Small VARs Find Strength in Numbers

Q&A: Jim Locke, founder of the Small and Medium Business Technology Network, talks about why partnerships are vital.

Jim Locke, principal of JW Locke & Associates, knows a thing or two about partnering. As founder of the Small and Medium Business Technology Network, aimed at small and midsize business VARs, Locke has spent the better part of the last year creating and promoting a forum where small VARs—such as his own company—can seek out partnerships to create new business opportunities.

Freelance writer Beth Stackpole recently caught up with Locke to get his thoughts on why partnering is increasingly essential to SMB-oriented VARs, to explore how to forge the most profitable relationships and to hear about whats next for SMBTN.

Why is partnering important for smaller VARs, and what kinds of benefits can they expect?

Partnering is especially important to smaller VARs because it gives them a range of opportunities and lets them appear bigger than they are. It can help level the playing field against larger vendors.

Say there are geographic areas that you dont typically cover, yet youd like to take care of a particular client. By partnering, you can cover those areas, whether theyre local or out of state. Partnering lets you leverage skills sets you dont have in-house or lets you deliver products or services you dont have.

For example, JW Locke does phone systems, but we dont do cabling. I know someone who does, and I let them do that work for me. That way, I dont have to be the small guy—I can be a general practitioner, but I dont have to do all the general practitioner work.

Theres also additional revenue to be derived by partnering. As a small shop, sometimes you bypass a particular engagement because you dont think you have the bandwidth to handle it. Partnering can help you balance your services. I added $100,000 to my revenue line this year based on that kind of relationship. I had a client that wanted to retain me for a much greater time period than I had available, and they needed a higher skill level than I had available. I couldnt take them on and balance their needs with my own staffing, and I didnt want to hire someone else, because it would eat into the profit. Through a VAR partnership, I didnt have to bypass this opportunity because I wasnt equipped for it.

When and why should an SMB VAR seek out a partnership?

Everyone should be partnering at this point, especially if youre a smaller VAR. It makes sense to look bigger than you are. Theres lots of work out there, and most [VARs] dont have enough manpower to handle it. You also can get coverage for vacations or an illness. It gives you more control into where your clients are purchasing technology because youre selling deeper into the account.

How do you evaluate a potential partner, and what are some tips for choosing a VAR that makes sense?

I didnt do partnering before SMBTN, and part of the reason was that it was too difficult to evaluate partners. SMBTN gives me the opportunity to get to know people so I can tell if they know a particular area or if theyre technically proficient. Its much easier through an organization—there has to be some structure or framework that allows you to get in with a group of smaller individuals to see if youre on the same page.

/zimages/4/28571.gifThe SMBTN picked up dozens of members on the East Coast, boosting membership past 400 and expanding group members ability to service clients in that area. Click here to read more.

The idea is to start small and pick partners extremely carefully. You have to find people who are a good match—they have to have a similar outlook on business and trade, and it doesnt hurt to have a similar client base. It would be a mistake, for example, for an enterprise-oriented VAR to partner with an SMB VAR because they have completely different ways of working.

The partner also should have a similar work ethic and deliver services more or less like you do. By starting with small engagements, you can make sure theyre qualified to do the work by your own guidelines—not just if theyre certified in a particular technology. They can have all the certifications in the world, but you need to know if the person just sat in a classroom for a bunch of months or if they can actually translate that work into the field.

You also need to know how the partner works beyond their technical capabilities. For instance, if you partner with someone and theyre doing work on your behalf, they cant just come back and say heres what I did—they have to provide a detailed report on the work that you then use to report back to the client and as a base for billing. Does it take three days or three weeks to get that kind of material from them? Depending on how quickly they take care of this kind of administrative work directly relates to how fast you get paid. Sounds like a small thing, but its not, and everyone does things differently.

Next Page: Why some partnerships fail.