Sunday, June 24, 2007

Is Your Company CEO Bound?

Is your company CEO bound? You know, it's a bit like being CPU bound.

One of the great technology books of all time was the performance monitoring book in the NT 3.5 Resource Kit. Want to know whether your bottleneck is the disc, the cpu, or the RAM? Here's your guide to investigating.

Companies are the same way: There are always chokepoints or bottlenecks. Is cash not flowing in fast enough? Do you need more labor? Are things being completed in a timely manner (taxes, filing, marketing, newsletters, invoicing)?

I'm often asked how one goes about moving from a one-person shop to two. And the move from two to three is just as hard (maybe harder).

Or the question is, when do I hire an assistant? When do I have someone else handle payroll? When do I hire a sales person?

Unfortunately, there is no one answer to these questions. For some people, hiring a technician right away makes the most sense. For others, hiring a bookkeeper right away makes sense.

But the question remains: How do you know when it's time to hire someone, and what position do you fill? Here, I believe there is a pattern.

Do a little troubleshooting in your own organzation and find the chokepoints. In most micro organizations (1-5 people), the chokepoint is going to be the owner. I call this being CEO Bound. It's a lot like being CPU Bound.

Now the question becomes a little easier: What is not being done because it relies on me to do it? Then I hire a person to do that thing. The immediate results are: 1) Way too much capacity in that one area; and 2) Lots of time for the CEO to get other things done.

For example, my first hire was a technician. That allowed me to get more clients, bill more hours, and make more money. At the same time, it gave me time to do marketing, put on seminars, give lunch speeches, and get the clients we needed to keep the other consultant busy.

Second, I hired an assistant. If you want to grow your business, or just make more money where you are, hire yourself an assistant. See

With a well-oiled machine in place, the third hire was also a technician. But with a twist. Now someone was taking on the role of Service Manager so I didn't need to do that. With each technician, I gained more freedom from delivering technology and played more of a management role.

But we followed the same pattern: When Karl becomes the chokepoint for some important function, we know who to hire next. When all the new internet accounts are backlogged (DNS changes, moving email to a new server, setting up Exchange Defender, etc.), we hired soemone to take over those special functions.

When requests for quotes were backlogged, we hired someone to perform that task.

In each case, our organization became CEO Bound and the solution was to hire someone who took care of that backlog. Of course that person worked more hours than required for the specific backlog, so our capacity for other things increased as well.

The beautiful thing about this approach is that it's flexible and customizable. Your chokepoint is not the same as mine. We have different skills and we like different things.

Remember: you will create some chokepoints simply because you hate to do certain tasks. It's not that you can't balance the check book: you just hate doing it! The good news here is that you can give up something you hate, and your business will be better for it. Sweet!

- - - - -

Here are some questions to consider:

Where are you the chokepoint for your organization?

If you could give up one function, what would it be?

Is there one thing that takes 8-10 hours of your time each week? If so, how could you structure this so someone else can do it?

To what extent is fear keeping you from handing off this function?

Do you really want to grow, or are you comfortable staying where you are?

If something really needs to be done, and you're not doing it, who will?

Thursday, June 21, 2007

Mark Your Calendars for September 28th

Super Mondo Pre-Day Events for SMB Nation

I just posted a new seminar announcement over at

Here's the bottom line: Three hours of all new material.


HaaS (Hardware as a Service)
-- How KPEnterprises jumped in with both feet and made a bunch of money!


Perfect Projects Every Time
-- A great introduction my new Super-Good Project Management Binder.

Free but you gotta register.

Please go to

Do the Microsoft Shuffle

    "You put your business card in
    You take some business card out
    You put a logo t-shirt in
    And you shake it all about.
    You wander the halls and meet a buncha folks.
    That's what it's all about."

Hey, kids! It's that time of year again: Two big Microsoft events that result in one very odd coincidence.

Event One: The Worldwide Partner Conference. The biggest little gathering of nerds you've every seen. (You've never seen so many blue tooth borg implants!)

Event Two: The annual job shift, in which 50% of the Microsoft employees get new assignments for the new fiscal year (July 1st).

The coincidence: Almost no one from Microsoft ever brings their business cards to the Intergallactic Partner Conference. It's like the car salesman who says he hasn't had cards printed yet. "Let me scratch it on the back of this used napkin."

