Avoiding Doing It All Yourself By Finding Partners

When you’re starting out in the computer repair business, you to take whatever business comes your way. You have to make ends meet. As your business matures, you’ll realize that model isn’t sustainable.  Instead, you’ll need to figure out ways of not doing it all yourself.  Afterall, you don’t want to turn away good clients (and money).  The secret to that seemingly contradictory ideas is to find good business partnerships.

Staying Independent, But With Business Partners

When I first heard the word “partnership,” I immediately thought of a legal business partner. As a sole proprietor, I wasn’t the least bit interested in something like that.  I’m fiercely independent and I want to stay that way.  That doesn’t mean I can’t find businesses to work with.  I don’t need to change my legal structure, but I do need to decide what’s important to me.

Specialize and Be The Best At What You Do

Much like we don’t want lawyers working on their computers, lawyers don’t want us to write our contracts. The more specialized you are, the better you’ll be at what you do. Practicing these new areas is the key. You might enjoy “dabbling” in other areas of computer repair.  That can be fun. remember, though,  you probably won’t be as good as your competitors in that new area.

For example, while I know how to work on servers in general, I don’t keep up with the latest trends.  I don’t have the experience to solve most of the typical problems that come up.  I compare my skills to someone who works on a server every day as part of their job.  They’re a professional at it; I’m an amateur.  Similarly, I know techs who sometimes fix Apple Macintosh. Fixing Macs are core to our business and we do them every day. We’re going to be better at it than the PC-focused shop that works on them once a month.  We know the workarounds and tricks to get the job done right faster. Just like those of us who’ve dabbled in websites, our lack of design and graphic arts experience shows.  That’s where professionals like TechSiteBuilder can help.

Try New Skills In Limited Trials

Don’t get me wrong; there’s nothing wrong with expanding your skills in a new area. That’s how you grow as a technician and a computer repair business owner.  The problem starts when you’re selling your services in that area as an expert.  If you’re not taking care of the customers because of your lack of experience, that hurts your core business.  When you take on new projects, you need to prepare everyone it may take longer.  An expert would get it done faster and better.

Business Partners Fill The Gap

Between that time of specializing and becoming an expert, clients still want new services.  They’re calling you not just for your core business, but all sorts of problems.  Those clients might be asking for you to do wiring or web design.  The more popular you become in your community, the more likely you’ll get ancillary requests.  Your clients trust you and refer business to you. They just don’t always know that installing a DVD player into a TV system is different than installing it in a laptop.

You never want to tell a client you don’t provide that service and leave it there.  Once you say no, you’re cutting off the referral stream from them.  They’re less likely to call you in the future.  You’ll want to have a solution for them, even if you’re not the one providing it.

The Simplest Option:  You Refer Us, We’ll Refer You

A reciprocity agreement means that you’ll refer clients to a business partner, and that partner will refer clients to you.  This informal agreement doesn’t need to be signed or specified any further.  When a client asks for web design, you can refer them to one of your business partners.  When that web designer has a client that needs computer repair, they refer you.

These agreements don’t have to be mutually exclusive: they aren’t required to refer you.  They can refer their clients to other computer repair businesses and you can refer your clients to other business partners. The advantage of more than one business partner is you’ll have a larger pool of clients to draw from.  If you have a relationship with five web designers, you’ll get five times as many referrals.  Of course, their referrals to you might be diluted among other computer repair businesses.

Mutually exclusive relationships work best when the partner is someone very well-known in town.  They’ve got the lion’s share of the business in a particular area. When you’re their exclusive partner, you’ve cornered the market.

The referrals don’t need to be computer-related.  You might specialize in Point of Sale (POS) systems for restaurants.  Restaurants need suppliers for food.  If you refer your clients to a particular food supplier, that food supplier might suggest your services for POS systems.  One of the best referral relationships I have is with a local coffee shop.  When he has a computer problem, I fix it at no charge. I get free coffee while I work there.  Since people often come in with laptops, he keeps my business cards at the desk and hands them out.  Anyone you regularly do business with is a good referral partner.  Just let them know you’re referring to business and you’d appreciate they do the same.

More Complex: Commissions and Referral Bonuses

The larger the project and billable hours you get from a particular client, the easier it is to pay for that opportunity.  How much is a new client worth to you or your business partner?  If you do break-fix work, that client may only be worth one billable hour.  A large company signing an MSP agreement could be worth thousands each month.

Depending on your relationship with your partner, you might choose to pay a one-time fee for the closed business (a.k.a. a bonus). Another way is to pay an ongoing percentage based on billed work (a commission).  I’ve been in both situations.  Bonuses are easier for one-time projects while commissions are better for ongoing relationships.  The commission doesn’t have to be in perpetuity.  You might agree with your partner that the commissions keep paying out for a few months or a year.

