We Can't Afford Every Client

 We Can't Afford Every Client - Lessons Learned, episode 58

 Once I started turning almost all work over to technicians, I quickly saw an “established” bad practice that needed to change. Here’s how I noticed it and  how I addressed it.

When I started my business, I made the same error that almost all new consultants make: I did not place enough value on my time. I don’t mean the amount of money I charged so much as how I chose to use my precious hours. And perhaps back then I would not have called them precious. Now I treat them like rare gems.

I made a profit on all jobs (with rare exceptions), but some jobs should not have been done. Specifically, there were jobs that seemed profitable because my time didn’t “cost” me anything. Even then, I knew that I probably wouldn’t be able to do these jobs if I had to pay a technician.

A great example is (unfortunately for me) one of my favorite clients. They ran a feed store a few  towns away, up the foothills toward Tahoe. At first they were undeniably profitable. They had a big problem that was driving them crazy. That got my foot in the door. While there, my network assessment exposed a server that was choking and a backup that hadn’t worked in more than two years. On top of that, their point of sale systems were in the feed barn. In other words, a barn with cash registers. This is just about the dustiest environment you could imagine.

All of which is to say, we started doing regularly monthly maintenance. At first, we a lot of fix-up and clean-up work. Then it settled down to about 30 minutes per month to check server, network, and basic stuff, and 30 minutes to clean up the POS machines. [Literally. We opened them up and vacuumed them out because there was so much dust.] Total onsite = one hour.

Again, when I was doing this, I’d head out late morning so I could take care of the client and then eat lunch in this cute little town in the foothills. It took about 45 minutes to drive each way.

Then I started sending technicians. I don’t remember the exact fully burdened rate, but let’s call it $60/hour. Drive time is 1.5 hours and service labor is 1.0 hours. That’s 2.5 x $60 = $150. We didn’t charge for drive time (one of the few things I would change if I went back to the beginning.)

We charged the client for on hour onsite at $150/hr. Zero profit. But if that tech was driving around Sacramento, we might have had 30 minutes drive time in those 2.5 hours and billed two hours of labor, putting us ahead by $150.

We got into this situation because I used to make the mistake of believing that my time cost nothing. There’s the cost out of pocket and the cost of NOT doing another job that pays better.

Serving Out-of-Towners

That client was an outlier (literally) on the mountain side of the valley. In the other direction is the Bay Area. We had clients down in the Delta (where the Sacramento empties into the Delta on the way to the Pacific). We also had clients closer to Oakland. The Delta was closer but on tiny winding roads. The Bay Area clients were about eighty miles, which might take 90 minutes or might take four hours to drive.

Eventually, we drew a line to represent about 30 minutes drive time. We did not charge for travel inside that area. For outlying areas, we set a four hour minimum. That way we were pretty much guaranteed to be profitable.

We gently passed off the feed store to another consultant in our SMB IT user group. The Bay Area folks didn’t bat an eye. At the time, this was a $600 minimum, so I was surprised. But we didn’t hear a peep or complaint out of them. To be honest, I was quite shocked.

From time to time we culled clients because they were too small and didn’t meet our minimums. And once we set the four hour minimum for out of towners, we never had a client who was unprofitable again. Really.

Lesson Learned: The owner’s time is valuable. Especially if the owner’s primary responsibilities are sales and client relationships, that’s the most valuable time in your company. When calculating jobs, assume you’re a well-paid technician and make sure the job still looks profitable. You can’t give away your time.

 Feedback always welcome.

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 Episode 58

This Episode is part of the ongoing Lessons Learned series. For all the information, and an index of Lessons Learned episodes, go to the Lessons Learned Page. 

Leave comments and questions below. And join me next week, right here.

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The ASCII Group Appoints Ted Roller as Chief Community Officer

 Washington, D.C. – January 14, 2026 – The ASCII Group, North America’s original and vendor-neutral community for Managed Service Providers (MSPs), is pleased to announce the appointment of Ted Roller as Chief Community Officer, a newly created executive role focused on strengthening member engagement and expanding ASCII’s community across the United States and Canada.

In this role, Roller will lead initiatives designed to deepen member connection and engagement, working closely with MSPs to help shape the future of the ASCII community. His focus will be on ensuring ASCII continues to reflect the real-world needs of MSP business owners and remains a trusted resource for peer insight and collaboration.

Roller brings more than 25 years of experience in the IT channel, with a career spanning MSP ownership and senior channel leadership roles. Earlier in his career, he owned and operated an MSP that was recognized locally as one of the Fast 50 fastest-growing companies, providing firsthand experience with the operational and strategic realities MSPs face.

He has since held senior channel leadership positions at LogMeIn, Intronis, Mailprotector, CloudRadial, Zomentum, and FlexPoint, where he helped build partner programs, strengthen community engagement, and support growth through indirect sales models. In addition, Roller has contributed to industry education as faculty for CompTIA and has been recognized by organizations including MSPmentor, The Channel Company, and SMB Nation.

