Tuesday, January 17, 2023

Should You Ever Sign a Non-Compete Agreement?

This is a timely question. I recently got an email from an IT consultant (Mr. M) who is negotiating to sub-contract for another MSP on a job.

The end-user client is using a management company that brought their own technology provider onboard. That out-of-town provider would like to sub-contract the on-site work to Mr. M., but they asked him to sign a rather broad-reaching non-compete agreement.

Then . . . there was trouble on site and Mr. M was able to fix it in short order. Now the out-of-state company is open to discussing a more moderate non-compete agreement. Still, the question remains:

"Should an MSP ever enter into a non-compete with another MSP/IT provider no matter what the language states?"

I'll give my answer below, but also make note of the timeliness of this topic. At the beginning of this year, the Federal Trade Commission proposed a new rule that would ban employers from imposing non-compete agreements on their workers. It's not a "direct hit" on the discussion of sub-contractors, but most of the arguments are the same.

See the official site on this, with links for public comment: https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-proposes-rule-ban-noncompete-clauses-which-hurt-workers-harm-competition

In many states, such as California, non-competition clauses are unenforceable. The basic argument is that employers cannot prevent employees (former employees) from earning a living. The intent is often stated as, "You can't take our clients." But the wording often prevents former employees from competing in their chosen profession.

Here is my response to Mr. M, who happens to be in the state of Oregon. I've added a few thoughts since I responded to the original request.

First: Do a little research. Are non-compete agreements legal in your state and the other service provider's state (if different)? 

I believe, in Oregon, a non-compete is only enforceable if a significant payment is exchanged. That makes it easy: Simply create a line-item for a non-compete at $10,000 per year. If they accept, you'll be paid for your loss of business.

Second: If you sign a NCA, it should be extremely tight. By that I mean that it should only apply to named clients. I assume this is just one client, and the real question is whether you will attempt to steal that client. So forget the broad non-compete and agree – for a price – that you will not solicit or accept work from this client for a period of time (one year, three years, or whatever). 

Third: There needs to be an out. No matter what you and the other MSP agree on, the client might prefer to do business with you. And no matter what your agreement says, they might fire those other guys in order to offer you the gig. They are not bound by your NCA or contract. SO, the NCA needs to have a way for you to get out. It might be a notice of 30 or 60 days. Or it might be a financial payout equivalent to X months of service, or some other variable based on revenue already defined in the contract.

Personally, I sign a normal service agreement with sub-contractors. It does not include a non-compete as they are not enforceable in California. But it has a standard non-disclosure agreement. And it allows either party to end the agreement with a 30-day notice.

Note, also, that my standard agreement with clients includes a clause preventing them from hiring my employees or sub-contractors. If they were to hire an employee of mine, it is treated as if we're an employment agency, and there's a hefty payment due. The payment is based on a percentage of the employee's wages.

- - - - -

I've mentioned (in the last two State of the Nation addresses) that I believe we're going to see more and more sub-contracting within the ranks of IT service providers. So, it's good to think about these things and have some answers ready at hand.

The FTC proposed regulation WOULD apply to contractors, and therefore would stop the kind of arrangement under discussion here. My guess is that there won't be strong opposition to the ruling, and it will take effect late this year or early next year.

The bottom line, therefore, is to pay attention, and be prepared to educate clients or contractors that non-compete agreements are becoming a thing of the past. 

NOTE: This is also a great example of why you need to hire an attorney to look through any agreement you sign. The laws (and in this case, regulations) can change any time. And even in this case, there may be exceptions at the State level that are not addressed at the Federal level.

Your comments and further questions are always welcome.

Thanks for the question, Mr. M.


Friday, January 13, 2023

Harry Brelsford Presents . . . MSP Rescue - Chicago, February 17th

All New Event!

Long-time community builder and author Harry Brelsford sent me flyer for this new event.

Says Harry, "It's time for MSPs to INNOVATE in 2023 to THRIVE under any economic scenario."

This one-day conference in Chicago is February 17th and features a great selection of speakers:

  • Harry (SMB MSP OG) Brelsford, CEO and Founder of SMB Nation
  • Lori Tisinai, President, President and Technology Optimization Specialist, Computer Concepts USA
  • Rayanne Buchianico, Owner, MSP Accountant and PSA Consultant at ABC Solutions, LLC
  • Curt Hicks, CEO at Centaris
  • Paco Lebron, Podcast Host at MSP Unplugged and CEO at ProdigyTeks
  • John Iwanski, Board Member, Moonshot Equity Partners
  • Shaun Lang, Senior Technical Account Manager, Ferrum Technology Services 
  • Juan Carlos Bosacoma, Founder and President, – CIO Landing
  • Chris Tiffany, Founder, Sprinter IT
  • Joe Tantillo, President, Apollo Blue

Learn more and register today at https://msprescue.pro/.


