Monday, July 17, 2017

What is Project Labor?

We get email. Craig asks, "What is project labor?" But then he gives an example (cleaning up a rat's next of wiring) that may not be a project at all. Here are some thoughts.

First: Please review two recent videos on dividing and bundling labor. Part One is here:

and Part Two is here:

Second, create clear definitions within your company for three different types of labor.

Maintenance Labor consists of all those things you do to maintain systems and prevent problems. You might call this preventive maintenance labor. This includes patches, fixes, updates, testing backups, installing service packs, reviewing event logs, defragging databases, etc. Anything that improves daily operations and staves off problems is considered "maintenance."

The goal of managed services is to sell all "maintenance" labor for a flat monthly. Ideally, you will include everything you can in maintenance labor so that the client is very clear when something is not maintenance. "Not maintenance" is either add/move/change or a project.

Your mileage may vary, but here's what we came up with: We estimate about 1.5 hours per month to maintain a server to our standards. And it takes about .25 hours per month to maintain a workstation. So if a client has one server and 20 desktops, we would estimate about 6.5 hours per month to maintain their systems. Assuming a reasonably trouble-free network, you might round this up to seven hours per month (84 hours/year) on average to maintain their entire environment.

Note that you CAN calculate how much labor it takes to perform maintenance labor over a year's time. Assuming you provide the same level of maintenance across all your clients, you'll find that the amount of labor needed to maintain a server or workstation is within a very predictable range.

Break/fix or miscellaneous hourly labor is labeled "Add/Move/Change" in our system. This title helps clients and employees draw a nice line between what's covered under maintenance and what is not. An addition of a user or workstation is not maintenance.* Changing out a switch for a newer switch is not maintenance.* Moving equipment around the office is not maintenance.**

For me, A/M/C or B/F labor is just normal stuff that comes up from time to time in any office. In other words, it's not a project. If Outlook opens in safe mode, fixing that is maintenance. If a machine does not have Outlook installed, then installing Outlook is an Addition and therefore billable.

We used to estimate that A/M/C labor was equal to about 25% of managed service labor. But, with newer equipment, business-class equipment, and cloud services, this number has gone way down. For the average cloud service client, A/M/C labor is between 0% and 10% of the monthly managed service labor.

Project Labor refers specifically to a job that is a little larger and takes more than one step. For example, installing a new server involves setting up the hardware, installing the O.S. and software, joining the domain, migrating data, and configuring everything so it's accessible to clients who need it. Because it's many steps, the project is large enough that it should be handled separately from basic A/M/C service tickets.

I highly encourage you to quote projects for a flat fee. This requires that you have some pretty good estimates of how long it has taken you to do these things in the past and what it will cost you to deliver this project. For the client, a flat fee guarantees a known price and gives them the comfort that there won't be cost overruns. For you, it forces you to quote the job profitably and motivates you to be as efficient as possible to maximize your profit.

When we're honest with ourselves, we have to admit that any project can experience a labor increase or decrease of ten percent just due to circumstances outside our control. With a flat fee, you can take that potential increase into account and then focus on controlling things as much as possible, almost forcing yourself to greater profitability.

If you haven't read Project Management in Small Business by Dana Goulston and myself, please check it out. If you're rigorous, you can guarantee that no project is ever unprofitable again.

So let's get back to Craig's specific question: The Rat's Nest. He says, in part:

"They have a running network but the network cables look like a rats nest and they want me to straighten it up.  The thing is the network is fine, so I see this as a project because this is a request that although it’s needed, it’s not required for them to have a running network.  I came into this situation I didn’t create it."

The good news is: 1) The client wants you to fix this, and 2) They know you didn't create it. As you said, the network is working, so this is really just ugly, sloppy work that needs to be cleaned up. I also assume the place could benefit from a few labels here and there, and maybe even a bit of color-coding if the network wiring includes Internet wiring, data wiring, and telephone wiring. But even if it's just unplugging and re-plugging everything so it looks professional, it's definitely a billable job.

The good news is: If you haven't signed a managed service deal yet, you can include the cost of this in their "setup fee" and it will appear to the client that it's just included in your service. So you might have that option.

As for whether this is Add/Move/Change or a project, I would go with a project simply because a job like this is perfect for flat-fee service. You can do it over a series of days if that makes sense (e.g., one hour per day at 5-6 PM until complete), or do it all at once during a time when they can afford downtime. Make sure you include cables if needed, and Velcro ties (not zip ties) in your price estimate.