The Microsoft Shuffle is a very important time for MS -- and for you, the partner. Some people take on new responsibilities. Some get assistants. Sometimes offices merge. New products are being announced, along with new product managers. The landscape is a-changing.

Which is one reason it's good to show up at WPC!

I've exchanged emails with several people in the SMB (SBS) space whose jobs are changing July 1st. Do you know what's happening in your world?

I know you've looked at the tips for attending a conference

And Vlad's cast on conferences in the 21st century

But here are a few last-minute tips for the Intergallactic Partner Conference.

First, if you're within a day's drive of Denver (which is about where the Denver Airport is located), then register and attend the Small Business "Pre-Day" Event.

Second, tune up those business cards. Just a reality check here: It is cheaper to get business cards from Vista Print or iPrint than to make your own laser-perf wonders.

(I wonder why the MS folks don't do that.)

If you're really cheap, you can get the free cards with the vista print logo on the back. If you notice someone looking at it, just say "That's my other company." Give them a 30 second elevator speech on how you've made millions of dollars giving away free business cards. No will know you don't own Vista Print.

Third, I know it's a bit late, but consider going to the conference. You'll meet people from all over the world. Someone's bound to buy you a drink. You'll get a real sense of what Microsoft thinks is important for the next 12-24 months, and you'll come home with free t-shirts.


If you've been to any of my presentations in the last two years, you've sat through the five-minute spiel on how you are responsible for looking ahead five years. Of course no one has a five-year crystal ball. But your job is to understand the business you're in, to look to the future. To speculate about how you're going to thrive in the years ahead.

Attending the largest event sponsored by the biggest player in your space will give you tremedous insights into where your business is going. And you'll have unprecedented access to people who design, build, support, and sell these products.

Anyway, if you can't make it this year, put it on your radar for next year.

Monday, June 18, 2007

Daily Client Phone Calls

In another post ( see ), I mentioned that our Customer Service Manager has three primary priorities:

  1. Make all scheduled client phone calls.
  2. Get out Quotes.
  3. Have roadmap meetings with clients.

That discussion was about getting out quotes. In fact, we created this position to deal with the backlog of quotes that needed to go out.

So why are phone calls the first priority for him? The answer is: the power of client management.

One day, one or our largest clients was lamenting that things just don't "seem" to be going as well as they could. We reviewed the service log. No high or medium priority items. All low priority items were "in progress." He agreed that everything is getting the attention it needed.

So what's the problem?

Well, the last support guy that the office manager liked called her every day.

Nerdy devil on left shoulder says: "Who gives a rat's rearend? I'm not going to call 100 people every day. I'm in the technology business, not the hand-holding and client-petting business."

Non-nerdy angel on right shoulder says: "She doesn't really need a call every day. She just needs someone to call her enough so that she's happy with the relationship."

So we made a deal. Charlie (the new customer service manager) will call her and go through every outstanding service request. Then he'll call the next day and do it again, but suggest going to twice a week. Then, when she's ready, go to once a week. As the two have their weekly conversations about every item on the list, the calls will get shorter and the feeling of love and understanding will go way up.

This worked like a charm. In fact, it worked so well that Charlie is now doing this with several clients. Not everyone. But the biggest clients, certainly. And when someone's going through a network migration they get this treatment. Or when there's a major project or two going on.

And what makes this so successful?

People love attention.

Instead of calling and saying "Let's talk about the latest offer or service from KPE," Charlie calls and says "Let's talk about you, what you need, and what you want."

For the most part these phone calls are 30-60 minutes per week. Not a bad investment considering the relationship management that goes on.

One of my maxims is that you're going to see positive results in whatever you put your attention on. I mention that a few times in Relax Focus Succeed.

Whatever you put your attention on, that's what you're going to get better at. So if you put your attention on your clients, you'll have better client relationships. And, in fact, you'll have better clients. They'll know your business better, like you better, have a personal relationship with someone, and have an ongoing dialogue. So resolving problems will be easier down the road. And when you say it's time to replace an old computer, they'll trust you more.

When we're really small (1-2 people) this process seems to take care of itself. Then, with a little growth, it becomes harder to find the time to keep this communication in place. At some point, you need to re-envigorate the relationship side of the client relationship.

For us, that's a Customer Service Manager making daily phone calls.

Saturday, June 16, 2007

Roadmap Update

Technology Roadmaps for Clients

Back in October I posted a note about creating Technology Roadmaps for clients. See

Our company -- KPEnterprises (Sacramento's Premier Microsoft Small Business Specialist) -- provides free planning meetings for our clients under contract. Basically, our goal is to help them develop a budget (most don't have one) and to develop a vision and plan for their technology.