Friday, January 06, 2023

THE Class You Need: Standard Operating Procedures s for IT Service Providers - Starts January 10th

Core Standard Operating Procedures s for IT Service Providers - Our first class ever at IT Service Provider University - and still one of the most popular courses we have each year.

Register now.

You’re guaranteed to learn something that will make or save you the price of admission!

Taught By: Karl W. Palachuk, Author and community builder

- Five Tuesdays 

- January 11th - February 7th 

- All classes start a 9:00 AM Pacific

Register Now - Only $299*

This course covers the most important procedures you need to have in place to run an efficient and highly profitable Managed Services Business.

Whether you're a new Computer Consultant or an experienced Managed Service Provider, you need to create successful processes that will propel your company forward. Nothing is more critical to making profit than having the right processes and procedures in place!

When I take on new coaching clients, they have many of the same issues over and over again. And almost all of them boil down to SOPs - Standard Operating Procedures. Or the lack thereof.

Everyone knows you need SOPs. In fact you probably know which ones you need. But where do you start?

You will learn:

  • A practical introduction to SOPs
  • The relationship matrix of SOPs
  • Clients
  • Employees
  • Vendors
  • Internal Organization
  • The Ten Most Important SOPs for your IT Consulting Business
  • SOPs management, organization, and updates
  • Implementation strategies internally
  • Implementation strategies for clients
  • Service Department SOPs
  • Building
  • Training
  • Deployment
  • Upkeep
  • Avoiding the biggest pitfalls with SOP development and deployment
  • Building an Action Plan that works

and MORE!

ITSP University Certification

Meets Certification Requirements for


Service Manager


This class will be recorded. Each unit is generally posted within 24 hours of the live class. These recorded units will become the On-Demand class and you’ll have lifetime access to it.

Class Content

  • Unit 1 Introduction and Organization of SOPs
  • Unit 2 Managing Time and Money
  • Unit 3 Service Delivery and the Service Board
  • Unit 4 Practical Operating Considerations
  • Unit 5 Putting It All Together

Register Now - Only $299*

Note: * Members of the Small Biz Thoughts Technology Community attend at no additional charge. See details in the Community


Tuesday, December 20, 2022

Karl's 14th Annual State of the Nation Address for SMB IT - January 11th

Mark your calendar now and don't miss this once-a-year webinar. This will be my 14th Annual "State of the Nation" address for small business technology providers.

Wednesday, January 11th, 2023

9:00 AM Pacific / 12 Noon Eastern


Don't worry - No Politics Here! Also, no selling.

No cost. Just register and tune in.

Paste that date into your calendar so you don't forget!

My 14th Annual State of the Nation Address for SMB IT is scheduled for January 11th!

What a year - the one ahead and the one behind!

Please share the registration link with your friends on social media! 

I'll give a quick report on 2022 and some predictions for 2023. Then I'll introduce my company theme for the year - and how it fits in with helping YOU to be more successful in the year ahead.

I'll give you a hint: I think 2023 will be a great year for IT consultants. And I'll tell you why. Sign up now and join me January 11th.

Topics Include:

  • Highlights and low-lights from 2022
  • Technology Updates 2022 . . . and what's next
  • The Economy
  • Speculations about 2023
  • How to Guarantee Future Success

2022 was another strange year, but but getting back to normal and pretty good for many IT providers. 2023 looks good as well, although with a bit of inflation. As always, I'm going to spend the year committed to helping IT service providers build successful businesses that look to the future of technology and guarantee their success moving forward.

Tune in to learn more!

The world of technology always brings change. In 2022, it brought more regulation and more skyrocketing insurance rates. The NSITSP is maturing nicely. 

On the downside, China is about to go through what the rest of the world went through with Covid. There's no way that won't affect us. I have some speculation.

I believe 2023 will be a year of great opportunities and change. 

Karl's 13th Annual State of the Nation Address for SMB IT

January 11th

9:00 AM Pacific

Register Now - https://bit.ly/son2023

This webinar will be recorded and you'll be able to view at MSPWebinar.com.

- - - - -

This is always a very popular webinar - but don't worry. I have 500 seats available and and will buy more if we need them. One of the things I've learned is that there's about a 50% drop-off rate when things are free. If registration reaches 1,000, I'll buy the extra seats.

