Small Business Morphing

March 22, 2011


I admire small businesses. They are the foundation of our economy. Small businesses employ over 65% of workers in the US. Small businesses are innovative, risk taking visionaries. I live in Phoenix which while being one of the largest metro areas in the US is a small business town. So what does that really mean?

We continue to be challenged by what defines a small business. Things have been changing. As businesses outsource more, utilize strategic partners, and automation lowers the need for labor, what was a large enterprise a few years ago just might be considered a small business today. Additionally the economy has made many businesses smaller as lower revenues demand lower spending. The result – more small businesses.

Over time how we define segments of business will change and catch up to the morphing that’s occurring. In the interim there is a tremendous need and a wonderful opportunity. More and more small businesses are outgrowing the needs of many of their providers. This includes IT services, administration, HR, and legal. As many of you are small businesses yourself and provide support services to small businesses here are a couple of things to keep in mind:

  • Many Small businesses are sized optimally to compete. This is counter to the belief that small businesses haven’t figured out how to grow.
  • Over 35% of small businesses conduct business or commerce on the internet. Their storefront is their website and the systems and partners that support it. These small businesses are accountable for business results that are tied to the performance and quality of their partners. This can include the hosting company, commerce clearing houses, Search Engine Optimization companies, and their web developer who constantly must refine their face to the customer. This is  a lot to manage, outside their visible control, and outside of their scope of knowledge. Couple this with the need for ERP and CRM systems to remain competitive and dynamic and the rules have changed.

Ironically the small businesses that are growing and doing well need the most help. IT service companies that focus on small businesses – typically Managed Service Providers (MSP) must evolve themselves to keep up with the needs. Over 80% of small businesses today provide IT support internally. That is they are self-service and have some form of an IT department. This has worked for most but will quickly limit the small business’s success. The new model of hosted IT, web-enabled businesses require a more complete level of service and support. This requirement is well beyond the capabilities of most internal IT organizations. Information Technology for small businesses is moving from providing the applications to support a business to, in many cases, THE BUSINESS.

MSPs have what might be the single largest growth opportunity that we have seen in years. MSPs don’t compete with themselves. Instead they compete with the self-service small business. MSPs must educate small businesses on why they need them. Educate them on how their needs are outpacing what they can do internally. Educate them on how a contemporary MSP can enable a small business to thrive and provide differentiation. Educate them on how they can use IT to create a competitive advantage. above and beyond  lower cost, secure data, and high availability. Demonstrating the balance of consulting and IT support along with integrated business guidance to propel a small business forward is quickly becoming the model that will win the hearts and wallets of small businesses.


About Frank Picarello

Frank is a well-respected leader in providing technology services to small and medium-sized businesses. He is currently COO for TeamLogic IT, Chairperson for CompTIA's Small Business Owner's Group, and a member of CompTIA's Unified Communication Committee.

View all posts by Frank Picarello

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