January 04, 2009, 7:07 AM — Many small business IT consultants wonder as they are starting their businesses whether or not they should do computer maintenance contract subcontracting for national service organizations.
The simple answer is, â€œNO!â€ Essentially, you will spend a lot of money and time getting certified and learning the latest platforms and technologies and best practices. And you will end up doing a lot of low-level, low-skilled hardware repair and work that puts you in the same category as a commodity. Why? Because every year, hardware components become more disposable and replaceable and less repairable.
The following 4 tips can help you understand why you should stay away from doing computer maintenance contract subcontracting with a national service organization:
1) Many Computers are Dirt-Cheap and Basically Disposable. As an example, think about a standard $400 consumer-grade PC. Can you imagine one of your clients spending money on an out-of-warranty repair for this type of computer? And who would spend money out of warranty as part of an on-going computer maintenance contract to have a $400 laser printer repaired? You canâ€™t focus your consulting business on these minor computer repairs. Rather, you should target small businesses that need your help on more complex IT business problems and can afford your sophisticated expertise.
2) Labor Allowances for Computer Maintenance Contract Work are Low with National Service Organizations. National service organizations are going to be dealing with warranty repairs on pretty inexpensive hardware. That being said, how big will the labor allowance be for a $1,200 notebook? Many big hardware vendors are so hard-up for cash that they are always on the verge of going out of business. There are only a handful of major hardware players that are still in good financial shape. So you have to think about what your chances of getting paid well in this situation will be.
3) Think About Your Profit Margins on Computer Maintenance Contract Repairs for National Service Organizations. Consider what you will make on a repair. You will probably only make somewhere between $50 and $200 (at the absolute most). You will do a lot better when you find small businesses in your area that need high-level professional IT services on a regular basis and not just your help un-jamming a printer or rebooting a computer.
4) Computer Maintenance Contract Subcontracting for National Service Organizations is Barely Profitable. When you act as a subcontractor for a national service provider, you will be working against yourself and your business constantly. You will most likely be in eight different offices every day as opposed to one or two. And you will be given a $65 labor allowance to replace a system board, no matter how long it takes you, instead of billing out $100-$150 per hour for high-end network support services and network integration services.
Repairing and troubleshooting hardware is low-end commodity work and should be left to those that can afford to bill out at $20-$30 per hour. You need to focus on high-end consulting and establishing a strong computer maintenance contract program with steady, high-paying clients if you want to really succeed in the small business IT world.
In this article, we talked about 4 reasons to steer clear of doing computer maintenance contract subcontracting for national service organizations. Learn more about how you can build your computer maintenance contract business around great, steady, high-paying clients now at http://www.ComputerMaintenanceContract.com
Copyright (C), ComputerMaintenanceContract.com, All Rights Reserved.