Long-term Strategic Planning for SMB Consultants

It’s been a busy week. I got a lot of email/queries about my posts of the pending doom of the SMB IT Consultant. That is not what I said but frankly it’s foolish to believe that it’s nothing but bright skies ahead for SMB Consultant, IT specialist, SBSer, etc. So here is the natural progression as I see it:

• 1. Most consultants I’ve met in this business worked in IT for larger companies and got disenfranchised.
• 2. Most of those realized they could make the same amount of money working half the hours.
• 3. Most are thinking Geek Squad, et al is not really competition.
• 4. #3 will slowly put #2 out of business. The remainder of this email is about this point.

Defining The Market
Regardless of what you think of Geek Squad competence you have to be willing to accept that most of our SMB peers are not very skilled. Susan calls them “muffin eaters” and I think they make up about 75% of the TS2 audience – the box builder, spyware specialist, *.*Power User, etc. Basically, a low end workstation technician, some have a niche but most do not.

Whose competitor are they?
So these folks that are working 2-3 days a week and bringing in $25-45,000 and likely living paycheck-to-paycheck are probably a client or two away from being out of business. It is their turf that is being attacked by Geek Squad. For example, Bell South DSL installation is now covered by Geek Squad, which automatically gets foot in the door with SOHO. Keeping in mind that the biggest pain point of an SMB consultant is the marketing, exposure and business growth the Geek Squad & Co are immediately and directly impacting their jobs: network provisioning, spyware and virus removal, OS reinstallations, etc. “Your friendly neighborhood computer guy” is being replaced by Geek Squad.

What to do, what to do..
As “Your friendly neighborhood computer guy” finds his market dwindling he hangs on to his bigger clients. Sooner than later, he will take a job with the first one that will offer him one as he’ll have a steady paycheck and not have to worry about business.

The end game
This is where the bigger VARs and established IT companies have a lot to worry about. As Geek Squad drives smaller players out of the market and into employment by 10+ desktop firms, the higher profile IT firms now face another gatekeeper. Because this gatekeeper has a known salary it may be more difficult for the business owner to sign off on higher end work. Moreso, as the gatekeeper is concerned for his job he is likely to oppose any external assistance. This has been the nature of SMB/IT for years.

Are they really your competition?
So is Geek Squad direct competition to most of us? No, they are not. But by eliminating the lower tiers and shifting them into the SMB “IT Guys” at drastic discounts the available market of SMBs willing to make another large commitment (as in buying managed services on top of their “IT guy’s” salary) is eventually going to shrink as well. All at the time that there are major retail providers coming into the SMB, as all software vendors are dumbing down their products to make setup and maintenance easier, and even that bottom tier in retail is getting stronger.

So I hope we can once and for all put to death the questions like “But are they really your competition? Do you really want the business that they are getting? If they aren’t good now they will never learn because they are teenagers?” and realize that there is a bigger picture here that is being painted by the commoditization of our industry and the only hope to survive is to provide a consistent and reliable service at a more than a reasonable rate to keep customers from being interested in an employee, Geek Squad, or a competitor to begin with. So it’s not all doom and gloom, but if you can’t plan a really long term out and think that you can just slightly change what you’re doing now like you did in the past… as this market matures further…. well… my daily plaxo updates from former partners puts the odds against you.