Over on Facebook I've exchanged some comments with folks about coaching in the IT business. The topic started out with the topic of why people are bashing coaches and coaching wholesale. In my opinion, every business owner on earth can gain tremendous value from coaching. Of course you also have to follow through, participate in your own (business) health, and make changes.
Steve asked the question:
Let me give you a few answers to this question.
First, I started out building a Managed Service business in 1995. I grew it to just over $900,000 in annual revenue. In the meantime, I wrote books and built another business to provide books, audio programs, and trainings. I built multiple streams of revenue. I also put money in the stock market, into rental property, and into other investments.
Truth One About Growing Wealth: You will never grow wealth from your "earned" income. You can only grow wealth from your investments. If your business is really a job, and you put all of your money back into your job, then you will never grow wealth. You have to take money (profit) out of your business and put it into other investments where it can grow.
Second, I firmly believe that every entrepreneur should have more than one business. Yes it's twice as hard. And yes you have to be strategic. BUT you can share employees across your businesses. You can move people to where the money is. You can move work to where the people are. You can ramp up and down and sideways with massive flexibility.
Eventually, I sold that MSP business and worked with them for a few years. But when the new owner sold the business again, I started a new Managed Service business. My current Managed Service business is small, but very profitable. It is built on a series of absolutes that 99% of all MSPs do not do consistently.
1) 99% of everything is paid in advance
2) 95% of all equipment is less than 48 months old. 75% is less than 36 months old. Why? New stuff doesn't break.
3) 100% of all users at all client are NOT logged on with local or domain admin privileges
4) 100% of all machines have a commercial RMM agent installed, are monitored 24x7, and are updated at least weekly
5) 100% of all machines have a commercial anti-virus program installed, which is updated daily
6) 100% of all email is filtered before it comes on premise (to an Exchange server or local Outlook)
7) 100% of our clients have a commercial grade firewall that is patched and up to date
8) 100% of all equipment under Managed Services is under warranty
9) 100% of all software under Managed Services is on a support contract
10) 100% of our work is done on a Service Ticket (service request)
11) We are rigorous about tracking our time
12) We provide a thorough monthly maintenance for all servers and critical network equipment
13) When we tell clients to do something, they do it
14) We charge enough money to make all of this profitable.
Our clients demand the highest level of service from their machines and they're willing to pay for it.
We have rock-solid processes. We don't make excuses about how we have to sell old equipment or cheap firewalls or let clients work on their own stuff.
The result is very simple: Things Don't Break.
Our least "needy" client pays for a ten-user package of Managed Services. They have two servers, one of which is a terminal server. They have a BDR, an in-house Exchange server, and a Barracuda spam filter. They run two line of business applications. The only thing in their office that's more than three years old is the UPSs in the server rack. But the batteries are newer.
They enter an average of one service ticket per month (company-wide). In most cases, it is billable because it's an add/move/change.
Our "neediest" client pays for a ten-user package of cloud and Managed Services. They have an SBS server that will turn three years old in June. So we are moving them to all-cloud services in January and February. They use a variety of desktops, laptops, and cell phones. All purchased within the last 36 months. Jan-Feb are their busiest time of year.
They enter about ten service tickets per month during January and February and an average of one service ticket per month for the rest of the year (company-wide).
Our clients do not experience hardware failures.
Our clients do not experience data loss.
Our clients do not experience down-time.
Our clients never get viruses.
Period.
And we're not unique in any way. Many MSPs do this and simply don't blog about it. Any IT consultant CAN create a business like this. You simply have to set absolute rules and enforce them absolutely. We all have the ability to provide the absolute best service and support. MOST technology consultants choose not to. Many don't know how to. But there's no mystery here. You just have to believe.
You have to believe that top quality equipment under warranty won't break.
You have to believe that systems that are patched and updated won't break.
You have to believe that clients are willing to pay for the best IF they get the best.
You have to believe that you can execute best practices - and then do it.
- - - - -
Mastering the technology is 25% of the battle, at most.
Mastering the business process is 75% of the battle, at least.
- - - - -
Now to the question at hand . . .
Step One: Create a business that runs well. When it runs well enough, you become the owner and not the manager. Owners don't have to live inside their business every day.
Step Two: I make personal choices that allow me to travel as much as I want. Here's what I mean.
For me there are three kinds of travel: Business travel that someone else pays for; Business travel that I pay for; and Personal travel.
