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| Author | Subject | Don Wallace
Moderator
(11/30/00 12:00:16 pm)
Reply | Edit | Del All | Buy/start small biz to energize consulting?
I would like to kick off a thread on the following topic:
Is there any usefulness in being engaged in a small business (retail or business to business level) that has wide appeal to many customers and especially other businesses, with an accompanying 'synergism' that the small business would provide a platform for marketing IT consulting services?
The scenario: Set up as a dealer in "X" that businesses buy and use. (Or, alternatively, buy an existing established business.) The exposure and face time with these customer-businesses would provide an avenue to market one's services for (say) software development or web design. The very presence in that business (whatever it is) would provide a degree of credibility in the IT realm.
My motivation for this thought is that I was recently approached by a family member to partner in a fast food business. While I was not interested, the thought that I could 'buy' a storefront or established business got me to thinking about using such a venture as a way to market services and get exposure in the business community w/o approaching clients directly, IE marketing the IT services as a back channel.
The immediate example of such a business is the PC sales and repair shop with the guy in back that does programming. I wouldn't touch PC HW sales with a 20' barge pole, but there may be other business types that would provide a synergy with SW development or internet work.
Any ideas or any examples of someone who's done this? Am I dreaming, is this idea patently idiotic, or does it have demonstrable potential given the 'right' business?
| WebHead
Unregistered User
(11/30/00 12:12:28 pm)
Reply | Edit | Del | A useful site with your services offered?!
Face time? Horrors. I don't want to have to lurk around some storefront on the hope that someone will drop in who will someday possibly have a job for which I'm qualified, during one of those instants that I'm actually on the market. Incredible waste of time.
On the other hand, a web site is "out there" all the time, with no added effort on your part. Imagine that you can invent something that would attract visitors to your web site, that doesn't already exist, that you can promote locally without too much expense. Off the top of my head: a web site where teachers can post homework assignments, parents and kids can check those assignments, and possibly kids can collaborate ( an ezboard discussion group with topics like "Today's math homework!"  ).
You promote the site to area school teachers ("Free service to our great Dayton public schools"), and maybe spice it up with reportage from student volunteers who want to cover the high school's football team.
PROMINENTLY displayed on every page is "This web site was created by Big Don Enterprises, your friendly and economical way to make your web presence felt" (yuck, do NOT use this tag line).
THEN maybe you'll get some parents to notice that there's a web dude right in town, so let's call him when that project at work is finally kicked off.
Probability of success? 1 in 100, I'd guess. MUCH better than sitting in a storefront.
| Cathar
Registered User
(11/30/00 12:16:44 pm)
Reply | Edit | Del | I've Wondered This Myself - A 'White Box' Store
Phew! It feels good to get out of FW.
There is a "white box" PC shop down the street from me that gives me an occasional call on Linux/networking issues. The store is doing a land-office business as it has gotten a reputation for actually knowing how to do PCs right.
The whole setup seems to be a family affair, though. The seedy old guy (Has PC-XT installs written all over him) runs the place. His nice looking wife runs the counter. Chiphead son hangs out in the soldering area talking to all the gamesters. Three daughters build PCs, do upgrades, repair printers.
The family is African-American, and their shop is in an African-American part of town, but the client base is mostly White. They have two subcontinentals doing custom Access/FoxPro programming for them. Still, I don't think there's that much money involved. Small business/Home office/Rad Gamester type clientele.
In each market, everyone knows where the real money is. In O-town, its NASA, Da Rat, Martin Marietta, Harris, etc. If you want the SOHO market, its yours, but it takes a lot of crumbs to make a decent meal.
| TomScott 
Moderator
(11/30/00 12:23:01 pm)
Reply | Edit | Del | Re: Buy/start small biz to energize consulting?
One of the things that kills off businesses at a rapid pace is lack of focus. There are few companies that can merge disparate interests and actually achieve any level of that over-hyped concept, "synergy".