“Ted’s background as both an MSP owner and a channel executive makes him uniquely qualified to lead our community efforts,” said Jerry Koutavas, CEO of The ASCII Group. “His role will be instrumental in strengthening member engagement and expanding ASCII’s reach as we continue to support MSPs across North America.”

“ASCII has always represented something different in this industry,” said Roller. “It is a community built on trust, openness, and shared experience. I’m honored to join the team and look forward to helping shape the next chapter of member engagement and community leadership.”

About The ASCII Group, Inc.

The ASCII Group is the premier community of North American MSPs, MSSPs and Solution Providers. The Group has members located throughout the U.S. and Canada, and membership encompasses everyone from credentialed MSPs serving the SMB community to multi-location solution providers with a national and international reach. Founded in 1984, ASCII provides services to members including leveraged purchasing programs, education and training, marketing assistance, extensive peer interaction and more. ASCII works with a vibrant ecosystem of leading and major technology vendors that complement the ASCII community and support the mission of helping MSPs to grow their businesses. For more information, please visit www.ascii.com.

Pia Unifies Community and Strategic Alliances Under New Chief Community Officer Role to Accelerate Ecosystem-Led Growth

 TAMPA, Fla. — January 13, 2026 — Pia, the leading AI-led help desk automation platform for managed service providers (MSPs), today announced that longtime executive James Allen has been appointed to the newly created role of chief community officer, unifying community strategy and strategic alliances as the company scales its partner ecosystem. He reports directly to David Schwartz, CEO of Pia.

The chief community officer position represents a fundamental shift in how Pia is approaching growth. Allen will orchestrate community and partnerships as interconnected drivers of the company's expansion. He'll build scalable programs such as advisory boards, user groups, and certifications while managing technology partnerships, distributor relationships, and co-selling initiatives with vendors.

“The creation of this role signals our belief that community and partnerships aren't just support functions; they're core growth drivers,” Schwartz said. "James understands that in the MSP market,success comes from building an ecosystem where partners co-innovate, customers connect, and strategic vendors integrate into our value proposition. By unifying these efforts under one leader, we're building a scalable growth engine that contributes directly to pipeline, revenue, and brand equity."

Allen will ensure the “voice of the community” shapes product, marketing, sales, and customer success teams — keeping Pia's innovation roadmap aligned with MSP needs.  

"I'm excited to take on this role and strengthen Pia's focus on community-led growth," Allen said. "Our community is how we stay close to what MSPs need and how we build the right AI-driven solutions to help them serve their customers. Bringing community development and our alliances together will make it easier for our partners to stay connected to their customers and get the support they need to grow."

Allen brings 15 years of executive experience across finance and MSP ecosystems. Since joining Pia in 2022, he's served as executive vice president of strategic partnerships and senior vice president of sales, cultivating relationships with CEOs, CFOs, and senior MSP leaders while building connections with technology partners, distributors, and vendors. His career has focused on helping MSPs enhance efficiency, improve profitability, and deliver exceptional customer experiences.

About Pia

Pia specializes in transforming the help desk experience for managed services providers (MSPs) with its AI-powered automation platform, Pia aiDesk. The platform leverages advanced technologies such as artificial intelligence, machine learning, and natural language processing to automate and streamline the most common help desk tickets, significantly increasing efficiency and reducing costs. To learn more about how MSPs can experience the future of help desk management with Pia aiDesk – where AI meets operational excellence, delivering consistency, scalability, and customer satisfaction across every interaction – visit https://pia.ai/.

The AI Gold Rush Will End Like Airlines: Great for Users, Terrible for Operators

I've been thinking a lot about airlines lately. Not because I'm traveling more, but because every time I use ChatGPT or Claude or any of the AI tools I've woven into my daily workflow, I see the same pattern emerging that turned aviation from a glamorous frontier into a brutally commoditized business.

And if I'm right, we're about to watch the AI industry follow the exact same trajectory.

The Uncomfortable Truth About Infrastructure

Here's what I keep coming back to: the best infrastructure businesses are terrible businesses to be in.

Airlines are the perfect example. They require massive capital expenditures. They operate on razor-thin margins. They're completely commoditized—most travelers pick based on price and schedule, not brand loyalty. Running an airline, frankly, sucks.

But the unlock airlines provide? That's massive. Global business travel. Tourism economies. Supply chains. Family connections. The entire modern world depends on cheap, reliable air travel existing.

The same pattern played out with shipping containers. Before containerization, global shipping was boutique, expensive, and labor-intensive. Then we standardized it all. Now it's a low-margin, commoditized business that most people never think about.

But that commoditization unlocked something extraordinary: modern global trade. Your ability to order something manufactured in Shenzhen and have it on your doorstep in Ohio a week later depends entirely on shipping being cheap and boring.

I think AI is heading down this exact path.

Why AI Will Become Boring Infrastructure

Look at what's already happening:

The models are converging fast. Six months ago, there were meaningful differences between GPT-4, Claude, and Gemini. Now? They're all basically the same for most use cases. The gap is closing weekly.

Open source is catching up. We're one or two breakthroughs away from having open-source models that match the commercial offerings for 90% of use cases. When that happens, the pricing pressure becomes brutal.

The capital requirements are insane. These companies are burning billions on compute, data centers, and talent. The circular spending between big tech companies—where Microsoft invests in OpenAI, which then spends that money on Azure compute—can't last forever.

It's starting to feel like the dot-com bubble. I lived through that one. I've got enough gray hairs to recognize the pattern. Massive investment. Sky-high valuations. Everyone convinced they're going to be the winner. Then reality hits.

And here's the kicker: AI spending is currently propping up the US economy. When this bubble deflates—and I think it will, probably not as catastrophically as dot-com but it will deflate—it's going to be painful.

The Good News (For Everyone Except AI Companies)

But here's what makes this bearable: the infrastructure will still be there.

After the dot-com crash, we didn't lose the internet. We lost a bunch of overvalued companies, sure. But the fiber optic cables stayed in the ground. The protocols kept working. The infrastructure remained, and ten years later we built entirely new businesses on top of it.

The same thing will happen with AI. The models will become commoditized utilities. Running an AI company will be a low-margin infrastructure play. But the unlock for the rest of us will be extraordinary.

I'm already seeing it in my own work. I use AI extensively—Notion AI for research and organization, ChatGPT for drafting and ideation, various other tools for production workflow. It's genuinely the most interesting technology I've played with in years.

My goal is that people see it in the velocity of my output, not in the writing itself. It's just me, but more. And that multiplier effect is real.

What This Means for MSPs and IT Services

Here's where it gets relevant for the channel:

In the short term, there's going to be turbulence. When AI valuations correct, it will ripple through the economy. Small businesses will feel it. IT services spending will take a hit. The timeline is unclear—things move faster now than in 2001, but "faster" doesn't mean "four months."

In the medium term, AI becomes a capability, not a product. You won't sell AI services. You'll use AI to deliver everything else more efficiently. Just like you don't sell "internet" today—you assume it exists and build services on top of it.

In the long term, the intelligence unlock is transformative. The ability to automate cognitive tasks that used to require human judgment? That's massive. But it also means the commodity technical work that many MSPs still rely on becomes even less defensible.

This is why I keep hammering on the same theme: MSPs need to move up the value chain now. When AI makes password resets and basic troubleshooting trivially easy, you need to already be positioned as a strategic advisor, not a help desk.

The technology is enabling that transition. But there's a window, and it's closing.

The Airline Lesson

So yes, I'm bullish on AI. I use it constantly. I think it will unlock enormous value across the economy.

But I don't want to run an AI company any more than I want to run an airline.

The best infrastructure is the kind you never think about. It just works, it's cheap, and it enables you to do more interesting things.

AI is going to become that. It's going to be great.

Just don't be surprised when the companies building it discover they've created a commodity business with airline economics.

What do you think? Are we heading for an AI winter, or is this time different? I'm curious where you see this playing out in your business.

Combining Everyone's Best Habits

 Combining Everyone's Best Habits - Lessons Learned

I often tell the story of how one of our technicians, Dan, changed the way we entered tickets forever. One day, I sent him off with the book Getting Things Done by David Allen. Monday, he came into the office with a suggestion:

Whenever we work on a ticket but do not finish the job and close the ticket, we should take a minute and note where we are in the process. For example, if you’ve wired up two access points and they’re working, but you have one more to go, just drop a note in the ticket.

And the note always begins: WITNS (pronounced “witness”). It stands for “What is the next step?”

This little habit is very handy for lots of jobs that are half-done when the day comes to an end, or a technician has to leave a job to take care of an emergency. It can also be used as a self-reminder when a tech takes a lunch break.

We adopted this habit from then on. It saved us hundreds, and maybe thousands of hours of rework over the next ten years. Simple. Powerful. Easy to understand. What more can you ask for?

The reason I tell that story is that we adopted a lot of habits and procedures from many employees over the years. How we handle money. How we label drives. How we enter notes. The ordering process. Server setups. And on and on.

Everyone with some experience knows some good tips. They don’t have to be profound or amazing. If you improve your business constantly with hundreds of tiny improvements per year, it will make a dramatic difference.

A few habits that really stand out are:

Cutting cables in half. Technicians (and clients) hate to throw things away, even if they’re broken. So, troublesome cables are taken out of service and put in some box somewhere. And one day, the customer or a technician will find that cable and plug it in. Then we have to chase the same ghost we already caught.

So we just cut the cable in half. Right in the middle. No client can use it. And a technician who wants to put new ends on it should test the “new” cable out of habit. But WE never reused those cables. The reason is simple: we rarely sold a cable that was more expensive than an hour of a technicians time!

Velcro. This one made it into the Managed Services Operation Manual. Put the soft side of the Velcro on the bottom of a device. Every time. The scratchy side can go on the shelf or the wall. If that device is set down on something that shouldn’t scratched, you’re in good shape. And if this is the habit on every use of Velcro, any device you pick up can be put down on the other half of the Velcro and no one has to think about it.

Tape courtesy fold. This is the habit of folding over the end of a tape on a roll so that you never have to “find” the end, and you never have to spend time scratching it to get it started again. I never had a name for this, but my daughter calls it a courtesy fold. When anyone else picks up that roll, they won’t have to wrestle the end either. She has passed that on to others in various jobs. Again, this sounds really small until you consider how many times per year you pick up a roll of tape!

Labeling drives. This is huge. We label drives and drive bays so any tech can walk in and do whatever they need to on a NAS or a server and they’ll know where those drives go back. Of course this is helpful with RAID arrays, but it’s also a good troubleshooting habit. If you’re going to move things around and need to put them back, it’s a no-brainer if everything’s labeled. And when you order a replacement drive for one that’s giving you trouble, you can send out any technician because no one has to remember which drive it was and where it went. A simple note in the ticket takes care of that.

And on and on. I hope you’ve got dozens, or maybe hundreds of these little habits.

The “process” for adopting these habits is very simple for anyone who doesn’t practice a top-down command-and-control management style. Just listen. Be open to letting the newest employee make suggestions. Good ideas can come from anywhere.

Employees need to be encouraged to offer suggestions. And they need to know that they won’t be ridiculed if some just won’t work or have already been tried and rejected. Inform them without making them feel foolish. Let them continue to bring suggestions.

Let your employees improve your business. That’s a good habit!

 

Feedback always welcome.

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Episode 57

This Episode is part of the ongoing Lessons Learned series. For all the information, and an index of Lessons Learned episodes, go to the Lessons Learned Page. 

Leave comments and questions below. And join me next week, right here.

Subscribe to the blog so you don't miss a thing.

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 Don't Miss my 17th Annual 

State of the Nation Address for SMB IT

Wednesday, January 14, 2026

www.mspwebinar.com

:-)

The Adventure Begins - Small Biz Thoughts Powered by Business of Tech

 About the adventure: Small Biz Thoughts Powered by Business of Tech

I’ve known Dave Sobel so long, I can’t remember when I met him. We have shared adventures and pushed the evolution of the IT community for more than two decades across the United states and on three continents. In addition to sharing the stage before “managed services” was called managed services, we have shared a passion for helping IT consultants all over the globe to be as successful as they can be.

Of course, we each went our own way, leaning on our strengths and helping the broader community in different ways. I started the Small Biz Thoughts Technology Community and IT Service Provider University. Dave founded MSP Radio and The Business of Tech Podcast – the only MSP-focused podcast that brings news and analysis to our industry every day.

And of course, Dave, Ryan Morris, and I got together poolside in Las Vegas one day and came up with The Killin’ IT podcast.

The next level of our collaboration begins now. Dave has acquired the SBT Technology Community and ITSPU. And they really will be powered by the addition of news and analysis from a truly vendor-neutral and data driven perspective.

When Dave first approached me about this, his vision was that these resources would be “better together” – and I agreed.

Don’t Worry! I’m not going anywhere. I know that many people will assume that’s what’s going on. My Great Little Book Publishing Company will continue to operate, as will my executive coaching and Relax Focus Succeed. As someone told me recently, “Well that ought to be enough to keep you busy.”

So don’t worry: I will be around. You’ll see me in the Small Biz Thoughts Community and other activities. I’ll be blogging and speaking, and so forth.

Everyone always asks the “why” question when changes like this happen. Dave and I are both committed to transparency and honesty, and that works well here. Two things have been going on in my head for the last couple of years.

First, I created a job that I love. As many of you know, I set a goal for myself in 2011 to “write more, speak more, and travel more.” And I rebuilt my life and my business to fulfill those goals. I worked to make the philosophy of Relax Focus Succeed a reality for me.

But over time, as with all successful adventures, it got bigger and more complicated. I found myself doing more “administration” and less writing, speaking, and traveling.

Second, I want to put energy into some new adventures, but I don’t want my “body of work” to fade away. I am humbled by the fact that Managed Services in a Month played, and plays, such a visible role in the success of so many managed service providers. And all the other stuff I’ve done (25+ books, 40+ training courses, hundreds of SOPs, and countless supporting materials) have become a separate entity that I think needs to be preserved.

I know it sounds arrogant, but I don’t think this work should simply cease to exist when I wander off to build more things. So I went looking for someone who saw both the value and the potential for the things we’ve built at Small Biz Thoughts.

Some people might not see any value in these properties, primarily because they can’t figure out how to make a profit with them. But Dave was eager to start integrating and building new things with the combined resources of his growing media company plus the community and training services of SBT. You haven’t seen the behind-the-scenes activity, of course, so let me assure you that Dave is very excited about the possibilities for these combined resources.

Ultimately, I want to write more!

I have several books in my head that really want to get out. I’ll be releasing a new version of Relax Focus Succeed in Q1 2026, and I’m working on books about customer service, how to be a great service manager, and others. If I’m lucky, I’ve got about thirty more years of writing to do. So I want to get started right away.

Please follow me at Relax Focus Succeed and sign up for my monthly RFS newsletter at https://relaxfocussucceed.com/newsletter.

Now here's your three-part checklist to kick off 2026: 

1. For more information, an open forum discussion, and answering all your questions, please

Join Dave and me live on the Wednesday Business of Tech Podcast

Wednesday, January 7^th

Subscribe to the MSP Radio YouTube channel: https://www.youtube.com/mspradio

And add the Live broadcast to your calendar: https://www.youtube.com/watch?v=_3NMBbkfioE

 

2. Small Biz Thoughts Technology Community members – Don’t forget to join us on January 8^th for the January monthly meeting. We normally have this on the first Thursday, but that’s New Years. So we moved it to January 8^th.  All community members are welcome.

Dave and Karl will both be there to discuss and answer any questions you have.

No registration required. Just log in to the community and view the events calendar for the link:

https://www.smallbizthoughts.org/events/

 

3. Everyone should register for my 17^th Annual State of the Nation Address for SMB IT.

January 14^th

9:00 AM Pacific / Noon Eastern

Register now: https://us02web.zoom.us/webinar/register/WN_6Dsyq3wwSJ-kFqbiWX6h4A

 

As always: I am committed to making you as successful as possible. So if you need anything, please reach out to me at karl@karlpalachuk.com.

Happy New Year.

: - )

 

MSP Radio Acquires Small Biz Thoughts and IT Service Provider University

So this happened . . .

This is the official press release. Stay tuned for an additional blog post.

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MSP Radio Acquires Small Biz Thoughts and IT Service Provider University — A Values-Driven Deal Focused on Independence, Education, and Community

Fairfax, VA — January 1, 2026 — MSP Radio, led by technology analyst and industry educator Dave Sobel, today announced the acquisition of Small Biz Thoughts and IT Service Provider University (ITSPU) from founder Karl W. Palachuk.

The acquisition unites two of the most trusted names in the managed services profession — combining MSP Radio’s media infrastructure and business operations with Small Biz Thoughts’ deep practitioner education and community leadership. The transaction was facilitated by James Kernan of Kernan Consulting, a respected advisor known for guiding successful MSP transitions.

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A Natural Transition Between Two Industry Builders

For Karl Palachuk, 66, this transition represents a thoughtful move from day-to-day operations to focus on writing, mentoring, and content creation.

For Dave Sobel, 50, it continues his long-standing mission to educate and empower MSPs — not by creating another community, but by adding meaningful value to the ones that already exist.

“From day one, I’ve said I didn’t want to build another community — the industry already has great ones,” said Sobel. “What I wanted was to support those communities by delivering deeper insight, better education, and more practical tools. This acquisition lets us do exactly that — to expand on what Karl has built without changing its spirit.”

“At this point in my career, I want to spend more time creating and teaching,” added Palachuk. “Dave shares my commitment to independence and education, and he understands that Small Biz Thoughts is about service, not scale. I couldn’t imagine a better person to carry this work forward.”

________________________________________

Traditional Financing, Independent Future

In an era of private-equity and investor-backed consolidation, this deal stands apart as a traditional small-business acquisition — financed through a local bank relationship Sobel has maintained since his own MSP ownership days.

That community-based financing reflects the same principles both leaders have long advocated: trust, relationships, and small-business independence.

“This is the kind of deal we talk about when we teach MSPs how to build sustainable businesses,” Sobel said. “A straightforward, relationship-driven loan with a local banker who’s known me for years — that’s what small business is all about. It keeps control where it belongs: with the people doing the work.”

This structure ensures that MSP Radio — and its family of media and education properties — remains fully independent, with no external ownership or editorial influence.

________________________________________

Transparency as a Teaching Moment

Both Sobel and Palachuk are intentionally sharing more about the acquisition than most private deals, using it as a teachable moment for MSPs and small-business owners exploring their own succession or growth paths.

“We’re educators by nature,” Sobel said. “If our openness helps another MSP see how values, structure, and relationships can align in a deal like this, then we’ve turned our own transition into a lesson for the community.”

________________________________________

What’s Next

The combined organization will operate under the Business of Tech umbrella, positioning it as the flagship platform for analysis, education, and connection across the MSP ecosystem.

Under the new structure:

• Small Biz Thoughts continues as a heritage community brand powered by Business of Tech.

• IT Service Provider University becomes ITSPU — Powered by Business of Tech, continuing as the training and certification platform for MSPs.

• Business of Tech remains the central daily channel for MSP news, analysis, and commentary.

• Karl Palachuk will serve as Strategic Advisor and Instructor during a two-year transition period, ensuring continuity and community engagement.

The transaction closed in 2026 following full due diligence and financing, with no outside investors or liabilities assumed.

