Tuesday, September 21, 2021

Three Things You Should Do in Response to the CISA Documents

CISA is giving advice about MSPs. Here are three things you should do about it.

A few days ago I blogged about the advice CISA* is giving to your clients. Today I want point out some action steps you should take in response to these documents.

That blog post is here - https://blog.smallbizthoughts.com/2021/09/the-government-is-telling-your-clients.html

The document you need to read is: Risk Considerations for Managed Service Provider Customers.**


I know many people are tempted to say that they don't have to pay attention if their clients are not going to read it. Not true. I consider this primary document and the related documents to be a peek into the future.

And since you can peek into the future of your business for free, I think you should. Here are some specific items I think you should pay attention to.

First, your company's financial health and well-being matter. I know that sounds obvious, but this is going to become a publicly-discussed element of a sound business relationship.

The CISA advice to your clients is to request documentation of your financial health AND performance records based on the service provided to other clients. There are no specifics of what that looks like, but a one-page note from your accountant is probably a good place to start.

In my white paper on transforming an industry into a profession, the first pillar I call out is financial security. You need a good, sound business model in order to have a sound future. Your clients have a right to know whether you're a "going concern" or losing money. See https://www.nsitsp.org/wp-content/uploads/2021/07/Transformation_Industry_to_Profession_Palachuk.pdf

In the original blog post on this topic, I mentioned that advice from the CISA document will slowly work its way into usage. I can pretty much guarantee that's the case with financial health.  This is "low fruit" and will become a checkbox on checklists that will emerge for hiring an MSP.

Today, you can ask for a quick note from your accountant. In fact, you can write it and ask them to put it on their stationary and sign it. That will probably be good for a year or two. We'll see after that.

Second, as my mother used to say, Watch Your Language! I have long advocated that we avoid casually referring to contracts or service agreements as Service Level Agreements. The CISA document uses SLAs accurately: It encourages your clients to get a refund if you do not meet your SLA targets.

I highly encourage you (and always have) to avoid using the term SLA unless you have a formula for giving clients their money back when you have unscheduled downtime. Many people (hundreds, perhaps thousands) have argued with me about this over the years.

SLA means something. You cannot get away with saying, "Well that's not what we mean. And our clients understand what we mean." These words exist outside your informal agreements. And when this advice trickles down from big business to small business, the government's (accurate) use of the phrase will dominate.

As a reminder, people also say that they use the term "All you can eat" and are sure that everyone understands that it doesn't actually mean all you can eat. I won't repeat that diatribe here for the 1,000th time.

So, watch your language. Words mean things.

Third, create some client data documentation to cover the basics of the CISA concerns. If you prepare these documents, you can actually bundle them together in a zip file or printed onboarding package with other documents.

The goal here is to address some legitimate concerns and pre-empt the need to create these docs on the fly because you didn't expect someone to ask for them. This might also be a nice differentiator for the next year or so.

Here are four examples of documents/checklists you should prepare, as recommended by the CISA advice to your prospects:

- Data Management. This document could start with your Privacy Policy statement on how you manage data. In particular, CISA encourages businesses to ask you how you will manage their data, how it will be separated from other client data, and how you secure their data.

- Vetting employees and securing clients' intellectual property. This starts with having employees sign non-disclosure agreements regarding your company and your clients. You should be doing this already. But now you should define that process for your clients and prospects.

- Document your incident response. This is particularly useful for ransomware attacks, but is also useful in any disaster (fire, flood, etc.). The CISA document encourages prospects to inspect all monitoring systems, intrusion detection logs, and "data telemetry" from monitoring systems. 

That's simply not possible with most systems. Luckily, clients won't ask for this in SMB . . . today. But if it happens in the mid-market, the standard tools for SMB IT consultants will someday include the ability to give clients this access. Heads up.

- Document each client's backup. This is another one you should already be doing. The CISA document specifically calls out the request for an air-gapped backup. In my opinion, that's not being done by most SMB systems, especially cloud-based and BDR systems. As the advice of CISA propagates, the term air-gapped backup will find its way into your clients' vocabulary.

The bottom line: Act Now. Don't Respond Later.


