If you own or manage a small business, please take this survey

[SagaLore]

I'm planning out a business strategy for starting an IT Security consulting company. I'm finding that there are plenty of consultants and consulting companies along the east coast, so I'm not going to try and exist mainly on one-time customers.

I'm aiming for repeated business. I'm looking at becoming a VAR (Value Added Reseller), where I choose certain product brands to fill customer needs. My ultimate goal is to rebrand most of the products under my company name, and use my own support department to take care of customers.

My target market will be small to medium size businesses. Where I live the cost of living is relatively inexpensive, and one of the local colleges has a new IT security degree. Within several years there will be a lot of educated people needing jobs, and I could hire them with a lot less salary overhead than most companies in the Big Cities can. This will be a benefit to my small business customers that normally wouldn't afford the top vendor prices from Symantec, ISS, etc.

 

[NikPreviousAcct]

Voted.

 

[JRock]

Voted

 

[kranky]

I can't answer your survey questions but I can pass along what a good friend told me. He works at a bank, specializing in lending to small/medium businesses, and he's also very tech-savvy.

He tells me that most small/medium businesses don't even grasp the security concept. Most do not have an IT person, and do one of three things.
1. Buy their comps locally and get support from that guy
2. Buy comps from Dell/HP/CDW and get support there.
3. Buy comps from BB/CC/OM/OD and rely on someone in the company to do support.

If the owner isn't technically knowledgable, they see IT as a sinkhole of money with no real return. Now, there are some who understand it better and they generally contract with one company to provide comprehensive support - they don't separate "helpdesk" and break/fix and security across different companies.

And most of these smaller outfits don't even have a comprehensive backup strategy (i.e. no offsite storage, no testing of restoring files, irregular backups, etc.) so it's not just security they are ignorant of.

The small/medium businesses are underserved, but it's a tough sell. They don't want to spend a lot of money and they don't want to work with a bunch of outfits for IT needs. Have you considered partnering with another company? The other company might benefit from being able to advertise more comprehensive services, and you could benefit from having customers handed to you.

Hope this helps. Best of luck with your new venture!

 

[SagaLore]

I added one more poll.

 

[SagaLore]

Originally posted by: kranky
Have you considered partnering with another company? The other company might benefit from being able to advertise more comprehensive services, and you could benefit from having customers handed to you.

What I could do is establish partnerships with various Computer Shop / IT companies that would get a commission off referrals.

 

[AgaBoogaBoo]

Voted in the poll and had a few small things to say.

Today when an airline company buys an engine from GE or Rolls Royce, they also buy some sort of maintenence plan. Now they are charging them per mile or something and maintain the engine for the airline completely. This way the airline company does not have to stock parts, employees, etc. and can concentrate on the service and not have to worry about things like the engine.

Providing an initial solution with the product (engine) the company wants and then also selling it to them in such a way that it's hassle free and economical for them because of your upkeep/maintenence plans will give you an edge over the competition. For many companies the actual revenue comes not from the sale of the products, but rather the services rendered in relation to the product after it's purchased. Somewhat similar to gaming systems, Microsoft doesn't make money or maybe even takes a hit on the gaming system in hopes you will buy the games.

 

[SagaLore]

Originally posted by: AgaBoogaBoo
For many companies the actual revenue comes not from the sale of the products, but rather the services rendered in relation to the product after it's purchased.

Bingo. The goal is annual renewals and support contracts.