Post Info TOPIC: Future of small business Tech Support Market
Dave Monahan

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Future of small business Tech Support Market
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Hello,


I'm interested to know the thoughts of the general tech community on the long-term direction of the small business Tech Support Market.


I own Smart Dolphins, which is in the business of supporting small business technology. We are a growing company with nine Dolphins and I'm anticipating continued growth. However, I have noticed that there are a large number of individual contractors (One Man Shows) servicing the same market and the numbers seem to be growing quickly. Obviously, for the long-term viability of Smart Dolphins, Im hoping that the market will evolve to be minimally diluted. I also like to believe that less dilution results in a healthier market for both consumers and businesses.


So again, Im wondering what others see in the next five to ten years. Will we still have a market of thousands of contractors or will we have a more standard market structure with just a few major suppliers of this type of service? Again, I have a vested interest in the latter scenario and Id like to know the general expectations of the community as to where it will evolve to. Also equally important is the question of how we might transition to such a market.


Sharing my thoughts: I think the current growth in the number of One Man Shows can be attributed to two things:


1.      The general market (demand) for this service is growing.


2.      The tech job market (at least locally) has been difficult for several years so people have been taking on contracts to fill the void until the market reverses (which in mind it is in the process of doing so) and jobs return.


I was a One Man Show at one point (2000) and I personally had difficulty making it a viable business. There are just too many hats to wear and I was spread very thin. That might have been due to my inability to make it work at that level. Or maybe I wasnt specialized enough, which could be argued as the key to viability in such a market.


Id appreciate any thoughts that anyone might be willing to share.


Sincerely,


Dave Monahan



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Ray Freeman

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Hi Dave,

I think you have a right to be concerned about competion from small, single person operations. "Break & Fix" service providers survive on small margins (note the decreased profitibility on the resale of hardware and software over the last few years) and are subsidizing their survival with their low overhead operations.

In order to remain competitive, stable and viable, you need to build your client-base organically...winning one client at a time and working hard to address their dynamically evolving requirements (a real challenge). Over time (it takes several years to become truly viable), maintaining a low turnover in your client-base will support yoru long-term viablility and growth.

You are working in a very challenging vertical market and need to ensure that you are focused on the scope of supply to the market that you wish to address.

Cheers,

Ray

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Bevin

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Many issues come into play in all industry areas when there is a slump in the economy - whether a general market downturn or industry-specific once.  There are fewer formal job positions out there so people have to turn to other means to support themselves.  The competition for positions is exceptionally stiff right now.  With the internet, it seems so much easier to hang out a shingle and proclaim your solidarity as 'the one stop shop for all your needs'.  It's a tough go out there when you have to be the marketer, the salesperson, the techie, the bookkeeper, the accountant and the lawyer.  Keeping on top of tech trends can be challenging enough without the resources that a more established company can provide.


But there are those out there who also do not want the traditional 9-to-5 job, so they want to be the 'one person show'.  They may have been encouraged by friends or family to become more 'official' and get paid for something that they enjoy doing and are (hopefully!) good at.  Some may enjoy the flexibility of being a consultant and are not looking to build a big company, they just want to provide a good service for a fair price.  I agree that the smaller you are, the more specialized or differentiated you need to be in order to sustain a comfortable income.  Otherwise, you get lost in the great big sea of businesses offering the same services and you are not in a position to collect a premium fee.


I do think that the market is stabilizing and that there will be healthy growth in the next few years.  I see more positions becoming available with stable, growing companies and it should allow Victoria consumers to receive excellent, expert services.  If there is another downturn, I see more and more people attempting to go it on their own. 


I also see that with the boom in construction around town and the jobs being created there, many people may abandon technology and go pick up a hammer.  I saw this in reverse a few years ago when people were leaving the trades to get onto the tech bandwagon, only to see the bottom fall out.  In this day and age, people want instant gratification and only see what is going on around them at any certain moment.  This contributes to a falsified economy because people just want to get into what's hot at the moment.  They don't realize that economic trends can take years to cultivate, and that they should be in the learning phase for their chosed sector when it is declining and bottoming out.  By the time that they are educated and ready to take on a career, the pendulum should be swinging upwards and they will be positioned to take advantage of the upturn.  This can level-out the cyclicle nature of economics somewhat by not emphasizing the rises and the falls by immediately bailing ship for something else.


I wish everyone out there success with their various ventures!


Bevin



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Jason Macleod

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When computer techs first start out in their career, they are mostly seeking the stability and security of a regular paycheque. They may have limited or no work experience and need the mentoring and management that comes with working for a company. They are willing and able to work long hours, take on new challenges and stressful projects. Over time however, many techs suffer burnout and instead of viewing the company as a source of security, they see it as a trap, a form of slavery.


I have been in the hi-tech industry for over 15 years and have been through this cycle. I've worked for many hi-tech companies large and small. I am currently a "one man show" offering computer consulting services. To be successful, I had accumulated some savings to tide me through lean times. I also had to change my mindset from being an "employee" to be an entrepeneur.


I find there are a number of benefits to being a "one man show". I can work as much or as little as I want. I can set my own schedule. I can pick and choose the projects that I work on. There are a number of tax benefits. Also, instead of working for an employer who gets $60-$100/hr an hour and pays me half or less, I can charge between $40-$60/hr and keep all of it. I am currently in a position where I have more than enough work and regularly turn down projects.


As the other person said, to start of as a "one man show" you have to build up your client base one customer at a time and keep them happy. If you are good at what you do, the message will be spread by word of mouth. So if you want to grow a large company, treat and pay your employees/contractors well and treat them with dignity and respect. Give them plenty of time off and flex hours. Otherwise, they'll wise up and go solo.


Jason.



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Rod Stratton

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I agree with Jason. I would also like to add that I am part of a 2 man show and am very happy with how everything is working out. All you need to do is look at the job postings and you can understand why there are so many one man shows. The pay is pathetic, companies bill out up to $100 an hour but pay only $8 - $10 dollars an hour. If you are lucky enough to get a job as in house support, the pay can be a lot better. I make more money in one or two hours then most guys who work for other companies make all day.

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Andrew Cadieux

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I agree with everything you all are saying, i'm a recent graduate from CDI college and have found it very hard to find good paying steady employment and have had to rely on side jobs and my career as a meso in the naval reserves. I'm currently looking for a job but the market is so stagnent that you are out of work for like 4-6 months and when you do get a job it pays like 10$ an hour and its part time, like me at Pipes Business sytems /  GH Computers.

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