3rd Annual SMB Salary Survey
By Harry Brelsford
Good news! We’re a successful and optimistic lot. Choosing a career path as an SMB consultant and channel partner has rewarded us in good times and allowed us to survive and thrive in bad. We’re sleeping soundly at night, masters of our own destiny as owners of our consultancies and not beholding to a boss or layoff threat. It’s the best of times amongst the worst of times, and you believe you’re going to get through this economic epoch.
Welcome to our third annual salary survey. Stick with me, as I truly believe the surprising results will daze and amaze you. This year we asked about all that standard stuff—like education, experience, and income—that allows us to have year-over-year comparisons. But we have now added interesting questions allowing you to determine who/what is HOT or NOT in the worlds of social networking and blogging.
It’s an Attention Deficit Disorder (ADD) world where folks like information instantly. I’m not one to stand in the way of the social mega trend, so here you go—just the facts from our salary survey followed by in-depth analysis.
Core Data from Respondents
- Has a four-year undergraduate degree
- Has been in the IT industry for 15+ years
- Has worked in the SMB segment for 9 to 12 years
- Is located in the USA (83.5%) but could be in Canada, Ireland, Australia, India, Germany, the Netherlands
- Is self-employed as the owner of a consulting entity (75.6%)
- Is a one-person consulting entity (26%). Overall 63% of the respondents worked in a consulting practice with five or fewer employees/coworkers .
- Serves 15 customers individually, so a five-person SMB consulting entity would have 75 customers.
- The customer has, on average, 15 desktops but it seems like just about everyone has the “one large customer” out there (even though the polling data didn’t pick this up well with the “mean” statistical measure).
- How did you make it? Compensation occurs in three ways: contractor, employee wages (W2 in the USA), or owner draw, and we found it was a combination of the three. The bulk (60.8%) of the compensation reported by respondents came in the form of a paycheck as an employee of his/her consulting entity.
- The most common response for overall consulting revenue at the company-wide level was $1M to $3M at 17.5% of the answers. But there was really no consensus, as revenue was spread out over numerous response categories. You should read or blog to see the full results.
- Now the GOOD STUFF. How much DID YOU MAKE? There are two answers here.
- The most common answer at 12.1% was $101,000 to $125,000 USD.
- But the weighted average was approximately $80,000 USD for the third year in a row. Let’s face it—the SMB consultant has a take-home pay of $80K USD and he/she = HAPPY ABOUT IT! It’s a good life for many compared to the humble beginnings many respondents had.
Who’s HOT and Who’s NOT!
We added several new questions to better understand you—where you go and what you do. Along the way, we got to know you better. You have a high need for affiliation, with 58.8% of “you” belonging to a SBS or SMB IT Pro USER GROUP! Other notable affinity group mentions included (in order of strength and over 10%):
- Robin Robin’s Marketing Groups
- MSP University
- SMB Technology Network (SMB TN)
- Jeff Middleton’s SBS Swing Kit/Groups
- MSP Service Network
- ASCII Group
Lagging in the single digits were HTG Peer Group, IAMCP, ICCA, NASBA, and Culminis.
Up in the blogosphere, the top five bloggers that you follow are:
- Susan Bradley – SBSDIVA (50%)
- The Official SBS Blog (42.2%)
- Karl Palachuk – Small Business Thoughts (24%)
- You had me at EHLO (20.8%)
- Robin Robin’s Marketing Genius (19.5%)
Note that even though my SMB Dude blog pulled the highest number at 52.6%, I’ve recused myself from this list because I conducted the poll. (What would you expect!) I was also sad to see the MS Small Biz Blog from Eric Ligman pull only 16.2% of responses and not crack the Top 5.
When it comes to information hunger vis-à-vis the newsgroups, you gather your information from these top newsgroup sites, listed in order of strength.
