astro posted on March 24, 2010 08:28
[Folks - this are my preliminary results - you cvan still participate in the survey at http://www.surveymonkey.com/s/Q9CBN2S for another 48-hours]
Vegas Wants You Baby!
In this world, we don’t hear enough compliments. Too often it’s a customer with “feedback” disguised as a criticism or backhanded compliment. It’s the tough side of business and while you can get used to being “Monday Morning Quaterbacked,” sugar still goes further than vinegar. So before you go one step further, put that iPod on to your favorite happy shiny music and enjoy my complements: you brilliantly survived the downturn of 2008-2009 and are very optimistic for 2010+ according to our 4th Annual SMB PC magazine salary survey (by-the-way, this is better thought of as a compensation survey because the SMB Nation tribe draws its compensation in the form of salary, owners draw and 1099-contract work).
You can also be proud as a Comcast/NBC peacock when you also consider how desirable you are. Broadcasters want you to watch their shows (and patronize their advertisers), HD radio stations want you to tune into their tunes and Las Vegas wants you to visit and spend your hard earned dollars!
Just the Facts!
Here is an at-a-glance by the numbers summary of our 4th annual SMB PC Salary Survey!
• Earns $101,000 to $125,000 USD individually each year
• Runs a consultancy/reseller practices with two to ten employees
• Is the business owner
• Has a four-year college degree
• Mid-career with 15+ years professional experience with half of that time served in the SMB segment (e.g. six to eight years).
• Serves over 20 customers for each consultant and those customers have more than 11 desktops. Note this response category was widely dispersed – see the analysis below.
• Earns 30 percent or less of revenue from the “MSP” recurring revenue model, suggesting amazing opportunities exist to be MSP-ified.
• Purchases through a distributor (over 76 percent!)
• Is positive and optimistic about the economic prospects in 2010!
What We Know To Be True
Mathematical constants can be surprisingly comforting. After buffeting the economic storm we all witnessed the past couple of years, it’s great to know a few things did not change much.
Education
Over half of the SMB channel partner community has a four year college degree or higher. Specifically 40 percent have a four year college degree. Another 13 percent have both a four year and Masters Degree. The old adage of “Joe the Computer Guy” that conjures up images of a blue-collar tradesman is increasingly a less representative and less accurate visual image of our SMB Nation tribal members. I’ll have to come up with a new catch phrase like “White Collar Willy” as we quickly head into an “in all” cloud computing world where knowledge is power! The good news is that you’re armed, educated and ready to hunt up in up in the clouds!
The MBA for the “rest of us!”
I am thrilled to announce that we’ve teamed with Aspen University to create the accredited SMB Nation Pocket MBA certification. This is a graduate-level curriculum for the SMB Nation tribe that offers a bona fide educational opportunity and pathway to earning a real MBA. Here is my story. For the past couple of years, we have massively debated within the four walls at SMB Nation to offer a “starter kit” for new people to enter the wild and whacky world of SMB technology consulting – a basic career changer kit. We also thought of providing an advanced “starter kit” for our existing SMB Nation tribal members. But during the product research phase, we discovered a few things about us and you.
• Does the world need another starter kit? Starting with the burgeoning field of “business coaches” and ending with Robin Robin’s technology marketing toolkit, we concluded that the world doesn’t need another “How to Be a SMB Consultant toolkit” and we want to honor that sentiment.
• Our academic DNA! My professional background includes 12+ years as an evening adjunct instructor at some mighty fine academic institutions. Someday when I exit technology –say within the next ten years – I hope to return full-time to the academic community. But for today – providing the accredited Pocket MBA to our community with Aspen University, meets my need to help better the lives of others! By-the-way, I can happily report to you that I have joined Aspen University as the Dean of the School of Technology. I perform this role from my Bainbridge Island home base in addition to acting as CEO at SMB Nation. Yes – I’m trying to invent 25-hour days and 32-day months to fit it all in!
• You’re not a newbie! With the introduction of the Pocket MBA, we feel we’ve right-sized our academic offering to align with your experience level. As you will read shortly, you’re not a newbie! Rather, you need to reinvent yourself in a cloud-based computing world. And that’s where our Pocket MBA has maturity matching and mission fit for you, the SMB Nation tribal member!
• Life Learners. When you made a decision to be a technical professional, hopefully you were fully aware of how the game is played? It is incumbent and in your best interests that you are constantly learning both the technical and business-side of your craft. Our SMB Nation Spring and Fall events offer the in-person educational experience plus “Hallway 101” networking. The accredited Pocket MBA is a 16-week online educational experience.
• Room for both? Hey – the “kit sellers” are my friends and I don’t mean to suggest that the Pocket MBA is better than the starter kits; it’s just differenent. In reality – you probably want to consider multiple educational resources. All of these opportunities are not mutually exclusive.
Want to learn more about our accredited Pocket MBA? Look under the Education menu at SMB Nation’s site (www.smbnation.com) and attend the SMB Nation Spring conference April 30-May 2, 2010). My opening keynote is about the Pocket MBA!
And the news just gets better! We have zero high school drop outs in our survey results. No slackers in the SMB Nation tribe!
Aging Gracefully!
Consistent with past salary surveys, you and I both are gaining more experience each and every day. The most popular response category for the years in the IT industry was 15+ and over 89 percent of the SMB nation tribe has eight or more years of professional IT work experience! You have been in the SMB channel for, on average, six to eight years, reflecting that you likely came from somewhere else such as the enterprise IT space. In fact, when asked where you came from, 37.8 percent indicated that they are from the enterprise IT segment and “came down” to the SMB Nation! That exceeds the 31.3 percent who organically and originally entered the SMB channel. Because it’s rude to ask a lady her age, we did not ask for your specific age but anecdotal evidence suggests is mid- to late 40s. But hey – today’s 40s is yesterdays 30s!