________________________________________

Combined Reach and Impact

Together, Business of Tech and Small Biz Thoughts form one of the largest independent education and media platforms serving managed service providers worldwide:

• 11,000+ newsletter subscribers across both organizations

• 22,000+ YouTube subscribers with more than 1 million lifetime views

• 15,000+ LinkedIn followers between Karl Palachuk and Business of Tech audiences

• 6,000+ unique podcast listeners across Business of Tech and SMB Community Podcast

• Over 4.5 million blog pageviews across both sites

• A video library of more than 1,400 MSP-focused training and insight videos

That collective footprint reaches tens of thousands of MSP professionals globally, connecting independent media, education, and thought leadership under a single, trusted umbrella.

________________________________________

About MSP Radio

MSP Radio is an independent media and education company serving the global managed service provider (MSP) community. It operates Business of Tech as its flagship brand, delivering daily analysis, data, and practical guidance to help MSPs build stronger, more resilient businesses.

Learn more at www.businessof.tech

About Business of Tech

Business of Tech connects the global MSP community through independent news, analysis, and education. Its platforms include the Business of Tech podcast and YouTube channel, Small Biz Thoughts, and IT Service Provider University, offering training, certification, and community programs for IT services professionals.

Learn more at www.businessof.tech

About Small Biz Thoughts

Small Biz Thoughts was founded in 2006 by author and industry leader Karl W. Palachuk, and IT Service Provider University was established in 2013.   Together, they have educated thousands of MSPs worldwide through books, courses, and a long-standing community. For more than two decades, the brand has stood for ethical leadership, business excellence, and real-world training for IT service providers.

Learn more at www.smallbizthoughts.org

________________________________________

Media Contact:

Dave Sobel

Founder & CEO, MSP Radio / Business of Tech

dave@mspradio.com

:-)

Make 2026 the Year Your Business Gives You the Life You Deserve

If you're not signed up for the monthly Relax Focus Succeed newsletter, please do so right now:

relaxfocussucceed.com/newsletter

Your Business Exists for One Reason: To Help You Fulfill Your Dreams and Desires, and to Build the Life You Deserve

How can I made such a brash statement? Because you're running a small business (by which I mean there are only a few stakeholders and you don't tell shares on the open market). If you work at a big company with shareholders, your job exists to make money for the company, directly or indirectly. Ultimately, it is to provide profit and increased value for the shareholders.

But as a small business owner, you're the stockholder. And, yes, you want to earn money. But you can earn money doing anything, especially in tech. You don't have to deal with clients, employees, vendors, payroll, and all the other chores that come with business ownership.

So, yeah, make money. But that's not why you're self-employed. It's not why your business exists.

Sadly most people cannot tell you what their dreams and desires are. And even those who can are often at a loss to tell you how their business advances that dream.

Way back in 2011, I committed to rebuilding my life and my business so they support each other to help me do three things: write more, speak more, and travel more. And I think those who know me would agree that I did just that. 

I'm not saying it was easy - or that retooling your business to support your dreams will be easy, but it's sure worth a try! Here's something I'd like you to try in 2026: Sit down for fifteen minutes once a month and write down why your business exists and how it helps you fulfill your personal goals.

You can't say you don't have time! I'm talking about fifteen minutes per month. Make it a priority and do it. 

It's actually a trick question. In order to answer that question, you need to know what you want in your personal life. YOU. Not what society says you should want. Not what your parents or your spouse or your friends want. When you dig deep and finally figure out the goals for your life, then you can start figuring out how that can drive the mission of your business.

If you really do this, you'll find that the answer is different every month. It will take some time to dig down deep enough to find out your ultimate goals. But once you do, a whole lot of other things will begin to fall into place. 

You also need to be prepared for two things. First, you might not finish this task in twelve months. More quiet time always helps. And it's okay if you don't have "the" answer twelve months from now. You literally have the rest of your life.

Second, you might come to some startling conclusions. You might decide that some big things in your life don't really fit with the future you want to build. The same is true for operations inside your business. When you view the world from the lens of, "How does this help me fulfill my goals?" you have to be prepared to conclude that it doesn't.

For some things, you will be quite resistant to give up because they're part of who you are. Or who you were. But if they don't move you closer to personal happiness and fulfillment, then it might really be time to change your habits. 

You've probably heard the saying, the best time to fire someone is the first time the thought crosses your mind. The say is true with habits that don't contribute to your personal goals, dreams, and desires.

The best time to drop a bad habit is the first time the thought crosses your mind.

Again, this is not easy. Giving up pieces of how you see yourself - and have seen yourself for decades - is hard work. But it is absolutely worth it.

If you haven't subscribed to my monthly RFS Newsletter, please do. And if you want some guidance on how to accomplish this transformation step by step, I recommend you add Relax Focus Succeed to your reading (or listening) list today.

Have a wonderful 2026. And if you think you could use some help retooling your business to support the life you want to live, email me at karl@karlpalachuk.com.