Plan to log in early, though, to guarantee your seat.

See you then.


Monday, December 19, 2022

Do You Still Need an RMM?

We get mail . . .

Daniel writes: 

Hi Karl,

I’m taking your MS in a Month course on demand, and I have some questions around RMMs. 

Given the recent (or not so recent?) and significant breaches caused by RMMs like Kaseya and SolarWinds, do you still advocate for using an RMM?

Why or why not?

If yes, What do you do/advise to protect yourself and your clients?

If no, What do you propose as an alternative?

-- -- -- 

Great question, Daniel.

Personally, I’m still a huge fan of RMMs. 

Let me take a step back in the evolution of Managed Services for me. For me, the evolution looked like this:

1) Develop a service based on regular monthly maintenance. Standardize this pricing.

2) Move these clients to a flat fee service based on regular monthly maintenance. 

3) Add tools to increase the number of devices that can be managed. This allowed me to increase profit dramatically because I collected the same amount per device (servers and workstations), but did not expend the same amount of labor per device.

This "roll your own" service included RDP to servers, VNC, alerts from Servers Alive, and built-in alerting from Small Business Server, backup software, and other installed software.

4) RMM tools/services then allowed me to bundle all those functions into one tool - and automate the deployment and management of anti-virus.

So, the evolution of managed services, for me, was a matter of relying on fewer tools over time while dramatically reducing the amount of labor it takes to manage users. At each stage, I managed more and more endpoints with less and less labor. The result was more and more profit.

The current fad of pretending not to use RMM tools is really just a reliance on Microsoft's RMM, plus various tools built into various services and software. Microsoft's RMM is either Endpoint Manager or Intune, depending on which day of the week it is. If you Google either one, you'll find it. I'll use the term Intune, although Endpoint Manager is more descriptive.

In some sense, this feels like a step backward, but it's not. Intune is extremely powerful. It requires a good deal of work to set up and deploy properly, but it's very well supported by Microsoft and is basically their "default" RMM product. 

This is a bit like stage three (roll your own) described above - but with fifteen years of evolution in products, services, security, consolidation, and ease of use. The biggest benefit of this approach is that Microsoft owns all the code and manages its evolution and support. You might also consider that its biggest weakness.

Personally, I like to use non-Microsoft tools to monitor Microsoft's security for the same reason that I want a non-Boeing employee to certify the safety of Boeing airplanes. (I love Boeing. I love Microsoft. That's not the question.)

There are three major points to consider when choosing an RMM

1. Where do you fall on the spectrum from 90% manual to 90% automated? Neither extreme may be possible, so there's no "100%" on either end. As with all technology automation, you are trading your labor for automation, and trading control at the same time. 

2. You still have to do a lot of work!!! This is actually where some MSPs are finding themselves on the wrong end of regulators: They sign contracts, deploy agents, and do nothing to monitor and verify that the agents are doing what they promised.

The goal here is to spend a small amount of labor to provide a large amount of value. (You are pricing on value.) The goal is not to spend zero labor and assume that the tools will take care of themselves.

The average good, brand-name RMM will give you lots of value and automation. But you still need to create processes and procedures to make sure it's installed properly, configured properly, updated regularly, secured, and working as reported. That's true of Intune or any other RMM.

3. The well-known attacks need to be kept in perspective. I believe the only people affected by the Kaseya attack were those with Kaseya servers onsite instead of using the cloud product. In fact, Kaseya knew about the vulnerability months in advance and plugged their cloud servers. The Solarwinds attack was actually on a very high-end product that is not used in the SMB market. It was not the Solarwinds RMM that you would ever deploy.

Also, consider the larger business context. My personal data has been compromised by every credit I've owned in the last ten years, my ex-wife's employer (many times), Target, Best Buy, Verizon, Yahoo, Facebook, LinkedIn, Marriott, MySpace, Twitter, Experian, Adobe, Equifax, eBay, Capitol One, DropBox, Tumblr, Uber, MGM, Zoom, my electrical utility, almost all online dating sites, and many others I'm not aware of.

The point is: We have to do the best we can, and we cannot stop using services because they might get compromised. Instead, we have to do serious due diligence to pick partners carefully. We need to thoroughly understand their services. We need to work to set them up properly, monitor them properly, and keep them updated. 

-- -- --

Bottom Line: I love a good RMM. It is the very basis of providing managed services because it allows you to provide the same value as doing everything manually without spending the labor to do everything manually.

