Vendors and their partners have put much effort into tapping the small-business IT market. After all, it makes sense to pursue this space, which makes up more than 70 percent of business in the United States. But there seems to be a major problem fully addressing the needs of those companies and getting small-business owners to loosen their purse strings for technology investments.
I have spoken to many VARs about this very subject, and most agree on one thing: Vendors have to stop looking at the small business as a "little enterprise." Selling solutions into the small-business market takes much more than just shrinking down an enterprise product to fit the needs of a reduced user count. Vendors need to think about that when developing, pricing and delivering products. What's more, if a VAR is focused on small business, the vendor needs a channel program that fits a lower volume and lower revenue model and offers additional support.
That is especially true when one considers the ultrasmall or home-based business with fewer than 10 users. The key here is the user count, not the overall employee count. What makes those types of businesses so unusual and difficult to deal with?
First off, SOHO (small office/home office) business owners look at every expense as if the money is coming out of their own pockets—and, in many cases, it is—instead of the business operations budget. Second, most SOHOs don't have a formal budget; many fly by the seat of their pants. That, in turn, creates a feast-or-famine style of business. In other words, VARs need to hit those businesses with new technology solutions during the feast stage, when money is readily available. Third, most SOHO owners are very protective of their data, so VARs looking to act as an MSP (managed services provider) or sell SAAS (software as a service) are doubly challenged. Sure, those same SOHOs readily pay for phone, Internet and electrical service on a monthly basis, but there is a major difference between paying for utilities as opposed to IT services. With utilities, business owners have no choice in the matter; they must have their phone and electrical services. (Internet service is debatable.) SAAS, on the other hand, is considered to be just an alternative to technology that already works.
The irony here is that SOHOs can probably benefit the most by investing in technology and leveraging managed services. The trick for VARs is to demonstrate savings and reliability. On the savings front, it is much more economical for a small business to spend a few dollars per month per employee than it is to make a major capital expenditure for hardware and software. In addition, VARs can explain that managed services are a pay-as-you-go arrangement in which customers pay only for what they need and no more.
One final argument comes down to safeguarding data. While most SOHOs are fiercely protective of their data, they do little to back it up for safety. Here, SAAS, managed services and remote storage can keep the data safe and meet disaster recovery needs, all at a much lower price than that of a traditional solution. So when it comes to the small-business market, VARs should sell on the strength of new ideas and not products shrunk down from the enterprise.
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