You could decide to simply create a ticket and charge by the hour. But remember that things like this are a great way to build rapport with a new client. So even with a ticket, I'd work very hard to stay within your time estimate so the client knows they can depend on your word.

Hope that helps. If nothing else, there's plenty to think about.

- - - -

* Unless it is. Of course you can create managed service agreements that include new desktop PCs at regular intervals or hardware-as-a-service contracts that include new equipment from time to time. You can create any deal that makes sense for you.

** There really is no exception here. But since the last two had asterisks, I thought you might be expecting one here.


Friday, July 07, 2017

Join me in London, Manchester, Edinburgh, or Dublin - August 2017

My big SMB Roadshow is heading to England, Scotland, and Ireland next month. Please join me!

You can find out all the details at

This six-hour seminar is jam packed with great information about bundling, selling, implementing, and maintaining cloud services. We've hit about half the cities we're going to visit this year.

This will be my only visit to these cities this year:

- London - 15 August

- Manchester - 17 August

- Edinburgh - 22 August

- Dublin - 24 August

I put together an 8-minute video that spells out all details of what you get with this Roadshow seminar. It also explains in some detail what we're doing and how this seminar will prepare you to make a lot of money selling Cloud Services:

Check out the video -- which includes a discount code -- and plan to join me in August.

Questions welcome.


Thursday, July 06, 2017

SMB TechFest Innovates with "Power Talks"

I love it when conferences innovate to keep things fresh and invite more ideas into the conversation.

Dave over at SMB TechFest has come up with a great way to get lots of new ideas and discussions into the mix. This quarter, SMB TechFest will include a stage dedicated to ten-minute Power Talks.

I will be presenting the following topics - with handouts.

We might have some time to debate and discuss while on stage. If not, we can certainly do so at lunch and during the cocktail party.

Easy Cloud Service Documentation

As we move more services and data into the cloud, it becomes very important to keep track of all that. In this 10-minute Power Talk, author Karl Palachuk presents a simple method for documenting all your clients' cloud services.

Resolved: Break/Fix Support is Immoral

Karl Palachuk is a well-known advocate of the managed services business model. In this 10-minute Power Talk, Karl takes his belief a step further, arguing that it's wrong to offer tech support without managed services. See if you agree.

Attitudes Toward Money . . . Tips on nickels, dimes, dollars, and stray dogs

What separates those who "make money" from those who build wealth? In this 10-minute Power Talk, author Karl Palachuk argues that the different is attitude - an attitude toward money. He elaborates with entertaining and educational examples.

Join us July 20th
Register at


Wednesday, July 05, 2017

Join Harry B and Me July 18th - Q2 MSP Analyst Webinar - Free

Don’t miss SMB Nation's popular quarterly report for MSPs, consultants, resellers and IT Pros. The only thing constant is change and we’re right there with you.

This analyst briefing will look back at 2Q and make forward looking statements for 3Q.

July 18th
12:00 Noon Pacific / 3 PM Eastern
Register at:

I will join Harry Brelsford for this live one-hour webinar.

Topics include:

  • Microsoft updates: Report from Inspire (formerly WPC) 
  • Cloud Advisor to Cloud Services Provider 
  • Gap Fillers 
  • This Disappearing MDF Pot of Gold 
  • Is the MSP marketplace ripe for disruption? 
  • Shadow economy (hint – feet on the street at a UPS Store) 
  • Is the time right for an Azure vs. AWS debate? 
  • Vacation poll (what pool are you hanging out at?) 
  • Hey George – what should I do? 
  •  Harry’s Recommended Summer Reading 
  • Karl’s Success Secrets – Lessons Learned from the Road 
  • The Next Great Thing – Niche Security Opportunities including SharePoint 
  • And much more…
Mark your calendar and plan to join us live on the 18th.


Tuesday, July 04, 2017

Be My Guest at SMB TechFest July 20th

I try to hit every SMB TechFest. I generally manage to make three per year. This is always a great conference. Good content, good networking, good vendor hall.

Attend for free with this link:

Be my VIP guest and see me live at SMB TechFest.  SMB TechFest Q3 is coming up on July 20th.  See me present along with other industry experts in sessions to grow your business.  Also, engage in the IT Mixer, Expo Hall, and prizes included in this exclusive no-cost VIP pass for you. 
You can attend onsite in Anaheim, CA or online from anywhere worldwide via the live video broadcast.  In-person allows you to network better so join me live.  I have a limited number of complimentary VIP passes and they’re first come first serve. 