In fact, I would go so far as to add a fourth point:

4. In the 2020's, you cannot provide appropriate monitoring, remote access, and patch management without an RMM. You can use Intune and say you're not using an RMM, but that's just legerdemain. 

The manual "roll your own" approach that I used in 1998-2003 is summarized in my famous 68-point checklist (Free here: https://store.smallbizthoughts.com/product/karls-famous-68-point-checklist-version-3-0/). But that checklist was once a month. Verify the security logs, disc space, and processor usage once a month. With any decent RMM, you can monitor these once every sixty seconds.

 More importantly, the world was a simpler place in 2000. Security was a concern, but malware consisted of frustrating and annoying behavior - not the actual loss of data and access to an entire network and all devices on it, or the payment of ransom. 

In my opinion, you have to have an RMM in the modern era. Just be sure to do your due diligence in picking a good one and using it properly.

Comments welcome.


Wednesday, December 07, 2022

ASCII Edge MSP Event Series Announced – Fresh Business Content for Growing MSPs

Press release from my friends at ASCII . . .


Bethesda, Maryland – December 7, 2022 – The ASCII Group, a membership-based community of independent North American MSPs, MSSPs and Solution Providers, today announced the keynote speakers and locations for its 2023 multi-city events, now called ASCII Edge.

ASCII Edge is an evolution of the company’s flagship conferences, formerly called ASCII Success Summits. The re-imagined events will have an enhanced focus on business education through best practices, networking opportunities, and collaboration in an effort to provide a competitive edge for MSPs in attendance. New and exclusive sessions will highlight supporting MSPs in growing their business practices. 

In addition to the general sessions, ASCII Edge 2023 content will feature a variety of industry experts and MSPs that are shaping the future of the channel, including:

Keynote Speaker – Blake Lemoine, "How AI is Disrupting Industries and How It Will Change the MSP Industry"

Making national news, ex-Google engineer Blake Lemoine saw first-hand the cutting edge of Artificial Intelligence and where it will lead. Lemoine will separate fact from fiction, highlighting the incredibly impressive advances being made in some areas as well as the areas in which the promises of automation are likely to be underwhelming. Armed with a little understanding of how to leverage these technologies, they will provide many opportunities for growth and prosperity – including in the MSP landscape.

Keynote Speaker - Brittany Hodak, "Creating Superfans: How to Turn Your Customers Into Lifelong Advocates”

Entrepreneur and fan-engagement guru Brittany Hodak shares the proprietary five-step SUPER Fan System she developed running successful campaigns and products for globally known brands including Walmart, Disney, the Boston Red Sox, and more. With her mix of humor and sharp business insights, she combines entertaining stories from her years of working with major stars with case studies of familiar brands to illustrate the effective and easy-to-master system for transforming customers into passionate advocates of your brand.

MSP Speakers:

“A Hacker’s Perspective: Is Your MSP Ready for Me?” Ken Wong, Founder & CEO, DragonTek International

“Growth Through Process – Fundamental Building Blocks MSPs Need to Achieve Repeatable Growth YoY," Brian Johnson, CEO, AVC Technology

“A Blueprint to Solve Talent & Hiring Challenges at 25% of the Salaries Your Competitors are Paying,” David Stinner, Founder & President, US itek

“We look forward to presenting ASCII Edge to the MSP community in 2023 as it is an enhanced educational event,” said Jerry Koutavas, President, The ASCII Group. “With topics ranging from operations to sales and marketing, each presentation will offer direct guidance and actionable take-aways. Our exposition space will allow attendees to see partner solutions in action and additional networking time will give attendees an opportunity to collaborate across boundaries.”

Thousands of ASCII members, technology vendor partners and business leaders will gather for these in-person events focused on industry best practices, enlightening keynotes, and education on channel solutions and services. Taking place over a two-day format, ASCII Edge is designed for MSPs focused on revenue growth and expanding their current business model.


ASCII Edge 2023 

Newport Beach, CA February 22 & 23            

Atlanta, GA March 22 & 23  

Dallas, TX April 19 & 20    

Newark, NJ May 24 & 25

Tampa, FL June 21 & 22

Columbus, OH July 12 & 13

Toronto, Canada August 30 & 31     

Chicago, IL September 20 & 21

Washington, D.C. October 18 & 19   

To learn more about ASCII Edge and to register for an event, visit https://events.ascii.com/.

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


Sunday, December 04, 2022

Webinar this week: Strategies for Finding and Keeping Great Employees in 2023

Do Not Miss This!

We are at a critical moment for the SMB IT industry. And it's not going to stop soon. Finding and Keeping Great Employees is one of the great challenges for IT service providers.

