Choosing Business Specific Software – part two
In part one, we explained what vertical market software is, and why it matters. In part two, we will discuss finding and evaluating niche software products.
How small is your business niche? There might be 500 businesses like yours in the United States today, or 50,000. There are roughly 30,000 to 40,000 liquor stores and about 100,000 salons. Wikipedia says that there are 67,000 pharmacies with about half being inside drug or grocery stores and presumably about half are independent. Something like a tent rental business (think weddings and bar mitzvahs) is probably much smaller. But it doesn’t matter – because, no matter how small your niche is, there almost certainly a software package designed and written exactly for your business. Our Rental Software category, itself a niche, contains a dozen unique listings for very specific software for tent rental, auto rental, tool/equipment rental, event staging rental, among others – and that is just a small portion of what is available.
Evaluating the software company
Many of these vertical market software companies have deep roots in their niche. Often, in talking with hundreds of software companies over several decades, I have found that they know their industry inside and out because they worked in a family business and have lived it! There is nothing like deep experience in a niche to be able to guide software development for that niche. Not surprisingly, many of these software companies are twenty to thirty years old. Their software has been through several generations of computer technologies – from DOS based PCs (or even older equipment) , to Windows, to tablets and other devices. Their software is often more stable than the software from young companies. Not surprisingly, they have hundreds or thousands of clients running the software and downtime is simply not allowed.
There is some heavy duty upside to going with a company like that. Not the least of which is that when you call a small niche software company for support, you’re likely to get someone on the phone who, if they did not grow up in the business, is directly reporting to someone who did. So, your support issues can be handled without a tap dance by the vendor. Also, since their products are mature and stable, they are less likely to have long hold times. Some older software companies pride themselves in picking up every support call within one minute. That’s a far cry from the generic accounting software product I use – where it can take me ten minutes just to find the carefully hidden telephone number for tech support. And then 20 to 30 minutes on hold to reach someone who will read me a (generally useless) answer from a script.
These older companies are also proven – they have weathered four or five major economic downturns, they are profitable and self-sustaining, and they are not dependent on venture capital to survive.
Evaluating niche software
So, how do you evaluate niche software? A mature software company will have clients with businesses very much like yours in every state. If you are in the process of choosing a product to run your business – I would get a reference from the software company, and drive an hour or two if needed, to get to an identical business who is not going to be competitive with you. Very likely you already know other business owners in your niche from meeting them at trade shows or conventions. I would then spend time with that business owner or manager and ask for a demonstration and suggestions from them.
Most business owners are happy to do that, as long as you are not in direct competition with them. Generally, people are happy to give advice and input – both because they enjoy it, and because helping others is good karma. In my 35+ years in business, I have often gone to others for advice – even direct competitors on occasion. Five out of six owners are usually happy to talk to me. Not that we discuss confidential information, but, as Napoleon Hill says, bringing two productive minds together is a good thing.
Secondly, most companies will offer a trial period. Today, more and more software products are sold as-a-service. (SaaS). So you are going to be paying monthly without a long term commitment. That’s a great way to go. It keeps the software vendor on the same page as you – they want to keep you as a client for the long term. Theoretically, your interests are aligned.
If you already have an older computer system, then migration to the new system is often something a mature software company has already handled effectively.
Most importantly, take your time and look at a few products. None may be perfect, but likely, all will be very close to your exact business model from day one.
Apps – Some generic software companies promote the addition of apps to their main product. Clover, in particular, has made an industry out of it – and scores of apps have been written and launched by third-party companies for Clover. These apps can go a long way to meet specific business needs of growing businesses. While it is not the same as a package written from the ground up for a niche, if you are choosing a basic generic retail package and only need a few modifications, this may be a useful approach.
For most companies, choosing the right vertical market software for your business is much like choosing the right car or the right home: it has to be something reliable that fits your specific needs, desires, and budget. Review all the ways you are currently implementing software and what’s working for you and what isn’t. Take a hard look at what you are doing by hand or by a variety of different programs and make notes. Issues you have with the current system are likely to become streamlined or nonexistent once deploying vertical software.