12 Ways to Kill Your IT Services Business

Running an IT services business requires many skills from technical to business to communications and more and there are many minefields to negotiate along the way which could quickly kill your business if not handled appropriately. Here, in no particular order, are 12 ways to kill your IT business…

1. Overcharging – trying to milk your hard-won clients by overcharging for services or hardware. When you’ve earned the trust and loyalty of your existing customers you need to continue to prove you deserve that loyalty and if they start to feel that you’ve cheated them then they will be gone before you know it, taking with them those juicy rebills and the good word of mouth. Loyalty only goes so far so don’t abuse it.

2. Undercharging – trying to win customers by lowering your fees to unrealistic levels is risky and will only lead to the demise of your business. You should always aim to compete on the quality of the services you sell, not the price. Serious customers are generally willing to pay a fair price for a quality service. There is of course a place for loss-leaders when used in moderation and assuming you’ve crunched the numbers to ensure that that initial loss becomes a profit before too long.

3. No rebills – recurring income is the gift that keeps on giving (as long as you keep on providing!) and providing IT services is ideally suited to generating these precious rebills. Focusing on one-time fixes means forever fighting for new jobs and no stability to count on which you could have if you have clients on recurring monthly contracts. It is far better to have fewer clients rebilling like clockwork, than many more who may or may not have another job for you at some time in the possibly distant future. This doesn’t mean you can’t succeed without recurring contracts but it will be a whole lot harder and a lot more stressful!

4. Bad customer service – you don’t have the luxury of ignoring this aspect of business so you must always aim to provide a great customer service experience that goes the extra mile which will result in not only happy customers who rebill every month, but potentially an even greater benefit is the word of mouth they can produce which brings you many more clients over time and so is worth a huge amount of money.

5. No backups – everyone knows (or should!) that backups are important to any business and so of course you need to make sure your backups are safe, up to date and restore-able. But in the IT services business this often also means you are responsible for the backups for your clients and needless to say if you mess this one up you’re going to be Mr Unpopular with that client. The above mentioned word of mouth will quickly take a turn for the very much worse if you fail here.

6. Bad sub-contractors – it is very common in IT work to rely on sub-contractors for various reasons such as expertise which you don’t have in-house or to cope with increased demand which your staff can’t currently cope with due to their odd refusal to work 24 hours per day. However it can be very risky and those sub-contractors can very quickly destroy the reputation of your business if they do poor work or act unprofessionally. Be very careful who you work with, make sure they can do the job well and will represent your business the way that you want and need.

7. Hiring the wrong person – hiring staff is never easy and many of the pitfalls are shared with sub-contractors. The wrong employee can rapidly sink your business and then move on to something new, leaving you to pick up the pieces and try to rebuild your shattered reputation. Always do appropriate due-diligence, talk with references, do suitable background checks, make sure qualifications are real and of course ultimately make sure they can actually do the job itself while also having a good attitude.

8. Not keeping up with the times – the IT business is particularly exposed to the onward march of technological advances and if you want to stay in business you need to stay on top of your game, not stagnate and become stuck in your old ways. Your customers won’t ignore new technologies that could benefit them, for example cloud computing (in some cases), and so you too cannot afford to ignore them or your business will soon become obsolete and find it increasingly difficult to acquire new customers or even maintain existing.

9. Out of the loop – your customers, particularly those who are on managed services recurring contracts need to be kept in the loop and up to date with what you are doing for them. Being proactive is essential and providing regular reports of work done, planned and considered along with reasoning behind major decisions taken should be included. You may think that just because you are keeping their systems working that they will assume they are getting their moneys worth but in fact it could well be the opposite and they may be thinking that they are paying you for nothing since their system has been so stable anyway! Make sure they know that the reason their system is stable is because of the work you have done and continue to do on it. Give them well documented reasons to have confidence in your ability to help keep them in business.

10. No business analytics – there’s a lot of data about your business which you could and in fact should be logging and analyzing such as hours worked by each employee on each account, number of tickets opened and completed, parts bought, deployed, repaired, scrapped, and much more. Failure to log and crunch such data means you have very little idea of what is really going on in your business at any point in time and are in effect flying blind when you could be making informed decisions on the collected data. How else will you avoid flying into that mountain looming ahead of you in the fog?

11. Benefiting the wrong party – there’s no point providing your customers with tools and services they don’t really need or want and ultimately won’t buy. They won’t be happy with you pitching them stuff that doesn’t adequately benefit them and being seen as out of touch with the industry does you no favors. Offering solutions from which YOU benefit the most rather than offering a solution the CUSTOMER benefits most from is a certain shortcut to unhappy camper land and we all know what happens there.

12. Bad accounting – not keeping proper track of your business finances is sure to lead to disaster sooner or later. You need to know if you’re making a profit or a loss, whether or not income and profits are heading in the right direction or the wrong one, you need to know how much it costs to acquire your customers and how much they are worth. Then of course you need to make sure you pay the taxman because otherwise he will bring down the hammer on you like the grim reaper with a scythe.

There are surely other ways you could perhaps irrevocably damage your business or at the very least hamper it but if you really do not want to kill your IT services company and instead aim to stay in business and prosper for the long term, you certainly don’t want to be doing any of the above!

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