This is really making us think about how we stay in touch with our community of the increasing number of companies in the IT Solution Provider industry that are using the Corelytics Financial Dashboard.

If you have hesitations about getting into blogging because you think it might take a lot of time – Posterous should eliminate that excuse — if you can send an email and attach photos or video to an email — you can blog.

We would highly recommend Posterous to anyone thinking about starting to blog!

1. Lost a big client and revenues are down significantly – a big hit to revenues makes the most experienced business owners scratch their heads thinking where they might make up that gap
2. Trouble engaging in marketing campaigns that result in business – this is especially true for IT service firms who have not had to market services in an organized way before
3. No clear picture of financial needs for business to grow – having no understanding of the financial requirements to grow a business to the next stage often keeps businesses on a plateau they feel they are unable to move to the next stage
4. Unable to make the transition to managed services revenue model – the entire industry is putting pressure to move to managed services (for great reason) and some IT service providers are having trouble making that transition and getting left behind
5. Worried about the economy and ability to sustain your existing revenues – the economy always fluctuates, everyone is living in this new reality so you are not alone.

Whatever the reason you think you may want to sell, let me encourage you not to sell – why? – because the best time to sell is when you do not need to. This will ensure you do not take less than what your business or revenue is worth. If you are thinking of selling your business, do yourself a favor; spend 90 days to polish it up prior to the sale.

• Evaluate your current client portfolio to determine how much value (in monthly revenues) exists – this is what a buyer will most certainly ask, so you might as well have a clear answer. Read Portfolio Basics: Analyze Your Client Portfolio
• Contact each of your active and inactive clients to let them know you need to put all your clients on a monthly service agreement of some kind – no need to tell them the reason for this, but operating under service agreements is good for both of you. Read What Should My Marketing Be Doing Anyway?
• Transition as many existing and new clients onto a monthly service agreement as possible – the more revenue you have on contract the more you can expect to get for your business. This may require investing in a product like ConnexIT psa software (even if only for a short period of time) Read Selling Made Easier

Some of you reading this may now be thinking that selling your business is a lot of work – it is true, if you want to get a good price. Others reading this may think that if I am going to put that much work into this, why not keep the business – good observation, that too is true and the above steps would help you tremendously in growing your business.

The point is, figure out what you want to do, then spend the right amount of care and effort into going for it. You and your business are worth it.

Here are seven simple tips for blogging your way into your clients’ (and search engine!) awareness:

1. Stand out in the crowd. If you write about the same things other people write about, then you offer nothing new – and people want to read something new. Be sure to offer fresh ideas to your readers in every post.
2. Don’t be too formal. Unlike the conventional approach to website content, blogs offer a more informal and relaxed medium that your customers can relate to on a more personal level.
3. Use the right keywords. Including targeted keywords in your content will make your blog more searchable by search engines, and more likely to pop up in users’ searches for your subject matter.
4. Host the blog on your own domain. This gives you the SEO benefit from the traffic the blog will generate. Also, make sure that the blog is easily accessible – fresh, regularly updated content is useless if it’s hard to find.
5. Be active. Promote yourself in social networking sites and other blogs, as well as discussion boards and forums related to your market and audience. If your content is good, and the blog regularly updated, people will keep coming back and the search engines will notice.
6. Invite popular guest bloggers. Seek out established bloggers and invite them to publish a guest post on your blog. This will help attract their followers to your blog. Just make sure that you iron out details with guest bloggers, such as your right to edit their content if necessary.
7. Exchange links with other blogs. You scratch their back, they scratch yours. It also helps to attach your blog URL in your email signatures and your signature in discussion boards and forums. If you’re targeting local traffic, seek out link exchanges with local outfits as well. Inbound links are one of the keys to getting to the top of search results.

To be sure, blogging can be hard work, especially if you’re just starting out. But if you play your cards right, you can build a sizeable audience that will make the effort well worthwhile and help drive your website to the top of the search results.

You can always go to the Pronto Marketing website if you would like to learn more about us.