Example One: My most recent trip to Australia. The SMB IT Professionals of Australia paid for my airfare and a few nights hotel to speak at their national conference in Surfers Paradise. So the flight was paid for, as was a few days hotel and food. As long as I was 1/3 of the way across the globe, I added a week to that trip. Out of my pocket came $400 for a condo on the beach and whatever I spent on food and travel. In all, it was about $1,500 personal travel.
Example Two: My most recent trip to Southern California. I paid my airfare and hotel for a few nights so I could attend and speak at SMB Techfest. All out of pocket. Then I stayed for a few extra days for personal vacation time, because I like the beach. I met up with friends and really had a 30% work day on Saturday. But I paid for that as personal. Business expense on my part (hotel, food, rental car): about $800. Personal expense on my part: about $300.
Example Three: My most recent trip to Hawaii. This was 100% vacation. Or maybe 90%. I did some writing and blogging. But basically, it was all out of pocket for my daughter and myself. Ten days in paradise. Total personal out of pocket: about $3,500.
If the first question is how I have time for all that, I hope it's answered. I can run 99% of my "book" and educational business from anywhere in the world. And I can run 95% of my Managed Service business remotely.
As to the money, the answer is very simple: I choose to spend my money on traveling. I don't buy a new car very often (I'm on my third car since 1997). I don't spend money on boats or big trucks or swimming pools or lavish clothing. I choose to spend my money on travel. I love meeting new people, doing new things, and seeing new places.
- - - - -
I'm sorry for the long answer, but it boils down to this.
About six years ago I wrote down the words, "I want to write more; I want to speak more; I want to travel more." And then I proceeded to create a life where I can do those things.
Steve asked the question:
"General question. If you have a successful technology business, and have SLA agreements, and day to day challenges, vendor management, etc. - how can you also fly all over the place for weeks at a time on speaking engagements? Not taking a shot; I'm genuinely curious. I'm cultivating my local market every single spare second I'm not working on direct items. I rarely can get away for a weekend, let alone a week, let alone halfway across the country. I don't see how one could do both of those things and be good at both of those things."
First, I started out building a Managed Service business in 1995. I grew it to just over $900,000 in annual revenue. In the meantime, I wrote books and built another business to provide books, audio programs, and trainings. I built multiple streams of revenue. I also put money in the stock market, into rental property, and into other investments.
Truth One About Growing Wealth: You will never grow wealth from your "earned" income. You can only grow wealth from your investments. If your business is really a job, and you put all of your money back into your job, then you will never grow wealth. You have to take money (profit) out of your business and put it into other investments where it can grow.
Second, I firmly believe that every entrepreneur should have more than one business. Yes it's twice as hard. And yes you have to be strategic. BUT you can share employees across your businesses. You can move people to where the money is. You can move work to where the people are. You can ramp up and down and sideways with massive flexibility.
Eventually, I sold that MSP business and worked with them for a few years. But when the new owner sold the business again, I started a new Managed Service business. My current Managed Service business is small, but very profitable. It is built on a series of absolutes that 99% of all MSPs do not do consistently.
My Absolutes for an Absolutely Profitable MSP:
1) 99% of everything is paid in advance
2) 95% of all equipment is less than 48 months old. 75% is less than 36 months old. Why? New stuff doesn't break.
3) 100% of all users at all client are NOT logged on with local or domain admin privileges
4) 100% of all machines have a commercial RMM agent installed, are monitored 24x7, and are updated at least weekly
5) 100% of all machines have a commercial anti-virus program installed, which is updated daily
6) 100% of all email is filtered before it comes on premise (to an Exchange server or local Outlook)
7) 100% of our clients have a commercial grade firewall that is patched and up to date
8) 100% of all equipment under Managed Services is under warranty
9) 100% of all software under Managed Services is on a support contract
10) 100% of our work is done on a Service Ticket (service request)
11) We are rigorous about tracking our time
12) We provide a thorough monthly maintenance for all servers and critical network equipment
13) When we tell clients to do something, they do it
14) We charge enough money to make all of this profitable.
Our clients demand the highest level of service from their machines and they're willing to pay for it.
We have rock-solid processes. We don't make excuses about how we have to sell old equipment or cheap firewalls or let clients work on their own stuff.
The result is very simple: Things Don't Break.