Managed service - in fact, all modern tech support - puts a heavy emphasis on preventive maintenance. Consider this the preventive maintenance of your company's business well-being.

Yes, it takes some work. The the items outlined here are mostly common sense and "best practices." The exception is the client's ability to look into your monitoring systems and logs. That issue - transparency - is in its infancy. But get used to it. Five years from now it will be old news.

Once again, my advice is to take action now so you're not responding to a new reality in an urgent environment. This is a case where you really can see the future.

And if you haven't done so already, please join us over at the National Society of IT Service Providers. We're looking at these things and preparing to take a stand on legislation that's inevitably coming down the road. Check us out at https://www.nsitsp.org.


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*CISA is the Cybersecurity and Infrastructure Security Agency. See https://www.cisa.gov

** Risk Considerations for Managed Service Provider Customers. See https://www.cisa.gov/publication/risk-considerations-msp-customers

:-)


Monday, September 20, 2021

The ASCII Group Announces the Formation of MSP Security Committee

I received this press release from my friends over at ASCII . . .



The ASCII Group Announces the Formation of MSP Security Committee

Bethesda, Maryland – September 20, 2021 – The ASCII Group, a membership-based community of independent North American MSPs, VARs and Solution Providers, today announced the formation of its MSP Security Committee. The goal of the recently established Committee is to advise fellow ASCII members on a framework that MSPs can utilize to protect their business interests and that of their clients.

To start, the committee is publicly releasing initial guidance as it relates to what MSPs need to consider when vetting potential technical solutions (https://bit.ly/vet-msp). Based on the objectives of this committee, all future guidance and resources will be provided openly to members within The ASCII Group community.

“With the security landscape rapidly changing, the formation of this Committee will help MSPs reduce their overall operational risk with the development of independent, best practices,” said Jerry Koutavas, President, The ASCII Group.

ASCII’s mission is to deliver to its members an environment where knowledge sharing and information exchange is ubiquitous. This initiative grew out of requests from the ASCII community at large given the ever-changing risks the industry faces as it pertains to security. The Committee will be comprised of 12 Managed Service Providers (MSPs) representing a variety of disciplines and markets throughout North America.

Please visit www.ascii.com for more information on ASCII’s MSP IT community.


About The ASCII Group, Inc:

The ASCII Group is the premier community of North American MSPs, VARs and solution providers. The Group has over 1,300 members located throughout the U.S. and Canada, and membership encompasses everyone from credentialed MSPs serving the SMB community to multi-location solution providers with a national and international reach. Founded in 1984, ASCII provides services to members including leveraged purchasing programs, education and training, marketing assistance, extensive peer interaction and more.  ASCII works with a vibrant ecosystem of leading and major technology vendors that complement the ASCII community and support the mission of helping MSPs and VARs to grow their businesses. For more information, please visit www.ascii.com. 

-30-


Saturday, September 18, 2021

The Government is Telling Your Clients How to Select an MSP

The Government is Telling Your Clients How to Select an MSP


Really.

It's not all bad news. In fact, some things just fall into the category of, "It's done. Now, what you're going to do about it?" Here's what I mean.

The U.S. government has published a detailed nine-page report on how to find a good MSP. They've also published hundreds of pages of related advice, which could send some of your prospects down a major rabbit hole. There's nothing you can do about that.

But "that" isn't all bad news. You get to decide how to use this to focus your marketing and your sales approach.

Let's back up and look at the big, big picture.

The Cybersecurity and Infrastructure Security Agency has published a number of documents directly related to you and your clients. Start Here: https://www.cisa.gov

The specific document in question is, Risk Considerations for Managed Service Provider Customers. See https://www.cisa.gov/publication/risk-considerations-msp-customers (Published September 2021)

First thing to note: Your clients won't read this. Well, your small clients won't read this, and 90% of your medium-sized clients won't read this. How can I say that?

The document is filled with jargon. It's also filled with advice that makes clear that whoever wrote it has never worked in the SMB market. Example: The first "best practice" for small businesses is to establish "a supply chain risk council that includes executives from across the organization."

Second, the document assumes that keeping IT support and security support in-house is a reasonable option. It's not. If a business owner is balancing overall cost and security, there's no way the in-house option can win.

