I am just getting started in the business side of the tech industry and I am wondering if anyone had contacted their competitors before/during/or after you started your business? If so were you honest in telling them that you were starting up and likely to be their competition. And has anyone given or taken customers from a competitor, i.e., they are too busy to help and they refer the customer to you or visa versa?
Many thanks.
I think its a REALLY good idea to know all of your competitors personally. Here's why:
1. Partnerships. You never know what business opportunities will come of being on friendly terms with other professionals in the local area. For example, if you're talking to a shop owner and you do onsite, there's a natural link that can be developed to take on onsite work with them. If you're good at laptop repairs, and they arent, there's another connection. If they are a parts reseller and don't do repairs, theres a strong possibility of them referring to you once they know and trust you.
2. Prices. In order to set your price, you need to know what your competitors are charging. Whether you want to work on an 'average' or, say, 20% above the average, the only way to make this calculation accurately is to know what they are charging.
I do not advise under-cutting. It hurts everyone, and there's generally a reason the price is where it is. Charging too little will hurt your business, and once your prices are set your customers will expect to pay that rate, making it a PITA to raise.
3. Resources. Most people in this field start out with 'patchy' skills. Please understand Im not saying all beginners dont know what they are doing - what I AM saying is that unless you are a phenomenally skilled practitioner, you will have 'gaps' in your knowledge that will take time to fill. Another way of saying this is, no-one knows everything about everything. These gaps can be resourced by having local community connections with people who have strengths in areas you lack. (kinda like this board
) If you develop a referral system, or a working relationship that has benefits for both sides, people will bend over backwards to help you. Its invaluable to know "who knows what" and to be able to work with people that have skills in areas you don't
4. Where this comes from:
I was lucky in that before I started my business I had great relationships with a couple of stores who I dealt with extensively, and who knew I had good technical knowledge. Once I started out I intentionally kept and developed these connections, knowing they would come in handy.
One of them is a parts-only retailler who gives me all of their repair referrals. In turn I refer my customers to them for parts. Very profitable for both sides.
The other guy is a very seasoned tech who actually offered me a job about 6 months into my business. I had to refuse, as my business is my primary focus, but I kept working on the relationship by just going in and talking with him from time to time and buying parts occasionally. He's really good with large networks, which is something Im not good with. I refer jobs that are over my head in this regard and he throws some onsite work my way. We also phone each other with prickly issues when something comes up and just need to bounce ideas. More me than him but I have been able to help out here and there.
After I started out, I recognised that I needed a local supplier for laptop parts. I was lucky to find a guy in the local area who does chipset-level board repairs (something I can't do) and who has a massive range of parts. The relationship is very profitable for both of us. He repairs machines I cant repair (ie chipset jobs) and I then mark up the repairs and on-sell them to my customers. He's also a great resource for technical info about laptops. I sell machines for him and occasionally throw a direct referral his way to sweeten the deal. Its also a great way to turn jobs around quickly as if I need a bezel, or screen, or optical drive or whatever, he usually has something in stock - which is a lot faster for me than ordering online and waiting for delivery.
Hope it helps.
Jim