I promised an update. After about nine months, here it is.

First, we've had excellent luck with clients who truly buy into the concept of a totally outsourced I.T. department. Which is great.

We've had less success with people who just want to save a little money but not really turn things over to us.

Anyone who has scheduled and participated in two meetings had loved this process. We start with a "business plan" for their technology department. We also talk about new technology they need to be aware of (e.g., no one's going to be using Server 2003 or SBS 2003 in three years).

As a rule, clients who invite us to talk to the highest levels of management have embrace the roadmap process the strongest. It's a waste of time to do this with middle managers who can't make any decisions.

Second, Seminars kicked butt. We held a Technology Roadmap "Summit" for our clients, even those not eligible for the quarterly freebie. Everyone filled out our forms -- 30+ pages of questions. In fact, we got so much work, I've hired three people since then.

Do this.

Third, No one wants to read the books we gave them. We didn't think they would (see original post), but the book makes a very impressive leave-behind.

As you may recall, I ordered copies of Patrick Colbeck's little book "Information Technology Roadmap for Professional Service Firms." I gave some to clients at meetings and seminars. Available at

People who are intrigued with the concept appreciate the book, but not enough to read it. This is an instant gratification world: they just want us to do the work. Probably worth giving it to them. Good P.R., but not a focus for their attention. So far, no one has asked me a single thing about the book. But the price is right, so it's worth doing.

Fourth, we have seen a nice flow of hardware sales from Roadmap clients. Once they buy off on the concept of regular upgrades, the purchase orders start rolling in. And when something breaks, clients buy the right thing instead of just "something" to get by. They don't always buy from us, but it's still good to see old pieces of junk get replaced with new machines -- with 3 year warranties.

Newer equipment (no matter where they got it) lowers the cost of delivering managed services.

Fifth, quarterly meetings are a lost cause. Instead, I've tried to meet monthly. Meetings are constantly rescheduled, so this has become semi-monthly in most cases. This is fine, though. We do what we can. If we stuck to quarterly meetings, they might be every six months.

Sixth was quite unexpected. On more than one ocassion we found ourselves with clients who lost their in-house I.T. person and simply turned the whole operation over to us. I believe the Roadmap process convinced them that we could simply handle everything. This was based on follow-through and consistent high quality support.


The biggest change for KPEnterprises

Two big demands resulted in us making one major change in our company. First, we developed a huge backlog of Requests for Quotes. All quotes had to be generated by me, so I personally was the bottle-neck in the process. When I realized that RFQs exceeded $100,000 it was clear that someone else needed to do this.

Second, we had (still have) a growing backlog of Roadmap meetings. No one is waiting on us, but we haven't tapped 80% of our clients. Since we now know that these meetings directly result in RFQs and sales, they are now a high priority in our company. We also have two major new clients who need attention on this.

So the big change for us is: We have hired a customer service manager. One of his primary jobs will be to learn and do this process. In fact, his highest priorities each day are:

1) Make all scheduled client phone calls.
2) Get out Quotes.
3) Have roadmap meetings with clients.

Anything else he does is far, far less important.

It makes perfect sense. Charlie will meet with the client regularly, gather feedback on our general performance, kick the service team in the butt when needed, and generally guide the relationships. His time is not expected to be billable, but he'll be managing relationships, which should make the whole operation work more smoothly.

If you aren't doing "roadmap" meetings with clients, I highly recommend that you start soon.

Friday, June 15, 2007

Know What You Know

Wayne posted a note here: that got me thinking about how we handle vendors and 3rd part technical support.

One of the mantras in our company is "Know What You Know."

When you know something -- really understand it well enough to teach it -- then don't let vendors trick you into not trusting yourself.

If you don't know something, then you need to assume the technician on the other end of the phone does.

But if you do know something, explain that to the technician and make him work with your assumptions.

Here's an example.

We had a client whose new laptop would not connect to RWW via a Verizon Wireless internet card.

RWW worked. This user could log in by other means. This laptop could log in if connected to the internet by other means.

Called Verizon. Technician has never heard of RWW (can't blame him for that). Asks what the port number is.

Verizon technician says "We block port 4125."

Not "Maybe we block . . ." or "I wonder if we block . . .."

He said "We block port 4125."