An in-house employee who is actually competent and up to date with network infrastructure, cloud services, and security cannot be had for under $60,000 plus tax and benefits in the US. So let's round that to about $75,000 all in. 

I'll bet (because I already know) that almost none of your clients are paying are paying you $75,000 per year for the labor component of managed services. With luck you have one or two. But not a lot of $75K+ clients.

So, thankfully, even if your clients found this document, they would see that the advice is not meant for them. Or - as is often the case - they will hand it to you and ask your opinion. 

But you cannot ignore this document or the larger efforts of CISA. These documents (an incomplete list is below) WILL be used by mid-market and enterprise organization. And they will be used by government agencies at all levels.

This matters for several reasons. First, the folks who will use these documents for guidance have large budgets. They can afford top notch hardware, software, and services. If they need a committee to determine the size of technology committee sizes, they'll just create one.

Second, and more importantly, it is extremely likely that these documents will influence future regulation and legislation. Once in use by larger businesses and government agencies of all sizes, they will become the "emerging norm" for choosing IT service providers and MSPs.

On top of that, the longer these docs are out there being referenced, the more they begin to affect actual standards.

Governments and larger organizations have a lot in common. Very often, decisions are made so someone can avoid being seen in the light of day. It's not that they're doing anything wrong. But avoiding controversy is associated with keeping your job. Implementing a government-approved standard feels safe.


Bottom Line: Don't Panic

Be aware that this is real and it's happening.

Download these docs. Read the one covering advice to your clients on hiring an MSP. At least browse through the rest.

And if you haven't done so already, please join us over at the National Society of IT Service Providers. We're looking at these things and preparing to take a stand on legislation that's inevitably coming down the road. https://www.nsitsp.org

-- -- --

Other CISA publications worth your time:









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Comments and feedback welcome.

:-)


Saturday, September 11, 2021

Ignore Your Competition - Part 3: The Power of Differentiation

Ignore Your Competition

The previous posts in this series are here:

Part 1 - https://blog.smallbizthoughts.com/2021/09/ignore-your-competition-not-your.html

and here:

Part 2 - https://blog.smallbizthoughts.com/2021/09/ignore-your-competition-part-2-myth-of.html



Part 3: The Power of Differentiation

There are a handful of things we do in business that people simply assume they must do. For many people, analyzing the competition is on that list. But I encourage you to ask WHY. Why would you analyze your competition? What do you have to gain from it? 

The only general reason I can think of is so you can be more like them. And that only makes sense if they are doing significantly better than you. At last, we might have a legit reason to spend energy on the competition rather than your clients. 

But wait. If someone's doing so much better than you that you want to emulate them, don't you already know what to do? After all, they've got a great marketing process, a great sales process, great products and services, great employees, and a killer cloud offering. Right? 

So what you need to do is make sure you've got all those things. 

But please note: You don't want to be just like them. That path leads to only one place - being second best to the company you're trying to copy. In other words, you'll be a bad copy of them. Not quite as good. Not quite as successful. Not quite as profitable.

Let's take a step back. Remember, there are no secrets in success. Everyone knows what they need to do. And that means that you know what you need to do. Now you just need to go do it. Copying your competition won't help.

Ultimately, you have to find something different to do. I don't mean an alternative to cloud services, security, and strategic planning. If you're in the IT business, that's essentially the job. I mean finding a different way to Be You in this industry.


What makes you stand out? 

Please don't give me the easy BS that everyone puts on their web site. It's not your technical prowess or your extreme customer service. Everyone says that. What is it really? What makes you you?

When I teach SOPs (standard operating procedures) or marketing, I always come back to this simple truth: Your brand is not your logo or your color scheme. Your brand is everything you do. Your brand is the way you show up to client meetings. It's your processes and procedures. It's how you invoice and how you pay your employees. It's how you execute a first client project. It's how you deliver consistency and consistently good support.

How do you do that? I'll bet you don't know. 

You have something that makes you different and got you where you are today. You need to boil that down and put it on paper. You need to focus on your brand. The process of figuring that out will require you to set aside many assumptions. Examine every single thing you do. Don't say, "It can't be our billing process." Or, "It can't be our offering." Examine everything.