Usually, when businesses search for synergy, two good businesses become one mediocre business.
Ask yourself what your reaction would be if you went to a fast food restaurant and the owner said to you, "Oh yeah, I fix cars, too. Why don't you bring yours over, and I'll replace your transmission?"
If people are good at something, they usually figure out a way to make a full-time living at it.
More info on Scott Consulting, Inc.
| Bigman
Registered User
(11/30/00 12:23:43 pm)
Reply | Edit | Del | Re: Buy/start small biz to energize consulting?
Don, here are the first impression, a criticism, and an example of what I think you're asking about.
The tone of your post carries with it IT as a side job, and 1) I don't think that is what you intend, and 2) as a client, I'm not going to hire someone to do anything important who doesn't do it as a primary career. Think about it, would you buy stocks from a broker who has all his money in real estate? Secondly, as a client I'd wonder how on earth you would have the time to basically be involved in 2 careers.
I hope this doesn't sound like a slam. Many of your questions seem to boil down to how can I get the benefits of networking and marketing without having to change and risk rejection in your marketing efforts.
I have a friend who works for a company that sells fail-over software. However, the fail-over company only wants to do X in a project. Quest, the local phone company wants their software, but wants X+Y done. So, my friend and his boss are taking on the Y component by themselves at a very lucrative price, and are pushing the fail-over solution to other companies which at the very least leads to more X and may also lead to more Y. Now, my friend has always networked with the IT people in Denver, has been in that market for 10-12 years, has built a good reputation, and works as a FTer for the fail-over company and does the other on the side.
So, maybe one way to increase your opportunities is to find a salesperson that you can "trust"(because that's what scorpions do story), and a software product that you can push that needs customization, or installation beyond what the software company is willing to provide, or that lends itself well to other work.
Dan "I'm not an expert, nor do I claim to be one, just one opinionated opinion"
| Don Wallace
Moderator
(11/30/00 12:37:29 pm)
Reply | Edit | Del | Re: Buy/start small biz to energize consulting?
how can I
get the benefits of networking and marketing without having to change and risk rejection in
your marketing efforts.
Not exactly (of course you knew I'd defensively say that...) I am 'changing' (attending a local club with bi weekly meetings to improve my presentation skills) but I am stymied by two things: 1) the long lead time of any networking; 2) not really knowing where the money is in my area in IT. I've had my head in the sand so to speak for several years and I do have a local network but it's mainly a series of dead ends.
I'd like to stay "geek" but not be exploited. Buying into a business and actively managing it seems like it could be a plausible middle ground to gain that leverage. I also seek diversification of income, which being joined at the hip to IT alone does not imply.
Good thoughts on the product installation & dealership angle.
| Don Wallace
Moderator
(11/30/00 12:54:24 pm)
Reply | Edit | Del | Lack of focus vs. diversification
I hear you... on the other hand, a LOT that is going on in IT today makes me really uncomfortable. We have the H1-B pressure (which, although it does not impact someone with real experience all that much in most cases has the potential to add a lot of clutter to the hiring scene), and the prospect of the dot com market tanking. The point is, I have all eggs in one basket career wise and that fact makes me uncomfortable when combined with the free spending idiocy of the dot coms.
I am thinking along the lines of diversification and then trying to eke out an incremental advantage from that diversification. But maybe as you imply I would be better off separating the goals, pursuing each separately, and not mixing the message, unless the synergy were very apparent (IE: SW product dealership + customizations).
| David Cressey 
Registered User
(11/30/00 12:58:23 pm)
Reply | Edit | Del | Re: Buy/start small biz to energize consulting?
I think it depends on the degree of "synergy" involved.
A fast food place doesn't sound like there's much synergy with IT at all: "I'll take a big burger and a cup 'o java. Oh, and that reminds me, I'm also looking for some custom application development." I don't think so.