Unlike reciprocity, these agreements usually need some writing them.  You’ll need to agree on what’s going to be paid for the closed business (or just a qualified lead) when it’s going to be paid (monthly, quarterly), and how it’s going to be paid (cash, check, gifts-in-kind?).  If you don’t’ write this stuff out in advance, a misunderstanding comes later down the line.  That misunderstanding compounds when one of your businesses changes structure or ownership.  A new sales manager might not realize you had an agreement with the predecessor.

Depending on your jurisdiction, you’ll need to disclose any of your remunerations.  In the United States, the FTC keeps strict rules about endorsements. Even if it wasn’t the law, letting your clients know about your bias protects your integrity.  Clients need to know why you’re referring to a partner. You don’t need to tell them how much money you make off a referral. You’ll need to say there is a financial interest in your recommendation. I usually say “I think they’re a great company.  They give a small bonus for referring people to them, but I’d do it regardless.  I use them for my business needs as well.”

Subcontracting and White Label Services

If you want to be more of a one-stop-shop for your clients, you’ll need to find people to do the work you’re not great at. This business model is common with home construction.  A general contractor finds all the outside people who do the work to build or remodel a home (a subcontractor).  In our industry, platform companies like OnForce use this model.  They accept the job and then find other people to do it.

With subcontracting, the client doesn’t have to know you’re doing this.  They contact you for the services and pay you.  If you don’t have the expertise on staff, you find someone that does.  I see this with laptop and mobile device repair.  When you accept the device, you send it off to get repaired.  When it comes back, the client pays you and they’re none the wiser.  An expert repaired the device and you made some money on the side.

Risks of Any Partner Agreement

All of these arrangements let you take care of your client’s needs without having to be an expert at everything.  They allow you to make some extra money and keep your relationship with the client.

Whichever structure you choose, your partners will reflect on you.  When they do a lousy job, the client comes back to you to complain.  If the work is bad enough, you might lose the client.  For example, I hired a landscaper for my backyard.  She said a tree needed to be removed and referred me to an arborist.  The arborist took weeks to get the job done, disrespected my home, and refused to leave my property without payment.  The experience was bad enough that I lost confidence in the landscaper.

In a reciprocal arrangement, the risk is that you’ll refer business but won’t get any back.  That’s a greater risk if the relationship isn’t mutually exclusive.  You might send dozens of clients to your partner and not get anything back. In a particularly unhealthy relationship, they’re sending your clients to your competitor.  That happened to me once.  I was referring clients to a web designer.  That web designer told my clients to use someone else for computer repair.  The nerve!

With financial incentives, you’re never quite sure if your getting paid the right amount.  The business partner might not give you accurate numbers.  This could be through willful deception or just sloppy accounting.  You might refer a client, but your referral isn’t recorded properly.  Six months later you find out the client is using your business partner, but you didn’t get paid.  Even worse, the partner’s paying someone else for the business.

If you subcontract (or white label), your partner’s work is presented to the client as your own.  At one point I outsourced some laptop repairs.  When the client came to pick up the laptop and it wasn’t working to their satisfaction, I couldn’t say it was someone else’s fault.  Yes, it was my partner’s fault, but the client paid me and I need to take ownership of the problem.

Reducing the Risk:  Staying In Touch

The solution to most of these risks is to stay in constant communication with both your clients and your partners.  With your clients, you need to follow up and make sure they’re satisfied.  If you’re referring a client to your business partner, check-in with the client and see how it went.  If it didn’t go well, let the business partner know the situation.  With both the client and the partner, try to resolve the situation with good customer service.  If the partner continues to be a problem then it’s time to drop them.

Similarly, let the business partner know you referred them business.  Follow up with the partner and see how it went.  If the referral wasn’t a good fit, find out what went wrong so you both can learn for the future.  If you haven’t referred businesses in a while, just check in with them on a professional level.  Ask them how you can help send more of your clients their way.  If they haven’t been sending you business, ask for a short meeting to train them in how to refer clients to you.  They might not know what you do or just plain forgot.  Track these referrals in your CRM system.  If you’re working with a financial incentive for referrals, speak up if the numbers don’t match up.  If you’re staying in constant communication after each referral, neither party should be surprised when payment is due.

If you’re subcontracting, you’ll need to follow up more with your clients as to the quality of work.  Assume the work wasn’t to your level of quality and look for problems.  That process starts from the minute you take possession of the hardware or start the job.  If the work isn’t the agreed quality, take ownership with your client about the problem and offer to make it right.  Don’t blame someone else for the work your client paid you for.  Always feel free to walk away from a contractor if the work is reflecting poorly on you.  It’s better to stop offering a service than to offer a service that brings down your reputation.

The best part of partnering is you can offer new products and services to your clients.  You won’t take on the expenses of inventory, tools, and training.  The secret is finding the right partners and the right arrangement.

Written by Dave Greenbaum