So, I'm putting on a two-part webinar series to address this topic and propose some strategies for you to think about for the next few years. The first webinar is this Wednesday.

Register once for both webinars - https://us02web.zoom.us/webinar/register/WN_QaMrDgbSQMymmLvnqd0G1w

Finding and Keeping Great Employees in 2023 is part webinar and part conversation about the realities of our current employment environment, with some thoughts about long-term and short-term strategies. With a bit of employment philosophy thrown in.

I will share some strategies for finding those great employees that are in short supply - and will be in shorter supply in the years ahead.

This webinar is open to all, and all related handouts and materials will be shared with all attendees. It will also be posted at MSPWebinar.com for viewing after the event. Register now so you don't forget.

I'm planning to leave time within the 60 minute slot to answer questions. But I'm also planning to go to 90 minutes if the questions keep coming. Some folks will drop after 60 minutes to get to their next meeting, but I'll stay as needed.

Webinar info is:

Dec 7, 2022 09:00 AM Pacific Time


Dec 14, 2022 09:00 AM Pacific Time 

Topic: Finding and Keeping Great Employees in 2023

One registration for both webinars:


After registering, you will receive a confirmation email containing information about joining the webinar.

Thank you all for your assistance with the survey. Please spread the word.


Wednesday, November 16, 2022

"Black Friday" Sale - on Classes and Certifications

IT Service Provider University has a rare 10% off sale.

Over at IT Service Provider University, we offer the best, most comprehensive selection of courses to help YOU build a great Managed Service business - starting with a great team.

We have more than twenty classes designed specifically to help IT Service Providers and Managed Service Providers build great teams who understand the managed service business model.

Pathways include . . .

  • Management
  • Technician
  • Sales & Marketing
  • Service Manager
  • Front Office

Each course is FIVE units of one hour each. We deliver ten courses live each year. All other courses are available on demand. And best of all, once you register for a course, you can re-take that course at no additional charge. This is particularly important because our industry changes all the time!

Each course is only $299 and includes lots of downloads and practical advice in addition to five hours of education.

We almost never have a sale, but now through November 30th, you can save ten per cent on all classes and certification. Enter the code sale2211 at checkout.

There is no limit to your savings . . . but you need to act now. 

Classes include:

Coming in 2023:

  • How to Survive Your MSP Company’s Success and Thrive in Good Times and Bad

  • Leadership Strategies for Successful SMB IT Consultants

  • And more!

NOW is a a great time to sign your team up for training that 100% focused on IT consulting AND practical information you can apply today.

Every course is guaranteed to pay for itself with the changes you'll make in your business - or your money back!

Check out all the classes at www.itspu.com.


Friday, November 11, 2022

My Best Advice for New MSPs or IT Service Providers

I recently published a video with LOTS of advice for people who are starting their own Managed Service Business (or any IT consulting business, to be honest). It was in response to an email I got from Jermaine. He’s looking at taking the plunge, so I thought I’d give him some tips and tricks.

You can view the video – and hundreds more – at https://www.youtube.com/watch?v=irhNrbT70k8

If you know someone who’s moving from being an employee to running their own business, please point them to that video or this post. 

Old people like me always get asked the question: If you could give one piece of advice to your younger self, what would it be. I’ve been giving advice for more than fifteen years, so I have lots of advice. But let me start at the top and give you some advice for anybody who is taking the plunge and starting their own It consulting business in 2023, or maybe even this year. 

The first piece of advice I would give you is to read Michael Gerber's book, The E-Myth Revisited. This is literally THE book for new small business owners. See link below.

If I could, I would make every business owner of every small business in the world read this book. Gerber looks at why businesses succeed and why they don't, which businesses succeed and why they do. And he gives some really amazing advice. I was blessed by being turned onto this book when I first started my first business.

I read this book at least once a year for the first ten years that I owned a business. And then I've been reading it every other year or so since then. So, I'm not kidding you when I tell you, go get this book. It will change your life and it will improve your business on day one.

And I'll just give you one little bit of advice from this book. You are a great technician, but right now you are in what is called an entrepreneurial fit. You think that because you're good at being a technician, you're going to be good at being a business owner. But they are not related to each other! I'm not trying to discourage you, but here's the important thing you need to know: You have to go into this with your eyes very wide open, and you have to know what you're getting into.

Second, If I were to give you one piece of advice, after all these years of experience as an independent consultant, my piece of advice would be take every piece of advice that you ever hear and try to integrate it. Some of it you'll be resistant to, even though you'll know day one that you really need to do it. Some of it you'll glom onto it and say, oh, I totally have to do that. And then you'll be very excited about it.