I've seen a local PC place in the Springfield (MA) area advertise their consultants quite heavily. They've got the storefront, and they've got the IT connection, but, somehow, I can't imagine a business responding to their ads. It's not that they seem incompetent. It's just that they seem consumer oriented. Maybe I'm wrong, maybe other businesses do, in fact, deal with them. Hmmm.....
The very best compination I've seen was a fellow ICCA member that I ran into in a national conference. His local business was telecommunications: everything from leasing FAX machines (about twelve years ago) to setting up private exchanges, to, increasingly, providing network services for computer networks. The guy also had a computer consulting shop in his store. It was growing, but not as fast as the rest of his business.
I haven't had any contact with him since the internet explosion, but I imagine that his business is either thoroughly entrenched by now, or has been bought out.
Regards,
David Cressey
Not all those who wander are lost.
| Bigman
Registered User
(11/30/00 1:00:54 pm)
Reply | Edit | Del | Re: Buy/start small biz to energize consulting?
Hehe, kind of like when you point out a bruise to a friend, and they poke it. I knew you were starting TM and some other things etc., but the post started to get long, and I didn't think you'd freak or anything, so I just let it fly.
Right now, I do Oracle pl/sql programming and reports programming. It pays the bills, and it is Oracle, but when you tell of your travails in the GUI/desktop programming world, some of it rings true for me too. It seems that there is a continuum of volitility in the IT world. Web/desktop apps with language of the week, server apps same problem, database progs, systems admin/software. So, I'm trying to get into the systems end of IT to move away from the volitility of language/tool popularity. Our current Oracle dba was previously a DB2 dba. It wasn't a huge change. Unix has been around for quite a while, and it doesn't look like it's going anywhere soon. So, a business that had a custom app written in delphi a few years ago, then the next one in vb, is looking at java. However, in that time, they probably didn't change OS/hardware or database vendors. So, I expect that while there is a lot of money in application development, there is more stability in system work. Additionally, there are more custom applications written than systems applications so if you try for something like my friend, I'd advise looking to the systems end of IT. Additionally, I have another friend who is part of an IT sales team, and he gets to do demos and installs while making about 2.5 times the money he was making as a coder(FT). Finding a FT job doing this would also do wonders for your networking.
Just some more thoughts.
Dan - my opinionated opinion
| Farnorth
Registered User
(11/30/00 1:09:08 pm)
Reply | Edit | Del | Re: Buy/start small biz to energize consulting?
I've seen one small company that could have such synergy if they ever chose to pursue it: Digital document production and scanning. These people hire minimum wage labor to run state-of-the art scanning and digitizing systems. They go into government departments, large businesses and legal offices (for lawsuit document production) to scan large volumes of documents for digital word search or archiving. These are all companies who probably have large IT needs, and they're already in the door.
They usually work with off-the-shelf software, but some clients either want the software modified or want the data loaded into their own databases. For that component, this particular company always has to find an IT contractor to do the work. The inverse is that many IT projects have a document, archival or legacy data aspect and this company is often an IT subcontractor for those projects.
Another aspect is that the vendors of the software they use do some of the marketing for them.
But it really would be a full-time business to do it well. And I'm assuming you've already got a full-time business, Don. My husband's company keeps looking at this symbiosis, but haven't committed yet because of the time/resource commitment.
| Don Wallace
Moderator
(11/30/00 1:09:11 pm)
Reply | Edit | Del | One of the fastest growing threads I've seen...
And it wasn't even about the damn election! Thanks everyone, keep it rolling, good advice here...
| Anton
Registered User
(12/1/00 1:35:22 am)
Reply | Edit | Del | Don, my advice...
I experienced quite a bit of success by being seen as sort of the "guru" for various companies that can make magical things happen. I did a lot of work for local government, and although I wasn't a stellar performer (IMO), I was alot better than 99% of what they had and had seen before. I got more work through them recently... I just finished a fixed bid project for about $30k, where I probably netted an hourly rate quite a bit over $100/hr. The point is that the first, and best, way to get work is through word of mouth.