If we take a closer look at what clients perceive as determinants for what they pay for services it becomes clear to see how, given the opportunity, it will be easier for the client to make a case for negotiating lower prices.

Determinants of Price – Defined Units

• Number of servers
• Number of work stations

Think about it this way – if clients are making adjustments in budgeting for services and there is an option is to choose between what they perceive as a lower available price for the same services, same quality of service supporting the same number of machines there is a stronger chance they will ask for lower unit prices.

However, if pricing has been based on defined responsibilities the client usually equates the value of the IT service firm to their business differently. It becomes more difficult to eliminate business responsibilities that have been defined as necessary than it does to negotiate a lower price per unit.

Determinants of Value – Defined Responsibilities

• Services provided (some services are managed and defined by a number of units)
• Devices supported (tracking the number and type of devices is still required)
• Scheduled on-site support
• Management services
• Operational scope of support (regular hours, response times)
• Location coverage
• Technology usage (defines how aggressive the client is at using technology)

CoreConnex offers an IT Services Pricing Calculator as part of our ConnexIT psa software subscription that calculates a monthly price based on the defined responsibilities entered into the calculator, but this is something you could create on your own.

Pricing services based on value is not about gouging the client for more money, it is about defining your relationship with the client so they see you as more than a unit cost that can be negotiated lower. Too many clients are not presented with value and only given unit costs – they forget the value of their IT partner and sometimes need to be reminded that you are not just a mechanic that fixes boxes.

Entrepreneur - envisions the future, but lacks execution

Manager - organizes everything, but forgets the big picture

Technician – gets work done, but to the detriment of all else

Each personality or person in these roles needs to each push beyond their comfort zones in order for the business to be successful at the next stage. So how should you push your business beyond its comfort zone? 

Take some time to think through how these personalities or people playing these roles can push past their current comfort zones – here are some tips.

Give the Entrepreneur a business dashboard – by having a quick, easy to understand financial dashboard of where the business is and where it is headed the Entrepreneur is free to implement his next idea with the Manager operationalizing it for him.

The Manager must tie operations to company goals - connect the Entreprenuer’s vision to performance goals for the business and make certain the Manager understands how she is going to organize the people, processes and systems to meet those business goals – she might try using a professional services automation platform to accomplish this.

Schedule all the recurring work for the Technician – have a work plan for the Technician where time is blocked off so they have structure to their day. Any recurring ‘maintenance’ work should be pre-scheduled by the Technician so they know what their daily priorities are and how they can work around them.

Once you understand who is driving your business, who is supporting the operations of your business and who is handling the technical work it becomes easier to make sure those personalities or people are given what they need to push beyond their comfort zones and grow the business.

• The need for better processes is clear, but software solutions are not a silver bullet
• Managed Services promise higher revenues, but disappointing stories are everywhere
• All the solutions that led to today’s success are no longer adequate for future growth

The research on system solutions begins:
Due diligence is done, a list of needed features is created, a budget is thought about, ‘price’ is defined as a driver, and a rough deadline for implementing a new system is put on a sticky pad somewhere.

The search for the right system begins:
Vendors and features all start to blend together, pricing gets confusing, frustration sets in and paralysis follows – the business suffers.

If you can identify with any of these problems and are looking for a professional services automation (psa) system to be your answer – stop!

What you need is to integrate your processes and existing systems and create a comprehensive business deployment plan for the psa software solution you think you want to implement – don’t get caught buying a system with cool features if you don’t have a plan for implementing it in your business.

Business Intelligence is not a new concept. In 1959 IBM researcher Hans Peter Lund defined BI as… “the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal.” Now, more than any time, your business depends on you (the owner) to quickly make decisions and cut through the fluff. BI gives you the information you need in a manner that brings clarity to your management process.

What are the benefits of BI?

