Learning from the SMB 500

Ingram Micro’s SMB 500 are a force to be reckoned with. These fast-growing solution providers—our most successful partners—have higher growth and revenue benchmarks than their industry peers and serve as a yardstick for the industry at large.  Here are a few lessons to take from their success.

Think Ahead
Research company The 2112 Group found in 2012 that while 45 percent of industry solution providers don’t have a formal growth strategy, those that do have higher annual revenues, profits and rates of growth. Our SMB 500 partners are adept at business planning. They tend to set goals in at least three-year increments, with our more seasoned partners thinking in terms of eight to 10 years.

Aim High
Companies that set high growth aspirations are generally more successful than those that set low goals hoping to over-deliver. The average aspirational growth rate of our SMB 500 companies is greater than 40 percent annually, compared to the channel average of 26 percent. Additionally, the older the SMB 500 company is, the higher its growth goals tend to be. As business structure solidifies and management becomes savvier, our SMB 500 partners are learning to aim higher than their younger counterparts. Experience counts when it comes to business planning and the operational execution that results in growth.

Mix it Up
Within the SMB 500, we’ve seen that companies with the highest revenue and growth aspirations are those with a hybrid business model. While 2112 Group research has traditionally found that managed services offer the highest margins—as well as the prize of a recurring cash flow—the SMB 500 companies with the highest growth don’t deal exclusively within this market. Our fastest-growing partners, and those most confident about their future growth prospects, are those who mix it up with conventional product sales.

Understand Your Customer
SMB 500 partners have relatively low product return rates, with two-thirds having average to low return merchandise authorization (RMA) rates. From a CRM standpoint, this means these businesses are doing an outstanding job of understanding their customers and assessing their needs. The result: Product is less likely to be returned, end users are happier and our partners are more likely to win repeat business.

The Bottom Line
Growth is rarely accidental. Success is the result of planning and execution, as demonstrated by the many thriving companies on the SMB 500 list.

Like this post? Be sure to check back for our follow-up post about the SMB 500, which will address how to overcome common SMB mistakes and barriers to growth. For more information about the SMB 500, please visit http://im-smb.com/smb500.

Guest blogs such as this one are part of The VAR Guy's Business Acceleration InfoCenter.