Limited free passes so register now

SMB TechFest Highlights Watch the 2 minute video

Accelerate at SMB TechFest
Accelerate your business and experience high-speed exotic cars
Car onsite.  Don’t miss this raffle
McLaren 570S

 Multiple Speaker Topics

·        Sandler Sales techniques
·        Panel: Profitable VOIP for Today's Business
·        Marketing Strategies That Work
·        Panel How to Thrive being a MSP
·        Security as a Service
·        Ransomware & Business Continuation
·        CompTIA Market Hot Trends & Solutions
·        More topics and sessions 

Rated a Top 50 Channel Conference

  • Expand your solutions at the Expo Hall
  • Network with 250+ partners and Technical Professionals
  • Win Prizes
  • Hosted Bar and appetizers
  • McLaren onsite.  Raffle.  130+ mph experience.
  • Mega Mixer.  Network with Industry Peers.
  • Parking Included
  • Includes breakfast, lunch and more
  • Great for Partners & IT Pros of all industry focus
  • Always a high-value packed agenda
  • Any doubts?  View our 200+ testimonials

One Day
Thursday July 20, 2017
8:00am - 6:00pm
Sessions, Expo Hall & Large Social Mixer

Onsite in Sunny California
1960 S. Anaheim Way Anaheim, CA

U.S. Wide & International
Remote Live Video Stream
All Sessions

See you at the Event!

Tuesday, June 27, 2017

Welcome to the 21st Century: You're Fired

Ten years ago I wrote a blog post entitled Selling Technology vs. Selling Business Consulting.

In that blog post I presented one of my favorite examples of surviving in a changing business environment: Fisher Body Works. Fisher built bodies for horse drawn carriages. And rather than go out of business when the world changed, they decided to retool and build bodies for automobiles. They dominated that field, building auto bodies for several brands, including both Ford and General motors. They were eventually bought by GM - but survived 75 years after their competition because they were in the transportation business and not the horse drawn carriage business.

In my SMB Roadshow presentations, I talk about how fast the world is changing. I believe very strongly that the pace of change will only increase. And, as a result, large groups of people will lose their jobs to technology. Let me be very honest: I'm okay with that.

There are already too many jobs that simply shouldn't exist except for the fact that people refuse to let them go. The number of obsolete jobs is going to skyrocket in the next five years and explode in the five years after that.

Several people in my seminars have mentioned the web site Will Robots Take My Job? You might argue about the accuracy of specific numbers or industries, but the fact that this web site exists demonstrates a real shift in economics.

The most obvious industry that will disappear is related to automated vehicles. I argue that the entire trucking industry will disappear within ten years. That's not just truck drivers who will be replaced by driver-less cars. Truck stops won't be needed when truck drivers aren't human. No need for showers, truck stop hotel rooms, restaurants, or shops that sell cups, shirts, and truck-related chachkis. Gone. An entire industry and its infrastructure gone.

According to that site, there are 1.7 million "heavy tractor trailer" truck drivers. But there are many more millions who work in related industries.

Everyone deserves a job, but no one has a right to the job they have. Everyone needs employment, but no one is guaranteed that their industry will continue to exist.

Whether we like it or not, training for the future has to be a regular, ongoing piece of what we do - from now until we die. Change won't stop. You can fight it and resist it as much as you want. But you can't stop it.

Even in the last 25 years there have been plenty of "jobs" that ceased to exist. Where did TV repair shops go? There are a few left. But there used to be thousands of them. Same with video stores. Same thing happened to elevator operators, telephone operators, and travel agents. Yes there are some left. But not many!

If you've been watching the news, you may have noticed that fighter pilots who actually climb into airplanes are being replaced by drone pilots half a world away from the target. And at the local level, big box stores and the local grocery are replacing cashiers with self-service.

People get on their high horse about this stuff and will lecture me about how horrible it is. But they shop at Home Depot and overwhelmingly don't stand in line for the one human cashier. We want convenience and value. That doesn't always mean a low price.

I buy my shoes and t-shirts online because I know exactly what I want and I don't have to stand in line, drive to the mall, or spend my time. There's no experiencial trade-off for me. I don't enjoy standing in line, driving to the mall, or spending my time buying shoes. I'd rather click a button online.

The answer to future employment cannot be to stop technology. That has never worked. John D. Rockefeller fought for years to prevent electricity from being widely available at a reasonable price. Why? He was a forward looking guy, right? Well, he had a huge stake (the largest stake) in oil and kerosene. If electricity won the day, kerosene sales would plummet. 

But electricity prevailed because it was inevitable.

The cloud is inevitable.

Robots are inevitable.

Automation is inevitable.