Some of it you won't know how to fit in with what you're doing, but you have to start reading. Whether it's Gerber or me or anything, you have to start reading. 

Third, if I'm going to give you one piece of advice, it's this go get yourself an account at Amazon.com, or Barnesandmobile.com, go get yourself an Audible account. Go get yourself a Kindle reader or iPad. Start consuming books. And I'm sorry if you've been one of these people who has always hated going to school. If you're going to be good at business, you have to go to school.

I could walk you through the thousands of books I have on business, but there's no point. You need to do this yourself. Read every business book that you can get your hands on. If you can try to read one book a week, even if that means it's on Audible and you listen to it. And, every week, just do whatever it takes to get through one book. 

Personally, I love Audible because I can listen to a book while painting a fence or doing chores. I normally listen to a book three times because I might be driving and I'll be turning a corner, trying to not hit somebody right at the moment that an important thing is said Or I doze off, or I start paying attention to birds in the yard, or whatever. We don't have a perfect attention span, you and me. So Audible allows me, at no extra charge, to listen to a book three times, and then I get the information.

Unfortunately, I'll tell you the truth, whenever I listen to a book on Audible or read a book on Kindle, and I really like it, I'm the kind of person, I want to go buy the physical book so that I can mark it all up and take notes and highlight all the stuff that's important. 

You should gobble up books as if they are food, because knowledge is ultimately the food of your business, right? And you need all the knowledge you can get. 

Sometimes you're going to read a book like Good to Great, for example. That's a great. Great book. And you're going to love the book. And then you're going to think, “It's really hard to apply to my very small business with one employee and just trying to make enough money to get through the week.” And then a year later you'll read Great By Choice, and you'll say, “Oh. This is much easier to apply to my business.”

Part of what happened is, it's been a year. You've been running a business. You've got some experience under your belt. It makes more sense. It's easier to apply. So, read or listen to every book you can find on business. Sometimes, let's be honest, a couple of chapters in, you won’t be motivated to go on. It will be difficult or boring. Don't throw the book away. Put it on a shelf and come back to it in a year. Come back to it in two years. Try. 

If you can't do a book a week, that's cool. Do a book as often as you can. If you love audio programs, check out every single thing done by Brian Tracy. He likes to call that audiobook collection 55 miles an hour University. That is, as you drive around doing your chores Saturday, or whatever. And in the course of a year, you will be able to consume enough books to be equivalent to getting a four year degree at a college. So your university is going to be educating yourself on every single aspect that you can find with regard to your business. 

Now, here are a few more recommended books just for you. 

Next up, the Small Biz Quickstart Guide. This workbook is something that I wrote in 2020 in response to a friend who said, “I want to leave my job and I want to go start another business. But before I do that, Mr. Checklist, I need you to give me the ultimate checklist of every single thing I need to know.” So I wrote down every question I could possibly think of that he would have (How to open up a bank account; how to get a business tax ID; how to find an accountant; how to figure out what's going to happen to your 401K; how to figure out what do you do about insurance between job and self-employment; and which kinds of taxes do you have to pay.)

All of those questions are in here along with the recommended answers. In this book, I basically divide your universe into three pieces. The first one is all the things you need to know and all the things you need to do in the one year before you quit. Now, if it's too late, you can use that to catch up.

The second group is all of the things you need to do in the month between quitting and starting a new job. Things like actually getting that tax ID, actually getting that bank account, actually getting your business cards printed.

And then the third section is all those things you need to do the first year. And there's a lot less hurry about that. But you should figure out your cash flow. You should know what a cash flow report looks like. You should know lots of things.

Overall, this is a workbook, intended for you to answer your own questions. So it's just a place to start. There are probably other resources, but if you look for this on Amazon or Kindle, then you're going to be able to find other references of other similar books. 

I know this sounds self serving, but I'm just telling you, if you are in IT, you need to read Managed Services in a Month. This book is designed literally to change your business in 30 days. 

I'm motivated to put out that video because Jermaine sent me an email and said, I stumbled upon this book and it really did an amazing job of helping me get all set up and ready to go, answering the right questions, being headed in the right direction, and avoiding some really big mistakes.

Managed Service in a Month is the best selling book ever on managed service. It's one of the first. I wrote the first, Erick Simpson wrote the second, and Managed Services in a Month is the third. It has been revised several times. It is designed for you to be as successful as possible with managed service. It’s a quick read and I recommend that IT professionals read it as soon as possible before (or after) you start your business. 

