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Monday, August 28, 2006

In the Computer Business, You Need to Provide Services to Other Businesses to Succeed

In order to maximize profits with your computer business, you need to make providing services to businesses, rather than consumers a priority. Providing services to businesses produces a greater profit than providing service to computer business consumers because customers focused on retail only need service once or twice a year, and not on a long-term basis. Businesses provide unique opportunities for any computer business.

EXAMPLES

If your goal is $200,000 annually in pure services revenue for your computer business, you have two options: business to consumer service (B2C) and business customers (B2B).

With B2C services, you might find a person spending $250 annually in services from your computer business. That money will go towards hard drive upgrades, repairs, installation of Wi-Fi or other items. You will need to serve a great number of customers in this category to reach $200,000 – 800 customers. If you are selling only products and don’t deal with a lot of sale post-support, this volume of customers might seem initially to be possible even with a small computer business staff. However, these types of customers will need a lot of guidance from you, and you will spend a lot of money advertising, promoting and marketing your services. Similarly, labor costs will probably be very high if you have to hire a lot of technicians and system engineers in order to meet the demands of 800 plus customers.

The second choice, B2B customers will spend a minimum of $1,000 monthly in order to keep their systems up and running. That means you are making $12,000 every year per customer and setting up long-term clients for your computer business. You will only need 16-17 clients of this type to meet your goals, which is much more manageable than alternatives. These customers will not be looking for emergency service or one-shot deals, rather on-going support that will help them better conduct business. You will also find you have a lot more non-billable time. B2B customers are definitely the ideal clients for anyone in the computer business.

Added By: Computer Consulting 101