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Saturday, June 10, 2006

Computer Business: The Importance of Services for Other Businesses

In order to make the most profitable computer business possible, you have to start providing services to businesses and not just consumers.

Retail customers need service once or twice a year and will not need your service on a long-term basis but businesses will rely on you more heavily. For example, if your goal is to have $200,000 per year in pure services revenue for your computer business you have the following choices:

1. For retail-oriented clients, you can provide business to consumer (B2C) service. The person will spend $250 a year in services from your shop on hard drive upgrade, repair, installing Wi-Fi equipment, running a Cat 5 cable, etc. You need a lot of these customers in order to reach your goal. The customer might seem easy to manage with a small staff, but in reality this type of customer needs a lot of handholding. Plus, it will cost your computer business a lot in marketing and promotional material along with labor.

2. For business clients, business customers (B2B) committing to spending approximately $1,000 per month every single month will add up quickly. This means minimally per customer you are making $12,000 annually for your computer business. You need only 16 or 17 of these customers to reach your goal, which is a far more manageable number than the 800 retail client you would need. These businesses become a lifeblood, no longer based on transactions or one-shot deals. You will also gain less non-billable time, which allows you to maximize the efficiency of your computer business.

Added By: Joshua Feinberg