Somewhat related to that, and often purchased at the same time, is Service Agreements for SMB Consultants

If I could only give you one piece of advice, I would tell you is get paid in advance for absolutely everything. Another one would be to use a managed service model. Another one would be to have a service agreement. Sign a contract with every single person that you do business with. Sometimes you need just a one pager that's just got the most basic outline that says, “I'm going to bill you and you're going to pay me.” Sometimes you need something a little more complicated that says, look, we're going to have an ongoing relationship. What does that look like?

Your service agreement is absolutely not about your service. It's not about what you sell. It is not about your statement of work that gets stapled to the end. The service agreement is about your relationship with your clients. And to be honest, it's kind of like the fence in your yard. Nobody cares about the fence until there's a problem about something hanging over one side of the fence or the other. 

When things go wrong with your client relationship, you need a contract. Nobody ever reads the contract until the day there's a problem. But you have to have that contract in place. Do not resist me on this. Just simply do it, because you're going to do it eventually. You might as well, do it now. 

I mentioned that you should get paid in advance for everything. Guess what? That's one of the Absolutely Unbreakable Rules of Service Delivery. The sooner you do that, the better. That, again, is one of those pieces of advice that will change your business. I wish somebody had told me on day one to get paid in advance for absolutely everything. It would have changed many, many elements of my life and made me a bunch more money.

I'm actually working with a coaching client right now to help transition from being paid in arrears to being paid in advance. And let me tell you, that transition makes you a lot of money. But if you're just starting out your business, start it out on the right foot and get prepaid for absolutely everything you do. This book is filled with lots of other great rules about how you run your business. For example, we only work with people we like.

As silly as that might sound to you when you're starting out, when you think you need to take every nickel that you find, the truth is that you have to work with people that you can sustain a relationship with. If you find somebody who just irritates you every single day, you are not going to have that person as a client for ten or 15 years. So you might as well not have them as a client on day one. Another couple of other rules in here that are huge for people just starting out. 

You do not have to help every person who needs help and you do not have to pick up every nickel you find on the sidewalk. Too many people starting out make the mistake of saying, “I have to work. I have to scratch and claw. I have to take every job because I need the money.” If that's the situation, you need to stop, rethink a whole bunch of your business and schedule a 20 minutes call with me.

I really will talk to you about your business and why you think you need to take all this money even though it leads you to making bad decisions and it leads you to mold your business in the wrong direction. 

I don't want you to think that I'm just trying to sell you a bunch of books. You may be reluctant to believe this, but Small Biz Thoughts and all of my businesses are literally dedicated to making IT professionals as successful as possible. That is the mission I have for my personal life and for my business life.

That is why I'm here. That's why I do what I do. And these books are not that expensive. That's the beautiful thing about books. At $20, $30, or even $40 a piece, you can buy an unlimited amount of books, and every one of them should pay for itself with one job, with less than one half hour of labor.

Books are the greatest investment you can make in your business. Education is second. 

Now I will pitch you something, which is the Small Biz Thoughts Technology Community includes all of the books I've ever produced in one big bundle, plus all the videos, all the training, and all the audio programs, plus all the slides, all the checklists, and everything I've ever done. It's all in the Small Biz Thoughts Technology Community. 

Also consider The IT Service Provider University. We now have 20 classes that are 5 hours each (five units each). And all of those classes are included in the Small Biz Thoughts Technology Community for one low price. And by low I mean 10% of what you're probably thinking, because everybody in this industry seems to think that you have an unlimited amount of money. I don't think that. I think you do have a limited amount of money.

And when you're small and you can only change one thing at a time, you need to spend a little bit of money, make a change, talk to some friends, get some advice; then change one thing, talk to some friends, get some advice, etc.. 

Almost every program that you'll find in this industry charges 10, 15, or 20 times what I do in a year. And it's not because I don't need the money. It's because I want to help you.

That's my primary goal. And I don't want to bankrupt you by having you pay all this other money. Right now, the Community is only $1,199 for the year. We're going up to $1,299 for the year in July of 2023. So there's not a huge hurry.

But you get literally every book I've ever written, plus 20 classes. That’s 20 times five or 100 hours of education. It's all included. 

Bottom Line: I want you to be in this business and I want you to be successful. 

If you can only buy one book, buy The E-Myth Revised by Michael Gerber. If you can only buy two, buy Gerber's book and then buy Managed Services in a Month. 

But if you can go through the books that I mentioned in the order I presented them, I really believe it will help you get your business launched in the right direction, day one.

Also: Get on my mailing list. I'm going to put a link down below to the mailing list. It is mostly filled with information and tidbits and a calendar of events in our community.

Here are the books and products mentioned:

Books mentioned: 

E-Myth Revisited - Why Most Small Businesses Don't Work and What to Do About It - by Michael Gerber Affiliate Link 

Good to Great - Why Some Companies Make the Leap...And Others Don't - by Jim Collins Affiliate Link 

Great by Choice - Uncertainty, Chaos, and Luck--Why Some Thrive Despite Them All - by Jim Collins, Morten T. Hansen Affiliate Link 

Small Biz Quickstart Workbook - The Ultimate Guide for First-Time Entrepreneurs - Karl W. Palachuk Affiliate Link 

Managed Services in a Month - Build a Successful, Modern Computer Consulting Business in 30 Days, 3rd Edition - Karl W. Palachuk Affiliate Link 

Service Agreements for SMB Consultants - A Quick-Start Guide to Managed Services - Karl W. Palachuk Affiliate Link 

Absolutely Unbreakable Rules of Service Delivery - How to Manage Your Business to Maximize Customer Service, Profit, and Employee Culture - Karl W. Palachuk Affiliate Link

and . . .

IT Service Provider University: https://www.itspu.com 

Small Biz Thoughts Technology Community - https://www.smallbizthoughts.org 

Sign up for Karl's email list: https://smbbooks.biz


Thursday, November 10, 2022

When Should You Get a "Real" Office - If Ever?

We get mail . . .

Ali emailed me with a question that's very important right now:

His business has three employees. "I closed our only physical location during the pandemic and started working from home. Now, I have a small budget and wondering how important is to have a physical location instead of a residential address. Does it affect our trust in customers? Should I lease or not?" 

Short Answer: All small businesses should put off getting an office outside the home for as long as possible.

Longer Answer: Great question. Unless there's a specific reason to have an office outside the home, you probably don't need one. There are several reasons for this.

It’s a huge expense. In fact, the expense is larger than you project. Once you have an office, you'll invest in furniture, a workbench, tools, and probably a rack for computer equipment. You'll buy a refrigerator, office products, a workgroup printer, etc. You think you won't, but you will.

Again, when the time comes, you'll need all that.

I operated for almost ten years with a home office. It was when we started to grow that meeting with technicians at a local coffee shop became impractical. We quickly went from four people to twelve, so an office became a necessity.

You probably don't need the office for prestige. I think we had one client visit us one time in 25 years. In our business, we either work remote or we go to the client’s office. Today, there is no stigma about working from a home office.

In my last MSP business, and in my current incarnation, I have turned my front room into an office. We have three desks plus work tables, shelves, and printers in that office. Employees only show up enough to keep in touch and build the culture. Very little work needs to be done in the office.

A UPS store is a great asset for home offices. I've always had a UPS store mailbox, even when we had a real office. You can get the smallest mailbox and still get access to all their services. This gives you a “business address” and you can send all business stuff there. It has the bonus that you can have all your packages delivered there. Someone always signs for them, and they keep the boxes safe until you pick them up. This is handy and frees you up to work and do sales without being tied to your home/office.

Also, if you think you need a specific city address for prestige (e.g., the big city rather than a suburb), you can get a UPS Store mailbox inside that city. Then just check for packages once or twice a week.

I loved having an office. I started by renting space in another consultant's office. Ironically, they had signed an expensive lease deal and ended up barely using the space at all. We got one large room to put three/four people in, plus use of the kitchen and meeting space. From there, we moved into a much larger office as we added staff. We kept the larger office for almost nine years.

When I sold that business, I continued to work with them in a special role. Mike moved us out of the big office into a much smaller office and had techs show up as needed. It cut the rent by about half. I got the "garage" space as my office. :-)

When he sold that business, I started my second MSP business in my home office and dedicated one bedroom for my office and another for Monica.

You need to be strategic about the office move. Most small businesses invest in an office long before they need one. Once you commit to that rent, increased insurance, internet, etc., you increase expenses quite a bit. So please consider all the variations that might work to keep you "at home" for as long as you can.

You may have personal reasons for getting out of the house. Some people simply cannot work at home. They can't stay focused. They can't stay out of the kitchen. They can't work with kids or spouse around. So, you have to have the right temperament to successfully work from home.

These are just a few things to consider, especially if you think we're going into a recession. No matter how mild, a recession is a great opportunity to conserve cash as much as possible.

Comments and feedback welcome.