Earn 40% Margins Selling VoIP To SMBs

Even though the SMB market segment represents an overwhelming majority of all businesses, it is still greatly underserved by VARs. Additionally, according to a recent study conducted by Info-Tech Research, only 16% of companies with fewer than 100 employees have implemented VoIP. There is other research that indicates these trends are changing, however. Nearly 1/3 of the more than 350 North American SMBs – businesses with 20 to 500 employees – surveyed by the Computing Technology Industry Association (CompTIA) said they intend to buy new phone systems or make significant new investments in their current phone systems in the next 12 months.

Barry Gerhardt, president and CEO of VAR Barry Communications, is banking on the SMB market adopting the latest networking technologies such as VoIP and network security. Gerhardt's hope isn't in analyst statistics only. He currently has approximately 1,200 customers that he sold Nortel Norstar (i.e. traditional phones) systems to in the past, but Nortel is no longer supporting a majority of these legacy systems. Within the past year, Gerhardt has made significant changes to his business, including adding two SMB VoIP vendors to his line card – Allworx and ShoreTel. Probably the most intriguing part of Barry Communications' business model is the way he is providing total VoIP and networking solutions to his customers, complete with professional and managed services. Within the first year of adding SMB VoIP solutions to its offering, the VAR is already attributing all of its projected sales revenue growth coming from this segment.