3 Lessons I Learned From A Harbortouch VAR

By The Business Solutions Network

I recently had a conversation with a veteran retail and restaurant IT reseller who sells Harbortouch along with other traditional POS products. I say traditional only in the sense that Harbortouch’s business model, if you aren’t aware, is a hardware- and software-as-a-service model. That is, merchants sign a 3-year agreement and pay monthly for their POS system rather than a lump sum. If something breaks, Harbortouch sends a new unit. The customer gets a working POS system for three years and the VAR who sells it gets a lump sum upon installation and then a percentage of the monthly payment processing and a percentage of Harbortouch add-ons he's sold.

This VAR used to be a salesperson for one of the largest VARs in the United States. He would often have million dollar years as far as sales were concerned. His pay was good, but he wanted more. He left to start his own business, which centers on the Harbortouch model.

Let me pause here and say that this isn’t intended to be a plug for Harbortouch. This is a wake-up call to other VARs and vendors.

In less than two years, this one-man operation has built a book of business yielding $4,000 a month in recurring revenue from Harbortouch. His portfolio, if he wanted to cash out today and sell the clients to Harbortouch, would be worth more than $100,000. Granted, $100,000 isn’t enough to retire off of and you might scoff at a monthly $4,000 paycheck. But remember, this is in addition to the other traditional business he’s bringing in. $4,000 isn't his paycheck, it's on top of his paycheck. And, it’s guaranteed. This VAR isn’t starting from zero every month or every year, and the number keeps growing. Additionally, if he wanted to take a month off, he’s still collecting a check.

Lesson #1: Recurring revenue adds predictability. If you’ve got months where sales are low, wouldn’t it be nice to know that, no matter what, you’ve got guaranteed money rolling in? If you want to hire another salesperson or do some marketing, but aren’t sure about the financial investment, wouldn’t it be nice to know that you’ve got guaranteed money that can be leveraged for those purposes?

Lesson #2: Recurring revenue increases business valuation. In a short time, this VAR has built a book of business that’s worth what some 30-year-old companies have under the traditional model.

Lesson #3: The POS industry — VARs, vendors, and distributors — need to take notice and respect this model. I know many vendors and distributors are bringing bundled “as-a-service” solutions to market, but I’m not seeing much marketing or hearing much about them. VARs who aren’t embracing recurring revenue streams are missing out on an opportunity to improve the financial health of their business.