Best of luck and Happy New Year!

:-) 

Good Owners are Not Necessarily Good Managers (or Employees)

Good Owners are Not Necessarily Good Managers (or Employees)

- Lessons Learned Episode 56

Over the years, I’ve witnessed or been involved in several incidents in which one company bought another and the seller became an employee (usually a manger of some kind) within the purchasing company. One of the most important lessons I’ve learned from this is that someone can be good at owning, managing, and growing a company and not good at managing inside someone else's business. In fact, this is pretty common.

From time to time, you hear people say, “I don’t think I’d be a good employee.” I’ve said it. You may have as well. What we mean is generally that we’re used to being the ultimate decision maker and policy maker. So working on someone else’s goals and following their wishes is something we’re not used to.

In my case, I left my last real job in October of 1995 – just over thirty years ago. And maybe it’s arrogance, but I think I know how to run a business. I barely remember what it’s like to take instructions from someone else. I think that’s pretty common to people who move from owner to employee.

Here are a few more things I’ve learned from experience.

First, somehow, I believe that people who run businesses must be good at certain key activities, such as providing excellent service, managing employees, and making sure all the details are taken care of (even if that just means delegating to the right person).

Unfortunately, I’ve discovered that someone can make good money and grow a business without doing any of those things well. Many people just muddle along, somehow making it work. I think of this as a tradesman’s approach to business. By that I mean that they really love the details of actually doing the work, but they don't enjoy all the details that make a business objectively successful in others' eyes.

Second, it took me a long time (more than ten years) to separate my internal stereotypes of owners and managers. I used to think that managers were on their way up to being owners and owners were focused on all the details that would actually make a good manager. In other words. the Venn diagram had a great deal of overlap.

Over time, I began to draw some very big distinctions. Ultimately, even the greatest, most loyal manager must put the business second. They have to take care of their income, their family, and their careers. And when push comes to shove, they can leave to take another job.

Of course the owner also has to take care of their income, their family, and their career. But the owner does this through the business. In small business, the business exists to fulfill the dreams, desires, and needs of the owner. And “leaving” the business is never a straight forward thing.

All of that simply comes down to: There are certain attitudes and behaviors that will always separate the owner from the manager. Ultimately, the owner has more at stake inside the business.

And that leads us to the third point: Many owners got there without paying attention to all the details. They were never good with the books, with managing people, with being organized, or even with good service. They got by focusing on the job to be done until they grew to the point where they could have over the “details” to someone else.

In other words, they never developed the skills and behaviors you’d expect from a good manager because they didn’t need to. So when they move from owner to employee, they don’t have those skillsets to bring to the new company.

I’ve seen former-owners who had absolutely no attention to detail, no organizational skills, and no good daily habits that would make them a good manager. The result, of course, is that they are not good employees and the new owner is very frustrated with trying to manage someone who just ought to be able to manage themselves.

Oddly enough, the fix is surprisingly easy and almost never undertaken. The former-owner-now-employee needs a thorough onboarding process just the same as any employee. They need to be educated on the vision and culture of the new company. They need to know all the details of “how we do things around” here. And they need to go through a bit of the awkwardness of being the newest hire.

The one thing a former owner should understand very easily is the branding piece. That’s the “how we do things around” bit. After all, they had their way of doing business, and may even have been an attractive purchase based on their processes and procedures. So even though the new company will be different, they bring a certain understanding of why newbie employees just need to “do it our way.”

Action step: If you’re acquiring a former owner as a new employee, you need to plan for it with a serious onboarding process and some training in the skills of a manager. If you have an onboarding process for other employees, start there. If not, build a plan from scratch (and use that as a place to start building onboarding processes for other employees). And then go find some good management training.

Sink or swim is not an effective onboarding process.

Feedback always welcome.

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Episode 56

This Episode is part of the ongoing Lessons Learned series. For all the information, and an index of Lessons Learned episodes, go to the Lessons Learned Page. 

Subscribe to the blog so you don't miss a thing.

 :-)

2000-2025: The Internet Era and the Dominance of Managed Services

A Look at the First Quarter of This Century in Technology Consulting

Lots of people are talking about the year in review. We’re closing in on the end of the first quarter of the century! Let’s look at that. Of course, in the world of IT consulting there are two clear tracks to look at: The evolution of technology and the evolution of Managed services.

Let’s look at the tech first.

The change has been astonishing. “Millennials” became adults around the turn of the century and now they’re in their 30s and bringing up the next generation. Here are some key changes that affected our industry (and the whole world, really).

In 2000, we had big cell phones but no smart phones. Tablets were just a thing on Star Trek: Next Generation re-runs. And, along those lines, “screens” were monstrous, heavy CRTs that were closer to a television than anything else. Today I have so many screens I don’t know if I can count them. They’re in my car, in my hand, on my picture frame, and on all those tablets and devices lying all over the place.