It Takes One To Know One!
Say this tongue twister ten times fast: “You’re a small business serving small businesses with small business solutions like Small Business Server.” I know that you and I wouldn’t have it any other way and it most accurately sums up our company size and customer base questions. Nearly 70 percent of the SMB Nation tribe has two to ten employees; just under 20 percent of you are one-man bands or sole proprietor. Over two-thirds of you are the OWNER of the SMB IT consultancy, a highly desirable demographic amongst sponsors as advertisers as YOU are the DECISION MAKER! This tells me you KNOW how to run a small business successfully as a finder (get the business), minder (run the business including HR) and grinder (do the work at customer sites). Take a bow – any of those three areas would be tough to master; you’ve successfully conquered all three legs of the small business stool!
And who are the small businesses that you serve? Few of you are verticalized, something that confounds enterprise-level IT analysts when they look at our SMB segment. Half of you serve 20+ customers per capita (per consultant) with over two-thirds of these customers having more than 11-desktops. But the numbers do not tell the whole story. The data set is widely dispersed (e.g. everyone has the “one” large mid-market customer with 100+ desktops) and measured differently. Other sources studying our space will report that the “average” Microsoft Partner has 36+ small business customers. We map to that and more when you look at the partner entity and don’t measure on a per capita or per head basis. This is where I hope my analysis adds value for you. The data sets have to be massaged to get “Apple Computer to Apple Computer” comparisons (pun intended).
NOTE: At press deadline, Microsoft was completing its SMB economic study. I will compare and contrast our salary survey to this Microsoft study in my blog at www.smbnation.com and a future issue of SMB PC magazine.
Income: Even is the new up!
Surprisingly consistent with past survey results, over half of y’all make $81,000 USD or above with the most popular response category being $101,000 to $125,000 (note that all financial discussion is in USD). Welcome to the land of six figures baby – Vegas definitely wants to meet you! Understand that the conversation we are having is how much you paid yourself in total cash compensation. We did not survey for the little perks like that new home theater plasma TV you bought with the company credit card as a “computer monitor.”
The business entity you work for or direct has the following financial look and feel. Just over 53.3 percent of the respondents have company-wide revenue in the range of $250,000 to $300,000 per year. The most popular response was company-wide revenue between $1,000,000 and $3,000,000. Take a serious bow because building an economic entity that exceeds $1M in revenue is considered a significant achievement.
Note that the correlation between the size of entity and overall revenue is extremely strong. The larger the company, the greater the revenue. But be aware that these income and revenue figures have remained surprisingly consistent over the past four years and correlate strongly to other salary surveys in the SMB segment (e.g. Redmond Channel Partner’s annual salary survey).
EXTRA EXTRA! SMB Nation Tribe Is OPTIMISTIC!
Wow – even though economics is called the dismal science, you’re an optimistic lot. This next part of the survey gave me positive juice and I hope it does the same for you. Over 82 percent of YOU answered “even” or growth rates ranging from 1 percent to over 50% when asked “For the forth coming 2010 tax year, please predict how your individual compensation will be impacted.” Right on – that means we’re on the road to recovery baby!
And the news only gets better. A filibuster-proof majority (65 percent) believe you will have significant income growth with the most popular response being 6 to 10 percent overall growth. We also asked the same type of question where we measured your “sentiment.” Over 65.2 percent of you replied you are moderately optimistic or optimistic about the economy in 2010.
The MSP Greenfield
If you believed what you read in the papers, you’d think you couldn’t swing a dead cat in the cloud without hitting a managed services provider (MSP). Such is not the case. Here is a spooky-scary reality check. Approximately three-fourths of the SMB Nation community (73.8 percent to be exact but I like to round up) make 30 percent or LESS of your revenue from the recurring managed services/MSP business model. That suggests that there are challenges in your conversion from the break-fix and billable hour business model to recurring revenues. It also suggests that Autotask, ConnectWise, Tiger Paw and other professional services automation (PSA) ISVs still have significant opportunities. This “30 percent” threshold also confirms what I’ve heard in major speeches from MSP trade groups that you can proudly identify yourself as an MSP if even 30 percent of your revenue comes from the recurring business model. This commonly held belief and our survey results beg a bigger question. Is there anyone out there making 100 percent of his/her revenue from the MSP recurring revenue business model? Drop me a note if you are this person, and upon proof, I’ll give a complimentary attendee pass to you for the SMB Nation Spring 2010 event in several weeks! Shouldn’t such efforts be rewarded? (Limited to five award winners).
Need further proof about the impact of the MSP business model in the SMB community? We asked how do you bill your customers and over 80 percent of you indicated hourly. This makes sense to me I that you probably have a couple of different billing models but the majority of community members bill the vast majority of their revenue in a billable hour format.
I have a question for you that we will better survey next year. With the cloud computing paradigm shift upon us here and now, will that make it easier for you implement a recurring revenue model? Let me know!
One Fun Fact: Distribution
We asked a few interesting questions outside the normal compensation realm.
Over 76 percent of you use a distributor to make your purchases with Ingram Micro the most popular followed by D&H. The balance was divided between NewEgg, Tech Data and Synnex in the order of popularity. Multiple responses were allowed as it’s possible to source from multiple distributors.
Conclusion
The vote is in and the fact is you’ve carved out a nice niche in life. Attitudinally we know the SMB Nation to be happy, fat and sassy. Statistically you’re successful by any measure. And that should only improve as the broader macro economy continues its march from survival to “thrival!” Wow – I just created a new word beyond thrive! And just in case you have a low self-esteem, with economic looks like yours, Vegas wants you baby!