The second best way to get work is by finding prospective clients on your own. I do this by trying to figure out companies that brokers are advertising. For example, if they say "small toy store on the south shore", you can narrow it down enough to figure out who it is. Or, you can be more sneaky and call the broker and feign interest, and then when they tell you the client, tell them you're already been submitted there and thanks-but-no-thanks. Depends on whether your ethics allow for this.. I don't think it's any worse than what the borks do, personally.
I've found that once you are "in the door", you need to feel out the clients needs. And I don't mean technical needs. I have a client now who just wants me to be there hourly and to do whatever they ask. We have a nice arrangement... I work 99% offsite, and they keep me busy 20 or so hours a week. They don't ever care about how something gets done technically, and they don't have ANY of my type of experience in house, so they just want to "black box" everything - sort of a "just make it happen and send us a bill". The project I did for them just became a huge project, and now I'm working about 30+ hours a week for them - with about 1 hour of onsite time per week. These guys sometimes frustrate me by changing specs, or by changing their minds at the last minute, but I don't care, because they pay hourly, and they pay handsomely, and they pay on time.
This is getting long... I think you know what I'm saying. Use the two methods to get work I listed, and you WILL get a lot of work, especially from #2. Practice selling yourself as a SOLUTION to *THEIR* problem (regardless of whether they explicitly state their problem or not), and they will keep coming back to you.
| Janet Ruhl 
ezOP
(12/1/00 9:10:33 am)
Reply | Edit | Del | Storefronts
Don,
One issue to keep in mind is the huge loss of freedom you experience when you commit to a store that has a storefront. You (or a paid minion) have to be there during your open hours and you have to be consistent with those hours.
This is an issue where personality makes a huge difference. I start feeling like an ADD kid after 15 minutes of watching a booth at a crafts fair. Two hours of minding Peter's studio during the busy holiday season gets me thinking of running away from home. There's something about being trapped in a room without the ability to do real work tha drives me nuts. I could handle it if I could sit at my computer and play (work ), but even so, I'd hate having to be there when nothing was going on, and in retail there are a lot of times when nothing goes on. Plus, I do not enjoy having to chit chat with strangers who I hope will buy expensive stuff. I'm much happier selling to an invisible clientele here on the web.
Other people, though, are just the opposite, and love sitting like a spider in a web waiting for folks to drop by. You'd have to have a good idea of your own personality before you committed to what is really as much a lifestyle as a business.
As far as synergy goes, it can work. Peter gets customers for his wallpaper contracting business from people who stop by his pottery studio. The two aren't related, but people who see the high level of his craftsmanship in one area obviously assume he must be meticulous in all the does (and wallpaper customers are the world's pickest folk!) However, like everyone who sells services, he gets most of his work from a network of general contractors, not the public. I don't think you'd bring in enough clients for consulting through most storefront businesses.
| Don Wallace
Moderator
(12/1/00 11:58:58 am)
Reply | Edit | Del | Let me fine tune what I was trying to express...
Hi Janet,
I think the majority view expressed in this thread is that a side business would be a distraction and/or would create an impression of lack of dedication in the minds of customers or potential clients of the consulting side. OK, fair enough...
My rebuttal to this is that it's "pretty hard" (in my several years of independent experience) to simply market a software service without anchoring it with *something* that is more tangible and product-like than a hypothetical and difficult to quantify service to be delivered in the future. That's WHY most of us work through borks.
So, I'm not literally talking pizza or snack shop here... I'm talking more (I think) about service businesses that already are at the fringes of the software and IT world, at least in terms of the "benefits" that the business delivers to customers. I was thinking more of selecting a business (storefront or not) that could potentially have software or internet tie-ins that would appear "logical" to the customer base.