• Visibility – get a clear picture of financial movement and relationships
• Decision Making – make decisions about high business priorities faster
• Management – view relevant information without wading through the weeds
• Goal Tracking – understand realistic targets and track progress
• Trend Monitoring – stay tuned to relevant trends in your business and industry

There are three categories of BI becoming more available today you should be aware of as your business evolves a) financial b) operational and c) competitive/industry. This post addresses the basics of financial BI, but watch for future posts that discuss other areas of BI. A lot of people we run into think that since they get reports from their accounting system there is no need for BI, but traditional reporting gives ‘snapshots’ of information and makes it more difficult to see key relationships and trends you can only get with BI. First, set goals for your business then monitor it.

What financial BI should I care about?

• Revenue growth compared to expense growth – expenses should not outpace revenues
• Expenses as a % of revenue – the relationship between the two should be consistent
• Gross margins (growth and % of revenues) – margins are a gauge for profitability
• Profit by line of business (growth and % of revenues) – everything you do needs to be profitable
• Revenue per billable FTE and Employee – make sure you know how to cover the next hire

The Corelytics^TM financial dashboard CoreConnex offers is a great example of an affordable financial BI tool. There are also programs like VitalSigns offered by SMBTN to guide you through integrating BI processes into your business.

The key is to become knowledgeable about this subject because it is a trend that is not going away. Competition is increasing and the winners will be those companies who understand how to quickly see the trends in their business, make the necessary decisions and take quicker actions toward achieving their goals.

• Be a part of their business team
• Coach them on changes in technology so they are aware, but not overwhelmed
• Stick to planned budgets – monthly budgets work best
• Take responsibility for making their technology run smoothly and reliably
• Be proactive in managing relationships and communications

We interviewed several business executives who are clients of successful IT service firms – watch this video to see what really matters to them.

So I worked with the owner of the IT service company to create specific objectives that could be monitored individually and together would allow him to achieve his overall goal. We came up with the following three main goals:

Goal 1:
Increase revenues by an annual rate of 18%. At his present size, he would need to add two new clients per month at an average of $1,200 per client per month to achieve this.

Goal 2:
Keep annual expense growth to 15%. Since his previous year expenses had an annual growth rate of 25% he wanted to reduce overall expenses by 10% for the year.. I reminded him that he needs to watch this carefully because if expenses grow at the same rate as revenue there is no increase in profitability and that 3% difference in revenue growth does not leave a lot of room for error.

Goal 3:
Increase billable hours by 5%. Through the use of improved scheduling and remote access. Since the majority of his clients are on hourly billing arrangements this was a relevant goal. He is exploring how to transition his business model to monthly service fees for clients in the coming year.

Of course we had to do some number crunching to make sure these goals were attainable so he could achieve the desired result. But, like many other small business owners, he had been managing his business using instinct, past experience and monthly reports from his accounting system. We plugged in the Corelytics Financial Dashboard to simplify the process of tracking and monitoring his progress toward the goals he set for his company. Now he has a solid plan for the future and the tools in place to stay on course.

Make sure you are not only declaring goals for your business, but that you have a way to measure your performance on a regular basis throughout the year.

Let me elaborate; I put on my Negotiation Coach hat during the discussion I overheard and here is what I noticed – #1 Guy started by asking #2 Guy what their next move should be at the bargaining table with a counterpart. #2 Guy complained about the personality of their counterpart. #1 Guy agreed with the personality assessment and added a few choice words about the behavior of their counterpart. #2 Guy then added that their counterpart’s requests were completely unreasonable. And on it went for 15 minutes.Ok, maybe these two lawyers were blowing off steam, but they did not get anywhere in planning the next negotiation meeting with their counterpart.

They let the behavior of their counterpart drive their perception of the request that was made. At no time did they discuss what was motivating their counterpart to make that particular request. Their decision about what to negotiate for during the next meeting could have been being based off of the wrong assumptions instead of motivating factors. It is ok to blow off steam regarding someone’s personality (not all personalities click), but when negotiating a deal or agreement, focus on what is motivating the other person and not their personality.

The first question to ask your self is what is DRIVING this behavior, position or tactic – what is motivating the person I am negotiating with? Getting to the bottom of those issues will prove to be worth your while during your next bargaining opportunity.