Hidden somewhere among all your processes and procedures, there's a golden nugget. What is it that truly, honestly, makes your company different? Put your energy into finding that. You will probably get a lot of help from your clients. After all, they can see what makes you different more clearly than you can.

In all of this, I encourage you to be completely open. Tell everyone what you're up to. You want to find what makes you different so you can take that out in the marketplace and find more people who want to do business your way.

And here's an interesting twist: Don't worry that your competition will copy you. First, no one's paying attention to you. Sorry for the ego stomp. But it's true. Second, your competition will not copy you. They're too busy and they're not following you either.

So relax and go figure out who you are.

I know you've heard many presentations encouraging you to find your USP - Unique selling proposition. You obviously can't be unique if you copy someone else. You are unique simply because you ARE unique. The real job is defining it and declaring it. 

The job is not to BE unique (your already are). The job is to find your uniqueness so you can build your marketing around it. You've probably read a lot of business histories. Whether it's Spanx, Henry Ford, or a hundred others, differentiation did not come from examining the competition. In all cases, successful business people created something that they thought was missing, or something they thought people needed. 

The new thing was rarely new technology. It was either a change that filled a void, or it was a process that delivered goods and services in a new way. On rare occasions, it was a price point. In most cases, the new thing started when someone noticed that some thing could be improved. Very often, it addressed a dissatisfaction on the part of the buyer.

A great example is CarMax. They saw that people hated car shopping because they felt like the entire industry was built around ripping off the customer and sticking them with a car they paid too much for. So they restructured the process. First, they eliminated the information gap and displayed car inspection details and the Kelly Blue Book price of every vehicle on the vehicle. Second, they eliminated all motivations for sales people to upsell the buyer. Sales people get paid per sale, no matter the dollar amount. And, third, they offered a remarkable five day, no-limit return policy. So they eliminated the fear of buyer's remorse.

In all that, CarMax didn't change much about car buying. You need to poke around. You need to test drive. You need to get financing. They couldn't change most things. But in changing a few things, they created a totally new experience for the buyer.

Unfortunately, our industry is old enough to have plenty of bad habits. I sometimes worry that clients look at us like the car industry and find too many similarities. But my clients always paid me happily because they were always well served. What do you do right and different that stands out?


That question - because it's so client-focused - is worth spending a lot of energy on.

:-)


Wednesday, September 08, 2021

Ignore Your Competition - Part 2: The Myth of Scarcity

Read Part 1 here: https://blog.smallbizthoughts.com/2021/09/ignore-your-competition-not-your.html


Do you believe in scarcity? It's not what you think!

In the first installment in this series, I made the case that your competition is irrelevant. And it's certainly the case that spending massive effort studying your competition is a waste of time. 

Now let's turn to one of the great business myths that leads people down the road of wasting time thinking about their competition. If you're a technology consultant, there is no scarcity of clients, no scarcity of work, and no scarcity of money. There might be a scarcity of self-confidence or ambition. But studying your competition won't help with those problems. 


Why are people tempted to pay attention to the competition? What are the supposed benefits of knowing about your competition? The answer might surprise you: We study our competition so we can charge less money and make less money.

Ooops. That can't be right. We study our competition so we can second-guess what we're doing. We find out what they're charging, and we make sure we're not charging too much. In other words, we study our competition so we can charge less money and make less money.

Oops, I did it again. Let's try one more time. We study our competition so we can understand the market, make sure we're doing at least what others are doing and not charging too much or too little. We place ourselves right in the middle of the bell curve. And thus, quite realistically, we study our competition so we can charge less money and make less money.

No matter how you slice it, focusing on your competition tends to make you more mediocre (the definition of the middle of the bell curve) and less expensive. You don't start out trying to make less money, but it's almost always the outcome from putting attention on the competition. 

Last time, I argued that competition doesn't mean what you think and really amounts to a tiny fraction of people in your industry that you can't really study anyway. Today, let's talk about the greatest threat to your future success: The Myth of Scarcity.


The Myth of Scarcity

The concept of competition assumes winners and losers. In other words, it assumes we're playing a zero-sum game (When one company gets a dollar, some other company gets one dollar less). This is what they call a mentality of scarcity.

