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It is often said that one never forgets the first time: situations of such fear and anticipation tend to leave indelible marks. Hiring a first employee is like that, because it represents a significant change in the life of a business. It also represents the first of many hurdles facing VARs and Sis along the road to maturity. Despite their misgivings, small VARs usually give in to the urge to develop growth strategies -- regardless of the consequence -- because it seems like the natural thing to do. They make valiant efforts but, through either inexperience or a lack of focus, only a select few perform well while maintaining consistent growth year over year. It doesn't have to be that way. Proven techniques -- unbeknown to many small companies -- have been used for years to manage small businesses while avoiding the traps implicit in growth. Typical first-time traps include administrative headaches caused by a lack of a reporting function; dilution of a company's business by ignoring the benefits of education; and, costly hiring errors. A VAR or SI's lack of business knowledge can often be traced to company executives with formal training in computer science rather than business administration. Managing and growing a business profitably is not easy at the best of times, and VARs can only succeed by becoming adept at the business of business, rather than the business of technology. We recognize that our success lies in being able to run the business in such a way that it will no longer need us," says Tony Compagnoni, president and co-founder of Toronto-based network integrator Malibu Computer Inc. "It was shaky at first. It's not something you can learn in a couple of months' worth of business seminars." From the basics on up Compagnoni, who studied computer science at the University of Waterloo in Ontario, was a self-confessed business illiterate when he and a partner started Malibu out of an apartment eight years ago. Since then they have grown the company at a relatively slow pace -- slow because of the steep learning curve in business terms, coupled with their strong desire to establish organized, internal processes. "Over the last eight years we've gotten our systems and methodologies in place, and the core people who do the relationship part of the business. It's going to be easier to grow from this point on," Compagnoni says. A slow, controlled growth strategy is one that has been recommended for small businesses since time immemorial but is particularly helpful in the case of VARs and Sis. According to I.T. venture capitalist and "angel investor" Leon Rudanycz, such an approach keeps overhead costs in check, thereby avoiding the necessity of having to seek financing from the banks to fund the business (service-based I.T. organizations know first-hand how hard it can be raising capital through the banks.) It also allows for the development of a company's market focus, while giving its principals time to develop the prerequisite business skills. "If you have high growth, you're going to need the banks, so why not slow that growth down a bit? Get a good solid foundation, and then go to the next level," Rudanycz advises. Because of their understandable preoccupation with technology, VARs and Sis can easily forget -- or not even realize -- that one of the fundamentals of a good business strategy is to have at least some semblance of a reporting capability. Without the ability to gauge company mechanisms such as payables, receivables and inventory, and do year-over-year comparisons, it can be difficult to separate the company's profit from its revenue, meaning that any clear diagnosis of a businesses' health is impossible. "A lot of small business owners operate their businesses by the seat of their pants," Rudanycz says. "They're so worried about sales, about providing service or support, that a lot of them don't focus on the bottom line; they focus on the revenue." A common belief among VARs is that more is better -- a mindset that often results in the company going in for the "easy sale." With business in the industry as plentiful as it is, and with a distribution channel that makes product procurement as simple as falling asleep, there can be a reluctance on the part of VARs and Sis to turn down business that is not a part of their core competency, or stated market objectives. Order-taking can have a powerful allure, particularly if the request comes in volume, or from an existing customer; but it can come at the expense of business that really matters. A lot of resellers just want to make their customers happy; they'll do anything, and they forget that every sale has to make a profit," Rudanycz says.