Ambition Mission

Today’s coverage of the election is commonly called “Decision ‘08.”  For some, an easy decision, for others a tough decision.  I am certain there are enough blogs out there dedicating something political to the fray today, so I will not add.

 I will however draw a parallel to business.  There is a reason we have term limits and elections.  First, nothing lasts forever.  Second, It is necessary to continue to challenge (and sometimes revisit) previous decisions.  Elections force us to do that with our government’s leadership.  Unfortunately, nothing forces it in quite the same way in a small business.

I speak with hundreds of small business owners each month and some, I am afraid to say are simply on “auto-pilot.”  VERY FEW change the way in which they market, sell, hire, operate, do their books, compensate staff, compensate themselves, or even answer the phone.  I am not advocating change for the sake of change,  (please don’t read into that too much) but it IS necessary to take a look at all areas of one’s business regularly - sometimes a hard look.

Here is an example that is common and based on the conversations I’ve been having with Partners out there seems to be all too familiar in this market/economy, etc…  The scenario is when to cut back on expenses.  In particular, when is it the right time to let an employee go?  This is such an emotionally charged topic, that concepts of fairness, guilt, regret, responsibility and fear all get in the way of making a business decision. 

I was talking with a business owner that had hired staff too quickly.  (hired staff and then began selling)  When business didn’t grow as quickly as anticipated to support the new expense of the additional staff, a decision had to be made.  The options, as the business owner saw them were

1) just sell more, it will take care of itself

2) fire the last person hired (that’s fair right?) [note: this was owner’s least desirable option]

3) cut back on other expenses, such as benefits for all staff

4) dramatically reduce the owner’s compensation (for the time being)

The owner was looking at emotional reasons and NOT looking at his business.  He was not analyzing the P&L, sales pipeline, balance sheet, and cash flow analysis - but he should have been.  In this case, he was considering lowering his pay by 50% to $4,000/mo and cut benefits such as mileage reimbursement and some other healthcare and fringe benefits to all employees.  His total savings would equate to approximately $6,500/mo.  Alternatively, as I saw it his other option was to let go one of his high paid (slightly overpaid) techs.  This single change would save approximately $8,000/mo when everything from payroll, taxes, benefits, mileage, etc was factored in.

Which is more emotionally taxing for the business owner?

Which is more emotionally taxing for the remainder of the staff?

And finally, the most important question (and really the only one that matters) is:

Which course of action is best for the health of the business both long and short term? 

Here is my point. 

When making dramatic decisions in your business, always do two things:  First, Pretend you are not the owner/operator but rather an investor looking out for the long term value of the business.  Second, be certain to look at major decisions from multiple angles and not be clouded by emotion.

Good luck and happy hunting!

P.S.  If you find yourself at this decision point and want an objective opinion from one’s who’s been there, reach out to me, I will be glad to listen and offer my opinion and help however I can.

Let Ambition Be Your Mission!

~ Matt Makowicz

Just coming off an exciting weekend at SMB Nation East in NJ, there was a lot of buzz about the Microsoft Response Point telephone system solution.  Some attendees loved it, others didn’t.  In fact, after getting an ‘earful’ from what I consider to be a prominent IT company in the NY area, I took notes on what folks thought about Response Point.  Here goes:

The Not So Great -  

·         No call accounting

·         No provision for any messages or music on hold other than what came with the system

·         No LDAP for Active Directory – must key in all employee names

·         No intercom/paging within phone system (unless use other installed speaker system)

·         1100 contact maximum per user

·         All phones must be on same subnet – i.e. no branch offices

·         No soft phones for telecommuters

·         100 MB mailbox limit (for all user’s mailboxes)

·         Doesn’t integrate outbound with Outlook or CRM (i.e. cannot bring up a contact and click dial)

·         Cannot record a conversation

·         Limited to 2 person (3 party) conference call

While that was an earfull - I also recieved some positive comments from this partner:

·         Seen as SBS 4.0 - i.e. an entry level product not quite there yet with a TON OF POTENTIAL

·         No one else has something like this at this price point (other than maybe Linksys)

·         If MS stays committed to this product, expect great things to come

Here’s what I think -

MS Response Point is NOT a robust, feature heavy, universally applicable phone system for small business - not yet anyway.  If you’re familiar with products such as Avaya IP Office, don’t try to compare head to head the two.  Also, if you know the IP office system, you know that a 5-10 person company will likely spend between $12,000 and $15,000 for it, while response Point will be between $2,000 - $3,000. 

The Good news is that Response Point is a great entry level product that will allow most smaller small business customers to get 80%-100% of what they are looking for in a phone system.  It is also an additional revenue stream for you as a Partner to be more of a one stop shop for your customers.

The Better news is that Microsoft also has a higher end software based solution with Live Communications Server which is very powerful.  It is only a matter of time and version releases before these two products get closer and Microsoft (and more importantly, you as a Partner) will have a robust telephone solution for any small business with any level of need.

The Best news is that we’ve seen what Microsoft does when it wants to enter a market.  They enter with a solution that sounds fantastic but when you look under the hood (or look with hindsight) is all one may have hoped for.  (SBS 4.0).  But the deed is done - Microsoft has entered the market and the product just keeps getting better, and Partners have continually increasing revenue opportunities around the product.

So my advice is to begin.  MS Reponse Point may not be perfect, but it is good enough for millions of customers out there who have a need.  You can keep a potential competitor on the outside by offering your customers a solution.  Then, years from now, when Microsoft’s phone system solutions are like SBS 2003 (unbeatable in the Small Biz market), you’ll proudly state that you have been working with the product from the beginning!  - - - - - - - - - - - - - - - - - - -    Also consider that almost every phone system provider needs to get into the network support business to survive in the years ahead.  It is a harder road for them to learn network support than for us to learn phone system technologies - so don’t waste the head start you already have.

Happy hunting! 

Matt Makowicz

My firend Erick Simpson (www.mspu.us) brought a DELL magazine ad to my attention and blogged about it yesterday.  Think Dell won’t attract any customers for support?  Of course they will.  Think they won’t have competative prices?  Of course they will.  Is it time for the small business focused IT provider to fold up the tents and pack it in?  Of course NOT!!!

There are two things that will keep a customer loyal to you.  First, is your relationship.  Second is a general mistrust of the 800 lb gorilla.  To survive this game, keep and continue to win customers, you must pay attention and focus upon both.