Here's a specific example: one of the sysops on the CONSULT forum on CIS had an accounting source code package (marketed primarily to developers, not end users) which generated a stream of leads for custom SW development. The product created credibility for service based work. This is an example of a "vertical market" application business (really! - a friend pointed out to me this week that developer's tools ARE a vertical market in their own right, not a special case of anything, really.)
More cogent examples of what I was thinking along with a tag line:
- Signmaking, engraving or printing business ("we also develop web sites to promote your business")
- Seller of specialized telecom or phone related products ("we develop custom telephony applications to make your business more efficient") (this idea was inspired partially by David Cressey's post)
- Dealer in specialized vertical market SW or HW products or services (per Bigman).
Lastly, as I stated in another post, I'm looking for a degree of "protective" diversification (find a business form that generates some income without being anchored to IT/internet nuttiness).
None of these ideas may be realizable in practical terms, but the point of brainstorming is to toss out 1000 ideas, 990+ of them crud and one or a few that are keepers...
I turn the floor over now...
- Don
| TomScott
Moderator
(12/1/00 12:22:18 pm)
Reply | Edit | Del | Another thing to keep in mind...
...is that the risk/reward ratio applies to this as well. If you buy an individual stock, your risk is very high, but your reward me be correspondingly high. If you can't deal with that risk, then you invest in an index fund -- you're diversified, but your return is much less.
It's the same with owning a business. There, you invest all your assets in one "stock", and the risk/reward ratio is very high. If you diversify, you may reduce your risk, but your return is likely to be lower as well.
The highest danger is actually in a "portfolio" that is in between no diversification at all vs. one that is highly diversified. Why? Because that's a portfolio that the owner may not be able to manage fully, i.e., the owner fails to keep track of all the factors that affect each individual stock, and therefore has the risk of a totally non-diversified portfolio, but the return of a diversified one at best.
This is why it takes a lot of skill to manage more than one business that is not directly related, and why the results are often disastrous. I'm not saying it can't be done (Jack Welch at G.E. certainly managed to do it), but it's hard.
Hope this wasn't hopelessly abstract!
More info on Scott Consulting, Inc.
| David Randolph
Registered User
(12/1/00 3:15:47 pm)
Reply | Edit | Del | So which one will fail?
I have a friend who tried to start one business to get his foot in the door with customers so that he could sell computer services to them. Both failed.
The problems were two fold: 1. It is very difficult to start one business and make it succeed let alone two. 2. He was marketing the wrong stuff to the wrong people.
Lets talk about the issue of networking. One of the harder things to realize when everyone is talking about the benefits of networking is that you have to network with the correct people. It doesn't help to network with sales people when your income comes from hiring managers. Yet, the people who understand the networking value often are those sales people and they have forums for you to come and "network" with them.
Networking for technical people is different than networking for sales people. It seems to take an extra effort for technical people to get out of the office to talk to other people. However, we can communicate great over BBS's and forums like this.
So, who are your potential customers?
What are they likely to buy? Is what I want to offer something that they would want to buy?
Where and how are they gathering?
How can I get my message out to them?
You might find that going to all the user group meetings in your area is a better way to network than what you have been doing. I found that the local Chamber of Commerce was a waste of my time as far as networking went. The local ICCA meetings are more for my benefit than for finding customers. In my case, I'm finding that sending stuff out on paper is as valuable as face to face networking.
| David Cressey
Registered User
(12/1/00 11:54:14 pm)
Reply | Edit | Del | What's a "white box"?
Pardon my ignorance, but I haven't heard that one.
Years ago, in a former life, we used to call a circuit whose components were unknown a "black box", and a circuit whose components were known a "white box". But it sounds like you are using the term to refer to something else.
Regards,
David Cressey
Not all those who wander are lost.
| Cathar
Registered User
(12/4/00 9:43:45 am)
Reply | Edit | Del | No-Brand PeeCee W/ Off-The_shelf Components
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