There was a time when intelligent people debated whether we should write down our thoughts in order to preserve them. Did the written word actually make people less wise? As Plato says, "You give your disciples not truth, but only the semblance of truth; they will be hearers of many things and will have learned nothing; they will appear to be omniscient and will generally know nothing; they will be tiresome company, having the show of wisdom without the reality."

There you have it. One of the most basic technologies - writing - opposed by Plato in 370 B.C.

People have opposed one technology after another. Rarely have they turned back the clock, or even slowed the advancement a little.

The path forward is knowledge. We all have to be life-long learners. And many of us will find that we need to create jobs that are unique to us. 

The super good news is that ALL technology will be re-created and refreshed in the next five years (and every five years after that). That's good because it means you can learn it. Someone will be the "the best" at every technology. And the never-ending parade of new technology means that anyone who chooses can learn a new thing and become one of the best within just a few years.

Interestingly enough, the biggest deterrent to massive change is corporate America. Large corporations are very comfortable being one or two generations behind. We make fun of the military for using old computers. But virtually all of the largest companies in America are using old technology because they've already invested in it.

So some jobs will be around awhile. But if you're not in one of those jobs, now is a great time to think about what you want to do in the next five years. And start training!


Monday, June 26, 2017

Rayanne Launches Newly Revised Financial Processes Course for I.T. Services

MSP and Financial Super-Star Rayanne Buchianico has revised and updated her Financial Processes course over at Great Little Seminar. Classes start tomorrow!
This five-week course is one of our most popular every year. Rayanne owns an MSP, but she is also an accountant and has a good business helping I.T. service providers get their finances straight - so they can get their business straight. 

All classes are recorded and can be downloaded in Webinar or Audio formats.


- - - 

Financial Processes for the I.T. Services Firm

- All classes start a 9:00 AM Pacific

There are few things more important than the finances of your business. But most technology consultants didn't get into business to run balance sheets or figure out cash flow.

This class provides unique content from a unique teacher! Rayanne is a managed service provider from Tampa, FL. She is also an accountant and an Intuit certified ProAdvisor. In addition to her MSP business, Rayanne helps I.T. consultants to take control of their finances and understand their own business at a deeper level.

Rayanne BuchianicoTopics for this class include:
  • Learn to read and understand your Balance Sheet and P&L Statements
  • Create a chart of accounts that makes sense for your business
  • Separating out information on the P&L for management decisions
  • Entities and tax considerations - understanding how your entity is taxed. Handout is a tax projection worksheet for 2017 taxes
  • Cash flow forecasting - Handout is a cash flow projection spreadsheet to forecast revenues and expenses
  • Understanding margins and ratios - Deep dive into the P&L and Balance Sheet to understand how the numbers work together to make decisions. Handout is a worksheet on calculating and understanding the ratios & margins.
  • Use margins to price your services for profit
  • Calculate billing and burden rates
  • Action plans for success
. . . and More!

Delivered by Raynne Buchianico, Financial Coach and QuickBooks Advisor. Rayanne has been an MSP - managed service provider - for many years and advises MSPs on how to get the most out of their QuickBooks and PSA integrations.

Includes five weeks of webinar classes with related handouts, assignments, and "office hours" with the instructor.

This course is intended for business owners and managers. It is particularly useful for the Owner or Operations Manager.
Register Now

A Few Details . . .

  • Each course will be five webinar calls (50-60 minutes each)
  • There will be handouts and "homework" assignments
  • If you wish to receive feedback on your assignments, there will be instructor office hours
  • Class calls will be recorded and made available to paid attendees only.
  • All calls start at 9:00 AM Pacific Time

Free Webinar: Branding is More Than Your Logo - It's Everything You Do!

I am doing a free webinar this Wednesday with SMB Nation.

Register here: - Free.

The basic theme is one I've been paid to present several times:

Branding is More Than Your Logo - It's Everything You Do!

This is part of the last of the MSP Tech Talk Series from SMB Nation.

Wednesday, June 28th
12:00 Noon Pacific
This is a 90 minute webinar

Register Now

Here's the bottom line on branding: Every single thing you do affects your brand. You must stop thinking about your brand as you logo, your stationary, and your business cards. Consider United Airlines:

They've had a series of negative public relations incidents over the last few months. And guess what? It hasn't changed their logo one bit! When people say things such as, "United does this" or "United does that," it reflects directly on their brand.

Consider your own brand. What does your company stand for? When people talk about your company, what do they say? What do they say you do? How do they describe your uniqueness?

Join us for an entertaining and educational 90 minute webinar - Noon Pacific on Wednesday!