The reality is that the technology industry is an ever-expanding universe. Most people start with fixing PCs, setting up computers, and then figuring out networks. They expand to specialize in something. It might be servers, cloud services, or emerging technology.

If you look at what the average "computer consultant" did and sold in the 1990's, it seems like a completely different business. That's because it is. Business people were less technical; technical people were less business-oriented. The same story holds through the 2000's and 2010's. We're always taking on new challenges and new technologies.

No one can resist the ever-changing nature of technology. If we're not selling the new stuff (yet), we're having to integrate it or make old technology work with it. On top of that, new businesses come into existence every day. They need technology. And many businesses grow in order to survive. So, again, they need more and more technology.

I've seen wave after wave of people retire from this business for the same reason. I'll quote someone who said it perfectly to me in 2008 when I invited him to a seminar on cloud computing: "I'm not going to learn another generation of technology." Those words stuck with me as I watched one person after another retire or quit the business during the recession of 2009-2011. The recession was somewhere between an opportunity and an excuse. But the real reason was a reluctance to learn the next generation of technology.

And what is a "generation" of technology? It's not just the latest hardware, software, and operating system. A generation of technology is more about a significant shift in how things are done. It requires some re-schooling and re-tooling. 

Here are three secrets you need to remember. 1) Technology generations are constantly emerging, peaking, and fading. In other words, we're always in the midst of at least three great waves. One early, one middle, and one late in a technology generation. 2) Your only real "competition" is your own reluctance to learn the next generation of technology. If you don't embrace AI or machine learning, that's your decision. But when someone comes along and sells those things instead of you, you can't really call them your competition.

Finally, 3) There are no secrets. It will take you eight minutes to determine what people in your city charge for services. I argue that that information is irrelevant. But if you choose to act on it, that's on your again.


Why People Compete on Price

There's tremendous irony in this. For the most part, people compete on price because they don't have enough information. Or their prospects don't have enough information. I think this is ironic because the concept of studying your competition is intended to give you more information. But, to the extent anyone actually does the research, they stop at the price.

We know for a fact that buyers don't buy on price. Research tends to show two things. First, only a small percentage (under 20%) of buyers buy on price. Second, when asked to rank the factors that influence buying, price is normally third on the list. Quality products and services always outrank price.

But when we choose to compete, price somehow bubbles to the top. This might be simple laziness, but people don't try to figure out how to compete by focusing on the things that matter most - quality and service.

When in doubt, ask your clients. Why do you do business with us? Unless you have a large collection of cheap, unsuccessful businesses as clients, you'll find that price not going to be a common response. You already know this! People do business with you because they like you; they like your company; they like your service; you take care of them; you have a great way of providing quality service.

Price is a factor, but it's not the factor.

Again, there are no secrets. But here's the open secret about running a business: It costs money. It costs money for supplies. It costs money for employees. It costs money to advertise. It costs money for rent. It costs money to have technical support. Would it be nice if everything cost just a little less? Yes, of course.

But look at your own spending. Is your accountant the cheapest in town? Your attorney? Your insurance rep? Your landlord? Your janitorial service? Your car? etc. etc. In all cases, you would probably answer the same for all of these: "I have no idea, but I doubt it." In other words, YOU don't buy on price. So why would you spend energy worrying about whether your clients spend on price?

The more you focus on "competition," the more you will focus on price. It's inevitable because it's an easy, visible thing that we all agree on. We know the value of a dollar. We don't know how to quantify the value of a positive customer service experience.

If there's any scarcity in our industry, it's a scarcity of skilled talent. You are paying more and more for good technicians than ever. And there's always a scarcity of the next generation of technical talent. Today there is great scarcity for people who are really good at Microsoft 365, security, and higher-end programming. We literally need millions more people in these fields than we have today.

In my book, The Absolutely Unbreakable Rules of Service Delivery, I tell the story of mowing lawns for five dollars an hours when I was a kid. I rode my bike and didn't have a lawn mower. So I rode to the other side of town (literally up hill) to where people had money. I brought hard work. They provided the tools. And they paid me. 