In 2000, Data storage consisted primarily of 3.5” floppies and CDs or DVDs. There was no “cloud” (although data centers did exist). Today SSD (solid state drives) are standard. We still have spinning discs, but they tend to be the second drive, not the primary. Cloud storage and cloud-based services did not really take off until the 2009-2011 recession when people didn’t want to invest in hardware. Now you have to defend your choice to put a server onsite.

In 2000, desktop computers were running Pentium III processors. With one core, of course, that topped out around 1100 MHz (1.1 GHz). Today you can buy an Intel Core 9 Ultra that has 8 cores at 3.7 GHZ – for about the same price.

Wi-Fi existed but was not common in 2000. Of course it’s everywhere today.

In the early 2000s, we ran Windows XP and Mac OS X, although a lot of people refused to give up their Windows 98 machines!

And while web browsing evolved in the 1990s, it didn’t take off as we know it today until after the dust settled from Internet Bubble Burst.

Quantum Computing – always twenty years from being feasible – started to become a reality in the 2010s, but for specialized purposes only. General purpose QC is . . . just around the corner I’m told.

IOT: In 2000, connecting “things” to the Internet was not a thing. Today, everything is Internet-enabled even if there’s no point to it (I’m thinking about washing machines and household refrigerators). My house is lit by lightbulbs controlled over the Internet so I can read my thermostat connected to the Internet.

AI: In some form, AI has been around since the turn of the 20^th century (and was the result of an evolutionary path that goes back to automated mechanical men in China about 1000 BC). Machine learning took off in the mid 2000’s and came into its own in the 2010s. Virtual assistants (Alexa, Siri, etc.) went from toys to a part of everyday life in the 2010s. AI finally got to the point where it could consistently beat humans at games in the 2010s.

We’re now it what will come to be known as the early years of Generative AI. OpenAI’s GPT3 was announced in 2020 and kept us entertained plagiarizing everything we could think of while stuck at home in the pandemic.

Robots did become a thing! The Roomba started driving around the living room in 2002 and is just now beginning its death throes. Today we can risk our lives by getting into an “autonomous vehicle” almost everywhere in the world. And many people forget: The largest robot you can interact with on a regular basis is an airplane. While they don’t take off on autopilot, they fly around the world on it and, if necessary, land on autopilot.

For IT consultants, this century began with big monitors, “small” floppy discs, and heavy desktop machines. We made a lot of money getting people connected to the Internet, selling businesses their first server, and figuring out how to make money after the installation project was complete.

 

And THAT’s where Managed Services entered the scene.

In 2000, big (enterprise) businesses were used to doing regular maintenance, but it was primarily done in-house. Outsourced maintenance was pricey. (Trust me. I approved the invoices.) For small businesses, there was essentially no maintenance for most companies.

At the time, the small business world was dominated by projects. And, most commonly, projects consisted of installing some really cool system, cashing the check, and walking away. If something broke, and the IT consultant wasn’t in the middle of another project, they fixed it. Looking back, we call this break/fix. At the time it was just computer consulting.

But many companies, including mine, started doing regular monthly maintenance for clients in the 1990’s. So in the 2000s, it was very natural to think about how we could turn that into a flat-fee service and then a recurring revenue model. “Managed Services” evolved as the natural next step. There was a kind of simultaneous invention of the managed service business model.

By the end of the 2010s, Managed Services had become the nearly universal model for service delivery. Even people who claim to only provide service “on demand” tend to sell subscription licenses for RMM, office software, cloud services, backup, and so forth. They provide regular monthly services, billed on a flat fee basis, which includes some level of support. They just don’t call it Managed Service.

Now, in the middle of the 2020’s, as we finish the first quarter of this century, we can see the dawning of the next age. AI is already being used for simple IT “fix-it” jobs. By 2030, an entire layer of client support will simply disappear as it becomes easier and easier to simply ask AI how – followed by asking an agent to DO.

Please don’t spend one second worrying about your future. You won’t lose work unless you insist on doing a job that no longer exists. If you built an entire business on getting people connected to the internet, you would have been out of business a long time ago. The same is true if you refused to put anything in the cloud. AI will happen. It will change your clients and it will change your business. The question is not if, it’s how fast.

You can literally redefine your business right now to grab onto the opportunities brought by the emerging AI. The formula is very simple: 1) Educate yourself. Learn AI. Learn how it can be applied in your client’s businesses. 2) Educate your clients so they see a bright future, not a scary dystopia. 3) Become an AI strategist – a true provider of solutions for your clients.

The AI Solution Provider will spend time learning about the client’s business and figuring out where the problems and holes are. Then that consultant will help the client craft a solution and implement it. And, I assume, collect a monthly fee for maintaining it.

As the next quarter-century arrives, your future is as bright and positive as you are willing to work for.

You need to invest in training, educating yourself, your employees, and your clients. And you need to consciously create a business as an AI Solution Provider. As with everything that takes commitment and effort, no one else can do this for you. Because . . .

Nothing Happens by Itself!

How bright will you make your future?