Register here:


Sunday, June 25, 2017

Only 15 Cities Left on the SMB Roadshow - Join Us

Please Join Me on the 2017 SMB Roadshow!

Topic:Making Money with
Cloud Services in Small Business

This all-day seminar is 100% education. No vendors on site. No booths or up-selling. Just education on my very successful "Cloud Five Pack" and how we make 73% profit on our small clients.

Details at

Invitation Video:

The show is $999 at the door - but there's no excuse to pay that.

Remaining shows include:
- 4 in the U.K.
- 4 in Australia
- 7 in the U.S.

And if you register now, it's only $599 ! 

You will literally pay for that with the first client you sign. In fact, you'll probably pay for it with the you charge!

The is CHEAP since:
  • You probably don't have to travel far to find a city near you.
  • You only need to sell ONE client on this package to make your money back
  • This really is a business model you can execute right away.  

One guy from the "dry run" we did of this seminar was able to create an offering and sign two clients within TWO business days of the event!

Details at

Sessions Include:

Read More . . .
 - Cloud Services in Small Business
 - The Cloud Five-Pack
 - Cloud Migration
 - Implementation
 - and MORE!

Seminar Objectives

This is a workshop - which means you will leave with some real-world goals, and the tools to implement them.

We will cover the strategies for creating a powerful and profitable cloud service offering for the small business market. My managed services businesses have been selling these bundled cloud services since 2008. In fact, it's one of the things that helped us thrive during the recession!

Details at

This is NOT a 30 thousand foot overview. We will discuss:
  • Specific products and services
  • How to bundle them
  • How to maximize profit
  • How to combine cloud-based and onsite options
  • The best way to integrate your onsite server
  • Managing multiple accounts
  • Specific scripts for implementing your "Cloud 5-Pack" (or whatever you end up selling)
  • How to change/upgrade the bundle
  • Tiered pricing options
  • Click-by-click setup and integration
  • Selling the cloud bundle
  • Bandwidth realities - and why you do NOT need massive bandwidth for a successful cloud integration
  • ... and more!

The handouts include VERY detailed instructions for configuring your bundles, implementing services, and migrating clients to the cloud. About 150 pages - spiral bound and available for download.

Details at

Target Audience

This all-day seminar is intended for any IT service provider who wants to sell very profitable cloud-based services to small businesses. The ideal end-user client is anyone with 1 to 20 users.

You can certainly sell these services to larger companies - and this seminar will give you all the tools and strategies to do that - but larger companies tend to have slightly different requirements.

The basic cloud bundle is intended to provide all the technology a small company needs, including email, storage, backup, anti-virus, spam filtering, patch management, and remote support. You will learn how to up-sell this to include telephones, security monitoring, and other services.

The overall goal is to help you create a combination that is reasonably price for the client and hugely profitable for you.

Bonus Membership

We have created an exclusive Facebook page, open only to people who attend this seminar. It is a place to discuss the strategies presented in the seminar, share their experiences, exchange documents, and so forth.

Once you register for any city, and pay your tuition, you will have access to the Facebook group.

Another great reason to register early!

Details at

Upcoming Cities Include:

Chicago, IL - July 25th

Detroit, MI - July 27th

London, UK - August 15th

Manchester, UK - August 17th

Edinburgh, Scotland - August 22nd

Dublin, Ireland - August 24th

Nashville, TN - September 19th

Atlanta, GA - September 21st

Adelaide, Australia - October 10th

Melbourne, Australia - October 12th

Sydney, Australia - October 17th

Brisbane, Australia - October 19th

San Jose, CA - November 14th

Oakland, CA - November 16th

Las Vegas, NV - December 8th  
Sign up early and save. 

Ken Shafer says I've done what Microsoft failed to do ...

I just finished the Seattle and Portland seminars for the SMB Roadshow. I got some great endorsements (which I'm posting on my YouTube Channel). But I wanted to highlight a few very enthusiastic videos here.

Ken from Portland says:

"Hi. I'm Ken Shafer with Agape Computing in Salem, OR.

Karl Palachuk has just done what Microsoft has failed to do by training the partners, managed service providers, and resellers in how to actually implement cloud services. Including checklists, business strategies, sales strategies, and most of all the technical implementation part that has been missing from larger cloud vendors. Thanks, Karl!"

- - -

Steve Banks from Seattle says:

Steve Banks from Seattle says, if you haven't see the roadshow, "You are missing out!"

- - -

As of this blog post, there are only 15 more stops on the 2017 SMB Roadshow Tour. Do yourself a favor and sign up today!