Outsourcing the Channel Shortage.

This originally appeared on ChannelInsider.com

Solution providers say they’re having a hard time finding sales and tech talent. If you can’t hire, outsource to those with capacity and domain expertise.

Despite the increase in nationwide unemployment, a recent survey of vendors and solution providers conducted by Channel Insider and Amazon Consulting found a shortage of professional services and technical staff as inhibitors to business performance. More than half of the solution providers said that if their talent shortage were resolved, they could grow their business significantly.

While subcontracting is a tried and true business practice among many other professionals—from construction to legal services—IT solution providers say outsourcing product and service delivery and other operational functions (marketing, PR, accounting) was not an option to resolving their talent issues.

It is estimated that by 2010 there will be 300,000 home-based outsourcing agents in the United States. These agents cover everything from technical support to marketing and PR agents. With the general acceptance of broadband and VOIP there is no geographic boundary for accessing talent.

The benefits of outsourcing are many. You never have to worry about a lunch break or a sick day with your contract employees. You do not have to carry benefits and you can staff up or down depending on the needs of your business. Outsourcing allows you to increase your company’s services portfolio without increasing your employee costs. As an added benefit, professional services are tax deductible to the small business.

Still not sure where to start? Consider these ideas.

Outsource your professional solutions staff
Talk with your vendors. Often market development funds (MDFs) or co-op funds can be used to pay for a portion or all of a specialized employee. Vendors will invest more training and can assist with the hiring of a co-op employee.

Outsource your technical staff
Consider OnForce (www.onforce.com), which connects more than 14,000 specialized technical employees where you need then, when you need them. They can wear your company’s logo and will follow your direction as it relates to your customers. OnForce has a technical bench technician in every state and can even quote you a response time.

Outsource your training
Still trying to train your employees in-house? CompTia, MSP Partners and MSP Alliance offer specific training for your professional services sales members. Again, using MDF or co-op funds can be an excellent source for funding employee training and offsetting business expenses.

Outsource marketing
When you are ready to advertise or increase your market presence, it is time to think of outsourcing your marketing. MDF is readily available to assist you with promoting specific vendor products and solutions. Talking with your vendor sales representative or distributor can get you started on uncovering the wealth of resources available to grow your business.

Outsource operations
As you consider the other functions you can outsource, consider your accountant, lawyer and hiring firms. Remember that for each hour of contract labor you engage, you have an hour to focus on growing your business and increasing your sales.

Outsourcing allows your business to do more with less without burning out your current employees. It is also a cost effective and scalable way to grow your services business. Decreased employee costs, increased technical and professional service agents, increased marketing and operations support provide your business increased revenue and profits.

Speak first.

I recently attended a sales training presentation.  This was a very good course as it offered all of the required business information the sales team would need to be successful, and it included nuggets of sales techniques for those who were listening.

Of the nuggets shared my favorite was “speak first, do not wait for the customer to seek you out.”   Talk about timely in our current economic environment.    In an age where many businesses have developed communities and newsletters time and resource constrictions keep the communications dated and irrelevant.  Many small business owners are busy running the day to day activities required to keep their operations afloat and cannot focus on reaching out first to the customers.  The message is clear: to grow your business you need to be proactive and reactive.  You need to be placing the call to your customers and answering their calls when they have a specific need.

Think about your business for a minute.  Are you adding services or new offerings to your business?  Do you have some offerings that are most popular with your customers but come with a lower profit and other areas that are profit rich but your customers are not calling for them?

When the money gets tight in any business there is a need to increase efficiencies.  And while employees are often being asked to do more and businesses are trying to grow on less, the need to communicate is greater than ever.

• Start with your website.
  Take a quick look at your front page.  Are you engaging the customer or are you just sharing information?  The front page of your web site is as important as what you wear to your first meeting.  This is the first impression your customer gets of your business and the more interactive the site the more engaged the customer will become.
• Train your sales team.
  You cannot expect your customers to know what your sales team does not.  Spend 15-20 minutes a week with your sales team reviewing specific company offerings and be sure everyone knows how to sell them.
• Consider a dedicated communications resource.
  This is not necessarily just a marketing person.  Depending on your business this could be an inside sales individual that is focused on qualifying the opportunity and setting the appointments for your sales team.  This position not only targets the activities of your sales team, but also increases the communication from your company to new or potential clients.
• Got a newsletter?  If not, add one.
  Newsletters are a double edged sword.  Everyone wants to get quick highlights from a company, but no one has the time to read an epistle every month.   Make sure your newsletter is timely, has a call to action and contains information that is relevant.  Not sure if you have someone on staff to complete this project?  Outsource.
• Take time to know your customer.
  It is an old but true adage “No one cares how much you know, until they know how much you care.”  Get to know your customers pain points and work together to grow their business.  For every customer who sees an increase in their revenue from your offerings, you will see an increase in yours.

As the economy continues to challenge all of us in growing our businesses the basics of good selling and communications cannot be stressed enough.  The most successful businesses will continue to speak first, listen and grow both their business and their customers.

Making lemonade with lemons.

Many small businesses are watching the news with great trepidation.  Like all of us no one knows what the end of this crisis will be and what affect it will have on us as individuals and business owners.  One thing is clear, this is a basket of lemons.

And the best things to do with lemons?  I say get a bottle of tequila, a salt shaker and some friends – but I understand that mainstream thinking is to make lemonade.

So what is the recipe for the most profitable lemonade?  Services.  Services can grow in a time of crisis.   Let’s look at two examples.

First example would be for an HVAC contractor.  In a strong economy the contractor answers many calls and replaces a ton of hardware.  In a down economy the contractor is making the same amount of calls but not replacing the equipment.  In some calls people are just asking to troubleshoot over the phone and save the service call.  In other calls the contractor is asked to just “mend” the equipment until money is available.    In this situation the contractor has the opportunity to increase their service offerings.  People will be interested in how to save on their heating and cooling bills.  They will be interested in consulting on where they are loosing the efficiencies with their current systems.  In some cases the contractor will only be paid for the service of consulting and running the numbers.  In other cases hardware sales will come along with the consulting fees.  When the customer reviews the expense of keeping old equipment running to the one time hit to replace the equipment and increase efficiencies and lower utility bills.  The long term savings will win out in almost every case.

Now let’s consider the situation of an IT solution provider.  By definition a solution provider is more than a reseller of products.  This business offers a variety of hardware and software solutions that include services such as installation, repair and warranty.  The customer is sure they do not need to upgrade the office printers but when the solution provider offers a review of costs associated with the current office printers to an environment that includes multifunction products and document solutions the final cost savings are equal to the cost of the upgrade in year one and pay for additional upgrades and expansion in year two.  This solution provider, much like the HVAC contractor, is now offering full service solutions.

In many cases successful HVAC contractors and IT solution providers are already practicing these revenue generating services.  In addition to these consulting practices they have changed their advertising and marketing mix to reduce expenses while growing incremental business.  These changes may include leaving traditional media (television, radio, print) and moving to new media (web, viral marketing, networking).  These businesses may also consider hiring more contractors and less full time employees, saving on overhead (benefits, vacation time, sick days).  These are just a few ways many businesses ride the waves of a rough economy safely to shore.

No one knows what the future holds as it relates to our businesses, but one thing you can take to the bank:  the profit on services and solutions exceeds the profits on hardware and software.