more clients just like that. This simple targeted marketing strategy works for IT specialists across most different industries. Finding a niche is really important. Otherwise, you're going to look just like everyone else.

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IT Specialist: Replicating Your Client Successes

IT specialists need to figure out who their best clients are and find more of them. Consider your professional background and your current clients to help determine in which area you can be an IT specialist.

Often, the best way to be unique as an IT specialist is to narrow down your industry focus. Though it may sound like a daunting task, this article will show you how it can be quite simple.

"Model" Your Best Clients

Find more clients that are just like your current best clients. To do this, take your active client list and put it into a Microsoft Excel worksheet so it is in columns. In the first column, enter the client name. In the next column, have their revenue for the last 12 months. Then, divide by 12 to determine the monthly income and figure out who your most valuable customers are.

This exercise is important because you can evaluate:

o Customer service… who should get THE best services?
o Retention… who's REALLY worth holding onto?
o Profitability… who's REALLY paying the bills?

Categorize Your Clients

Now, look among your best, most active clients and customers. Figure out who falls into that (a) micro category where they have fewer than 10 systems, (b) who falls into that sweet spot of anywhere from 10 to 50 PCs, and (c) then who's very large to the point that you may not be able to service them adequately without adding a lot of high-level technical staff.

From this exercise, you can find more clients that are just like those where you have the strongest expertise. Look at your list and see what makes your biggest and your best clients similar. Now you can become an IT specialist in that field. For example, are they accountants? Are they doctors? Maybe they're office managers; maybe they're controllers, lawyers, small manufacturers, or restaurants. Identify who they are and what they look like because you'll want to find more of them.

Narrow Your Industry Focus

Narrowing down your industry focus will immediately make you stand out as an industry expert. It doesn't really matter what the industry is. For example, if it's dental offices, that's fine. You can be an IT specialist focusing exclusively on dental offices or you could even expand it to other medical offices.

Evaluate Your Own Professional Background

Your own industry expertise could also be a really good springboard. That way, when you present your case to prospects, you will have the benefit of knowing about their field of business. That will be a huge reassurance for prospects. These small businesses are much more likely to pick your firm over someone who is direct mailing a generalized piece with no industry specialization.

The Bottom Line on Being an IT Specialist

Narrow down what industry your current clients fall into and where your own professional background comes from to form your niche as an IT specialist. It will make your marketing and sales efforts easier.

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IT Consulting in Micro Small Businesses

IT consulting practices can be done by starting with microbusinesses. Gain confidence by realizing what software and hardware you need to know (and probably already do) to begin IT consulting.

Small business is a hot market for IT consulting. There are different sizes of small businesses and they all have different IT consulting needs. In this article you'll learn some items you should be familiar with in order to provide IT consulting to these businesses.

Micro Small Businesses Defined

Micro small businesses are companies that have anywhere from 1-10 computers; windows based in most cases. Usually these companies employ 1-10 people. Revenue (in U.S. dollars) will typically be anywhere from $100,000 up to about a million or so.

The big differentiator in micro small businesses from others, as far as IT consulting is concerned, is that they have no dedicated server yet. They may be running a peer to peer system and that’s the major reason they are bringing you in there.

Don't have a “crisis of confidence”. Many people, when first entering IT consulting are not sure if their skills are strong enough. But most people will find that they are at least capable of working with at least micro small businesses as a starting point.

Micro Small Business: What Hardware You Need for IT Consulting

You need to know about basic desktop PC support, notebooks, PDAs like palm based PDAs and windows cd based PDAs, printers, how to set up servers and dial up modems, DSL, cable modems a little bit about how to set up surge protection, data line protection, and entry level battery back up units.

Software Requirements for Micro Business IT Consulting

You need to be reasonably familiar with the most popular desktop and notebook operating systems out there. But mainly just the basic Microsoft Windows flavors on the desktop and the desktop’s of notebooks and a little bit on PDAs.

Micro businesses are also looking for a lot of very heavy desktop office automation applications support, basic PC support, basic notebook support, the whole Microsoft Office family, Intuits Quickbooks the accounting software is very popular, the Best Software’s ACT software for management is also really popular.

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