- Microsoft SBS Technical Support Newsgroups (official Microsoft) (36.1%)
- Yahoo! SBS Newsgroup (sbs2k)(25.7%)
- Yahoo! Small Business IT Consultants (smallbizIT) (25%)
- Yahoo! MS Small Biz (mssmallbiz) (22.9%)
- Smallbizserver.net newsgroup forums (22.2%)
With respect to social networking, the sites and tools you use are:
- LinkedIn (75.4%)
- Facebook (64.5%)
- Twitter (25.4%)
The magazines your read include Redmond Channel Partner, VAR Business, CRN, ChannelPro SMB, SMB PC (that’s us!), TechNet, Windows IT Pro. The magazines on this short list with the highest read rate were Windows IT Pro (80.3% open rate) and Redmond Channel Partner magazine (77.6% of you who receive it actually read it). In the electronic realm, the Windows Secrets e-mail newsletter was the most mentioned as read.
More HOW DO YOU MAKE YOUR MONEY?!
Let me ask the following question. Does the term “Value-Added Reseller” (VAR) still make any sense or is that an old-school phrase? I suggest we look for another term to define us, such as “Trusted Business Advisor” because of the following data.
What percentage of your revenue comes from product sales versus services?
- Product sales (26.7%)
- Services (74.64%)
And talk about headroom. When asked a question about managed services as your revenue source, you replied with the following eye-opener (short answer = very little).
- 0 to 10 percent 32.3%
- 10 to 20 percent 18.3%
- 20 to 30 percent 10.2%
- 30 to 40 percent 9.7%
- 40 to 50 percent 4.8%
- 50 to 60 percent 3.2%
- 60 to 70 percent 9.7%
- 70 to 80 percent 6.5%
- Above 80 percent 5.4%
The above shocking numbers would suggest good days ahead for Arnie (ConnectWise) and Bob (Autotask) and other players like Tigerpaw!
The Best for Last!
Alrighty, I’m not going to hold out any longer! This is a serious STOP THE PRESS and RUN A SPECIAL EDITION moment. Approximately 75% of the respondents expect their compensation to remain the same (that’s 31% of the lot) or INCREASE in 2009. That is amazing optimism, and I share it with you. The chart below reveals the full response set.
When asked to find words to describe your feelings about the future (related to the economic cycle, your business model, etc.), here are selected phrases that cover the full spectrum: We continue to grow; Smooth seas ahead!; Holding strong, poised for growth; Needs to be stronger with more business action; Fewer HW/SW Sales, more Managed Services; So far, not much effect; Sucks big time!; Ducky…
Correlations to the 2009 SMB Insight Report
I have read with interest Microsoft’s recent SMB-related survey and highlighted several items that relate to our own salary survey. Note there is a slight difference in timing and methodology. Our salary survey had over 225 respondents (worldwide SMB Nation tribal members) in late April 2009; the Microsoft 2009 SMB Insight Report is based on 603 Small Business Specialist (SBSC) interviews in the US, the UK, Canada, France, Brazil, and India in February 2009.
Highlights from the 2009 SMB Insight Report include:
- SMB IT Spending: 55% of SBSCs forecast the same or higher spending among SMBs.
- Reducing staff and IT costs are the most often cited survival technique by SMBs customers to SBSC consultants. The “relationship” of the SBSC to the customer will involve assisting in finding these cost reductions in 2009.
- Backup, IT consolidation, virtualization, mobile solutions, and security lead the opportunities in 2009.
- Unified communications (UC) have the highest level of demand among productivity tools. VoIP ME! A best practice would be to visit our SMB VoIP site, Telephonation (www.telephonation.com) which already has more traffic than our traditional SMB Nation Web site (www.smbnation.com).
Here’s what the numbers don’t necessarily tell you. Maybe you could have made more money if you were a lawyer or doctor. But you LIKE what you do and that’s why you do it. I hear this time and time again in my Hallway 101 conversations with SMB consultants. Most of you wouldn’t trade your day job for nay—except more fishing time. It’s not just the money, but you derive significant happiness and professional satisfaction from what you do. It’s called community, and we’re all in this together. So here’s a toast to happiness, health, and wealth! This column spoke directly towards the wealth component—you’re on your own for the other two. Cheers!