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KPEnterprises was a Small Business Specialist for ten years before Microsoft created a certification for it! Quick Links
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Out Karl's Blog at
http://smallbizthoughts.blogspot.com/.
Tips for Small Business I.T. Consultants
Consider Outsourcing
Meet Dave Sobel: The King of Outsourcing
Let us worry about the computers so you can get back to doing what you do. Since that's the way we sell ourselves, and that's the way we talk about ourselves, it's easy to draw the conclusion that we believe in outsourcing. But do you really believe in outsourcing? Let me introduce you to a consultant who has embraced outsourcing as the most efficient way to run - and grow - his business. David Sobel of Evolve Technologies in Fairfax, VA says "It's my goal to outsource as much as I can." What does Sobel outsource? Like most of us, he outsources payroll. But Evolve Technologies goes beyond that. They outsource virtually all human resource functions. But that's the tip of the iceberg. They also outsource the entire accounting function as well as sales, public relations, and marketing. But here's the topper: Evolve Technologies outsources their data center as well. As geeks, it's pretty much assumed that the one thing we can do ourselves is the data center. Sobel disagrees. Just like everyone else, he wants conditioned power, climate controls, massive bandwidth, and the whole package you get with a "real" data center. "Why would I do that in-house?" Sobel asks. He has only one server in his office: a desktop-class machine with Windows Server acting as a domain controller to speed up logons. "If we lost that machine, we'd just throw up another. All we'd lose is speedy logons." Evolve Technologies' servers are housed at a local data facility. They have a full rack with eight physical servers. In terms of overall architecture, those eight machines are just servers running Virtual Server. Every business critical function is on a virtual server, including ConnectWise, the professional services application Evolve Technologies uses to manage service tickets and technician scheduling. Evolve Technologies uses an Asterisk open source PBX / VOIP system. Because VOIP telephones can check into the virtual PBX from anyway, there's no reason for this system to exist at the office either, so it's in the rack with everything else. The final piece of equipment in the rack is a Watchguard firewall with a dedicated VPN connection to the office. The office LAN is on the same subnet as the rack in the cage. "We manage all those servers remotely," Sobel says. "It's a great setup." Getting Started Evolve Technologies started down this trail when they signed up with Paychex to do their payroll. Because their market is the Washington, DC area, Sobel explains, they have three sets of state laws to deal with, as well as the federal laws. Employees can be in any jurisdiction. Paychex manages all of the reporting, deductions, etc. In addition, Evolve Technologies relies on Paychex for their H.R. handbook and sexual harassment training. Paychex helped them write their H.R. handbook. And now they assist with quarterly business reviews as well as hiring and firing processes. Sales outsourcing is something most small businesses haven't tried. Or, if they've tried, they taken the wrong approach. "The wrong approach" consists primarily of giving up without giving the program a proper chance. Evolve Technologies has committed themselves to spending $5,000 per month on their sales activity. They have engaged a local firm that builds lists and makes sales calls on their behalf. They have an assigned sales person. In addition to sales, the firm calls people to attend their seminars. Sobel explains the strategy, which is pretty clever. First, the sales firm creates lists of about 150 people each. Then they call down the list and try to get attendees to the Evolve Technologies seminars. Evolve Tech holds regular seminars. So the probe for the sales folk is "Tell me about yourself and your company so I can invite you to the good seminars." Once the request is focused on the prospect, and doing a favor for the prospect, then the prospect is more likely to open up and give a list of everything they need, and everything that's important to their business. In addition to sales, Evolve Technologies outsources public relations. This includes press releases and media advisories. In general, says Sobel, "They get us in the press." Mentions in the media are good for client relations. Overall, they make it easier to paint yourself as an important player in the technology arena. That, in turn, makes it easier for the sales people to brag about you. In addition to everything else, Evolve has a barter relationship with a local printer. This includes sales brochures, folders, etc. They have a separate deal that includes basic printing such as envelopes and stationary. Costs As you can see, there's a lot going on here. Let's tally it up. The annual cost for all this is a whopping $130,000 per year. Now, if you're like most of us in this business, that would get you two fulltime people. And, to be honest, the hassles of managing two fulltime people. But, of course, it would be very difficult to find two people who could accomplish all these things. Instead, Sobel engages a series of professionals who operation at a higher level than he would be likely to get from someone in-house performing a variety of chores. Now for the good news: there are offsets. First, the cost of a T-1 is about $ 500/month, so the overall cost of the data center hosing is not significant. The sales company is also a client. Their managed services contract is worth about $2,400 per month, which is almost half. The P.R. agency is a completely bartered deal, worth $2,000 a month. The marketing printer ($1,500 plus $500) is also a totally bartered deal. The total offsets are more than $80,000.That brings the out-of-pocket commitment to about $50,000. Don't Miss The Big Point! I'm not saying that you should go out and do all of this. Obviously, this massive combination of tactics evolved over time. What you can do is to get started. Make a plan. Begin to do something. And make a commitment to it. It does no good to say "When I'm as successful as Mr. Sobel, then I'll spend money on marketing and sales and P.R." That's just silly, of course. Evolve Technologies didn't get into their current position by accident. They got there because Sobel made a commitment to his future and has followed through on that commitment.
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KPEnterprises Business Consulting, Inc. Phone 916-928-0888 / 800-822-3585 2121 Natomas Crossing Dr., #200 / PMB 345 / Sacramento, CA 95834 Send
mail to sales@kpenterprises.com
with questions or comments about this web site.
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One way to describe
what we do as SMB consultants is to say that we are "outsourced I.T." The sales
pitch goes something like this:
