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How a Small Dealer Closed a Techie to Get Himself into the Networking Business

14 May, 2004 By: Jay Wallus imageSource

How a Small Dealer Closed a Techie to Get Himself into the Networking Business

Standing before approximately 200 people at February’s ITEX Show in Las Vegas,
industry veteran Lou Slawetsky candidly laid out the current reality in the
copier/fax/imaging business. “Times are changing,” he proclaimed as he used
numerous charts, slides and graphs to illustrate his point. “The model is
broken, yes, but it is the old model.” Gone is the analog copier, he explained,
and entering is the era of connecting to networks and managing the documents in
the system.

exciting as the prospects placed in front of us by Lou appeared to be, I later
found that many of those attending his seminar had concerns about the issue.
Some of their anxieties revolved around the costs involved in training a
computer tech in networking.

hard could it be to work through the networking challenge facing the industry?
What does a small dealer really have to do to get started?

Connectivity Case in Point

I knew that my friend and dealer, Mike Kates, president of Copitex Business
Machines, Inc. in Stoughton, Mass., could shed some light on this issue. He had
found a strategy that worked well for his business, and could be employed for
any small to mid-sized dealer. He knows that many of the dealers out there are
hesitant when it comes to jumping into this “networking stuff,” as many refer to

do you know what you can charge for a digital machine to be connected?” Mike
asked me. “Remember when we used to just cross out the install and delivery
price on the sales order?  Not with this; I’m getting $300 per install.”

explained his first step was to find an outside, part-time IT person. Knowing
little about the IT business, Mike opened the Yellow Pages and started calling
every small independent computer networking company, which there were plenty to
choose from. He discovered that they were great at setting up networks, but
awful at selling. In fact, most of them, he said, were looking for ways to get
more clients and were eager to get steady work.

trick I had to pull off was to devise a strategy that would allow them to get
more steady work so I could get my machines installed,” Mike explained. “This
would give me time to learn more about computer networking.”

negotiated with a single-person company and worked out a deal to pay $150 for
each install. The price was good for two hours of networking time--no more. If
the installation went over the two-hour limit, the client would pay $150 per
hour thereafter. In addition, Mike worked out a deal with his new IT partner
that allowed his techs to go along on calls to learn more about setting up a

then set up his clients up with an initial five-hour block of networking time at
$150 per hour--$75 of which went to the IT company. This was a bargain for
clients who typically paid $200 per hour for networking. Clients would contact
Mike and he would in turn, call the IT company to schedule work.

all the appropriate language already in the IT company’s contract, Mike was able
to design a contract that was both professional and concise. 

Eventually, when business increases, Mike hopes to bring the outside IT person
on board and pay him an annual salary of $50,000 with benefits. “He said that
he’d like to close his business and come on board full time,” Mike said. “He
also said that he would love to train all of my techs to get them up to speed if
I would promise him that he’d be hired as the company “network engineer” when
the company could support him. Why wouldn’t I do this?”

get this person working full time, Mike explained he would need approximately
two installs per day guaranteed. In addition, he would need to start making more
money on service installs, clicks and other newfound blocks of time revenue. “At
the rate I’m going now, I’ll be there within a few months,” he said.

I spoke with Mike, I realized that it wasn’t necessarily the networking
“problem” that dealers had to overcome. But it was how that “problem” had to be
viewed, which was the overriding difference. Where there’s a will, there’s a way
– if you want there to be.

the way, I spoke with Mike a couple weeks ago. “Jay, my sales guy was out at
ITEX and he said that there’s tons of margin in this document management stuff,”
he told me excitedly. “I was doing the numbers and realized that if I sold just
one of those systems a month that it would add over $100,000 a year to the
company’s revenue!” I countered by pointing out he knew little to nothing about
document management. “Jay,” he said, “you know me, by this time next year I will
[know about document management], especially for $100,000 a year in revenue. I’m
going to learn!”

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