Our least "needy" client pays for a ten-user package of Managed Services. They have two servers, one of which is a terminal server. They have a BDR, an in-house Exchange server, and a Barracuda spam filter. They run two line of business applications. The only thing in their office that's more than three years old is the UPSs in the server rack. But the batteries are newer.
They enter an average of one service ticket per month (company-wide). In most cases, it is billable because it's an add/move/change.
Our "neediest" client pays for a ten-user package of cloud and Managed Services. They have an SBS server that will turn three years old in June. So we are moving them to all-cloud services in January and February. They use a variety of desktops, laptops, and cell phones. All purchased within the last 36 months. Jan-Feb are their busiest time of year.
They enter about ten service tickets per month during January and February and an average of one service ticket per month for the rest of the year (company-wide).
Our clients do not experience hardware failures.
Our clients do not experience data loss.
Our clients do not experience down-time.
Our clients never get viruses.
Period.
And we're not unique in any way. Many MSPs do this and simply don't blog about it. Any IT consultant CAN create a business like this. You simply have to set absolute rules and enforce them absolutely. We all have the ability to provide the absolute best service and support. MOST technology consultants choose not to. Many don't know how to. But there's no mystery here. You just have to believe.
You have to believe that top quality equipment under warranty won't break.
You have to believe that systems that are patched and updated won't break.
You have to believe that clients are willing to pay for the best IF they get the best.
You have to believe that you can execute best practices - and then do it.
- - - - -
Mastering the technology is 25% of the battle, at most.
Mastering the business process is 75% of the battle, at least.
- - - - -
Now to the question at hand . . .
How Do I Run a Successful Technology Business and Fly All Over the Place on Speaking Engagements?
Step One: Create a business that runs well. When it runs well enough, you become the owner and not the manager. Owners don't have to live inside their business every day.
Step Two: I make personal choices that allow me to travel as much as I want. Here's what I mean.
For me there are three kinds of travel: Business travel that someone else pays for; Business travel that I pay for; and Personal travel.
Example One: My most recent trip to Australia. The SMB IT Professionals of Australia paid for my airfare and a few nights hotel to speak at their national conference in Surfers Paradise. So the flight was paid for, as was a few days hotel and food. As long as I was 1/3 of the way across the globe, I added a week to that trip. Out of my pocket came $400 for a condo on the beach and whatever I spent on food and travel. In all, it was about $1,500 personal travel.
Example Two: My most recent trip to Southern California. I paid my airfare and hotel for a few nights so I could attend and speak at SMB Techfest. All out of pocket. Then I stayed for a few extra days for personal vacation time, because I like the beach. I met up with friends and really had a 30% work day on Saturday. But I paid for that as personal. Business expense on my part (hotel, food, rental car): about $800. Personal expense on my part: about $300.
Example Three: My most recent trip to Hawaii. This was 100% vacation. Or maybe 90%. I did some writing and blogging. But basically, it was all out of pocket for my daughter and myself. Ten days in paradise. Total personal out of pocket: about $3,500.
If the first question is how I have time for all that, I hope it's answered. I can run 99% of my "book" and educational business from anywhere in the world. And I can run 95% of my Managed Service business remotely.
As to the money, the answer is very simple: I choose to spend my money on traveling. I don't buy a new car very often (I'm on my third car since 1997). I don't spend money on boats or big trucks or swimming pools or lavish clothing. I choose to spend my money on travel. I love meeting new people, doing new things, and seeing new places.
- - - - -
I'm sorry for the long answer, but it boils down to this.
About six years ago I wrote down the words, "I want to write more; I want to speak more; I want to travel more." And then I proceeded to create a life where I can do those things.
Your dreams may vary.
:-)
Good read Karl!
ReplyDeleteI like how you set the ground rules that your clients must follow. How hard of a sell is this and do you find that you simply walk away from a number of prospective customers who you can't sell on this approach?
It is hard to have the convictions that you must do it this way. You will have to walk away from clients who are too cheap or don't buy into the dream. But there are plenty of people who Audis and BMWs and run their business with a commitment to quality. You can build a business based on people who want 100% uptime and are willing to pay for it.
ReplyDeleteAt this point it is not hard for me to sell this at all because *I* am committed to it. If you don't want what I sell at the price I charge, then I walk away. I don't spend emotional energy on people who want to spend less.
Hope that helps.