I didn't know that the minimum wage was $1.60/hour back then. Apparently, neither did my clients. But I was willing to work for $5.00/hour and they were willing to pay me that. Everyone was happy.

I love the phrase, "You be you" for a number of reasons. But I really love it when it comes to business. I firmly believe that you need to create a business that operates exactly the way you want, and then go find people who will do business that way. As I said last time, you only need to get one more client. And then one more. And then one more.

With hundreds of millions of businesses all over the world, there's zero scarcity when all you need is one more client.

-- -- --

Next in the series: The Power of Differentiation

Read Part 3 here https://blog.smallbizthoughts.com/2021/09/ignore-your-competition-part-3-power-of.html

:-)


Tuesday, September 07, 2021

Super-Charge Your Social Media Marketing - All New Class Starts Sept. 14th

Super-Charge Your Social Media Marketing – 5W25

All new class starts September 14th!


Taught By: Karl W. Palachuk

Five Tuesdays - 9:00 AM

September 14, 2021 - October 12, 2021 - Register Now!

Part of the "Social Media Super-Charge" Series for Small Business


This course is designed to help you "put it all together" and complete your social media strategy with the most powerful tools at your disposal. While most people approach Twitter, blogging, and podcasting as basic, mundane marketing tools, they are second only to Your Newsletter in positioning yourself as an expert in your field. We'll look at all of these.

This course shows you how to maximize these tools and wrap them into an overall strategy for marketing and sales. But the real juicy goodness is a strategy for creating a magnifying effect across all your marketing. No matter which tools you focus on in this series, the "Super-Charge" takes place with a combination of automated and manual rebroadcast mechanisms. We provide you a detailed process for creating this echo effect. In fact, we literally give you the checklist to make it happen.

Most small businesses "use" social media, but don't really have a strategy for using social media effectively. That strategy starts with understanding the strengths and weaknesses of various platforms. And it culminates with a unified approach to branding and how your company presents itself across a variety of platforms.

This course is taught by Karl W. Palachuk, a social media influencer who "touches" over one million people per month. Karl has been using these social media for more than ten years, and has demonstrated mastery across all of the major social media that small businesses need to be successful.



Here are the specifics of what you'll learn, week by week:

Module 1: Twitter - Setup

  • Broadcast, Aggregate, Participate
  • Following and Followers
  • The Mighty #Hashtag
  • Setup, Bio, Profile
  • Graphics and Branding
  • Types of Posts
  • Special uses
  • Twitter in the Big Strategy


Module 2: Blogging

  • Why Blog?
  • Best Advice to Ignore
  • Finding Your Voice
  • WordPress, Blogger, or Another Option
  • Design, Graphics, and Branding
  • Timing
  • Tips and Tricks for Ideas and Consistency
  • Blogging a Book; Booking a1 Blog
  • Blogging in the Big Strategy

 

Module 3: Podcasting

  • Why Podcast?
  • The Challenges of Podcasting: Stats and Distribution
  • Planning
  • Your Theme
  • Your Voice
  • Frequency
  • Length
  • Format
  • Hardware and Software
  • Posting and Syndication
  • Podcasting in the Big Strategy


Module 4: Email Marketing and Newsletters

  • The Greatest Marketing Asset You’ll Ever Build
  • List Overview
  • Legal Requirements
  • Picking a Platform
  • Design, Graphics, and Branding
  • Planning
  • Your Theme
  • Your Voice
  • Frequency
  • Length
  • Format
  • Email Marketing in the Big Strategy

 

Module 5: Super Charge: The Magnifying Effect

  • Pick Your Social Media
  • Your Primary Site – Web or Blog
  • Building that Strategy!
  • Connecting Social Media
  • Super Tools
  • Respecting Intellectual Property in Social Media
  • Build Your Echo Chamber
  • Engaging Your Human Network
  • Executing the Big Strategy

-- -- --

Delivered by Karl W. Palachuk, blogger and author of the very popular Relax Focus Succeed blog at www.relaxfocussucceed.com.

Includes five weeks of webinars with related handouts, assignments, and "office hours" with the instructor. All classes are recorded for download. All classes include suggested "homework" that is totally action-focused and intended to move your company's marketing forward.

This course is intended for business owners and managers. It is particularly useful for Sales Managers and Marketing Managers.

:-)


Sunday, September 05, 2021

Ignore Your Competition - Not Your Clients. Part 1

Among the things that gets me in an argument from time to time is my commitment that you can absolutely ignore your competition if you are in small business.

Before anyone gets picky about what constitutes a small business, please note that almost every business is a small business. Ninety percent (90%) of all businesses have twenty or fewer employees. Fifty employees gets you to the 95th percentile and a hundred employees puts you in the 98th percentile. So, if you're reading this, you probably run a small business.*


A lot of business advice is completely focused on big business. This includes the somewhat-generic advice that you should do extensive research on your competition. This includes both specific companies and the industry as a whole. That advice might be good for the five percent, but it's bad advice for the 95%.

Personally, I think it's bad advice for large businesses, but I know for a fact that it's bad advice for small businesses. There are several reasons for this.

Perhaps the most important reason is this: "Competition" doesn't mean what you think. Many people assume that competition simply means everyone who's in your business. But that can't be true. There are people in IT consulting all over the world. Do you think they affect you and your clients? 

So, let's narrow down the discussion to those in your town. But you can't even name all the people in IT consulting in your town. I can't tell you how many times I've met someone at a conference thousands of miles away from home and found out that they are SMB IT consultants in Sacramento, CA. And I run the local IT user group!

Okay, it's not everyone in your industry and it's not people in your industry who are in your city. Is it companies you go up against for bids/jobs? Yes, you can count those people as your competition. And then there's the slim  chance that someone is actually trying to poach your existing clients. You can count them as well.

In my experience (which goes back twenty-six years, several hundred clients, and three consulting companies), this group of "competitors" is microscopic. On one hand, I have participated in perhaps two competitive bid situations per year. On the other hand, I've hand maybe three poaching attempts ever.

These things exist. But I hope you see it's an absolute waste of time and energy to pay attention to these folks. You certainly should not study them, find out what they charge, analyze their offering, and spend thousands of dollars gathering detailed information about them. What would be the point? You cannot build a business based the behavior of these few companies. Besides, would you even do that? 


What's the Point of Analyzing the Competition?

What do people mean when they say to analyze the competition? Generally (and this comes from the world of very big business), they mean that you thoroughly analyze the market; know how many potential clients there are; understand everyone who operates in your space; and find out exactly how much everyone is charging for everything.

Holy smokes, Batman. What a waste of time. First, almost all of that information is unknowable. By the time you finish this massive project, twenty percent of the businesses in your geographic location will have gone out of business, and the other seventy-five percent will have grown, shrunk, or morphed into something else. The best you can hope for is a snapshot of what the market was like a year ago. And how will that change your behavior?

Second, you don't need to take over the world. You need ONE new client. One new job. One new project. Go get that. And for that one job, the economy is irrelevant, the market is irrelevant, and your "competition" is irrelevant. You just need one new client. And when you have that client, you need to go get just one more. Rinse, repeat.

Third, and we'll come back to this, if you copy your competition, the best you can hope for is to be just a little bit behind them. In other words, you'll be a bad copy of them. Not quite as good. Not quite as successful. Not quite as profitable.

Is that the benefit you hope to gain from studying your competition? You want to be an awesome second place?

Instead of wasting energy thinking about the competition, spend your time improving your business. How can you give greater value? How can you serve clients well? How can you be more productive and more profitable? Take all that attention you were giving to the competition and give it to your clients instead.

Here's the good news: It's probably the case that you actually haven't wasted your time studying your competition. It's a big, difficult undertaking. So now you can take my advice and stop worrying about it. Whenever you're tempted to worry about what your competition is doing or what they're charging, you simply move on and think about something else. In fact, you can intentionally set a trigger for yourself: Whenever the topic of competition comes up, you can use that as a reminder to think about how to improve your clients' experience!

Stay tuned. In the next installment, I'm going to talk about the greatest myth around competition.

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* On business stats, see this spreadsheet:

Note: If you don't know how to read this kind of data, don't argue with me. I simply won't engage.

:-)