And we said "No you don't." Because we know what we know. We know it worked before, and we know it works with other clients.

You're stabbing in the dark. So unless you can prove that you block port 4125, let's work under the assumption that you don't.

Of course we found the problem, and of course the ISP didn't block 4125.

The point is: We didn't waste a bunch of time wandering down the wrong path just because the tech on the other end of the phone sounded confident when he was grasping at straws.

It's very important, in a potentially stressful situation, to know what you know. Don't let someone else's fishing expedition send you off on the wrong path.

Along these lines, we always have a TSR Log -- Troubleshooting and Repair Log -- for any incident that lasts more than fifteen minutes. With this log we can state very clearly what we've tried and what the results were. We can make a change and then undo it with confidence because we have a map of where we've been.

The TSR Log also helps us keep the phone support people on track. They don't get to try the same "fix" three times. This is especially important when the call is escalated. The tech on the phone my be doing due diligence as far as he's concerned, but to us it's just burning time if we've already tried the fix.

Save yourself time, money, and frustration: know what you know.

For another example, see

Thursday, June 14, 2007

Cracking the HaaS Nut

HaaS 1.0

So there's some buzz in the community about HaaS -- Hardware as a Service.

Well, we've been pondering this for some time.

We've talked to other consultants, clients, suppliers, and financiers. The main thing we discovered is that

. . . No One Gets It . . .

I'd define HaaS as follows. Includes

- All hardware
- All software
- All service labor

- wrapped into one nice monthly payment.

Perhaps the closest analogy is a lease. But while most leasing companies will include installation labor, they do not want to include ongoing monthly payments. After all, what's the point of financing 36 monthly payments inside 36 other monthly payments? After all, a lease is financing secured by the hardware and software.

So, Issue One is financing.

Issue Two is ownership. Who owns the equipment? If the whole deal is somehow financed with the end user as the named lessee, then the end user owns the equipment. If you are named in the financing, then you own the equipment. The advantage to owning the equipment is that you have the assets on your books. In case you want to use this in valuing your business, it might be good to have the assets on your books. The bad news is that they're depreciating assets.

Issue Three is related: liability. We all hope nothing ever goes wrong. But, there is a "worst case" scenario to consider. If something does go wrong, whoever has their name on the lease could end up owing a bunch of monthly payments and losing the equipment.

I think the chance of this is rare, but my crystal ball is a little cloudy.

So what's the upside?


Right now, we sell the average desktop machine with MS Office licenses, monitor, and UPS. Profit is about $275.
Our managed service offering is $60 per pc per month. So this machine gets us $2160 in three years.
Of course we have to pay for labor, as well as Kaseya or Zenith agent.
Total profit is just over $2,000 in three years.

With HaaS we finance the wholesale price of the equipment at less than $40/PC/month.
Same costs for labor and managed service agent.
But with HaaS we charge the client at least $149/month.
Now Profit is about $3,500 in three years.

Very rough numbers. This is about 175% of the profit without HaaS.

Our first deal went very smoothly at $149/mo. We asked the client how much he would have been willing to pay. He didn't have a precise number, but we went back and forth a bit and I think $159 would have been no problem; at $179 he would have delayed and thought about it. I think at $169 he would have thought it was a bit high but signed anyway.

Of course your mileage may vary.


The bigger picture is that, with these kinds of numbers, we're going to be a lot more flexible about what we cover.

We've listened to clients, and they've told us: "We don't want a line between what's your responsibility and what's our responsibility. We want you to include everything."

So that's our goal.

With managed services we spend a fair amount of time educating the client about what's covered and what's not. We see HaaS as the next step: There needs to be a real good excuse for something to not be covered.

We've developed a formula for pricing HaaS so that we can be completely flexible on hardware and software (no cookie cutter required). This also allows us to show consistency: If you have two servers with different configurations but about the same price point, their HaaS agreements are going to look about the same.

Stay tuned. You'll hear more soon.

Sunday, June 03, 2007

Overloading SBS

SBS is an extraordinarily complicated product. But it's sold to end users as if it's a plug and play appliance.

"You can host your own internet site: web and email! In addition, you've got all the benefits of Server 2003 and Exchange! Firewall protection. Microsoft's most powerful database. Plus Remote Web Workplace and Sharepoint. And every one of these has been completely revamped and replaced in the last three years. It really is the best $600 product in history."

"Golly Gee, Mr. Balmer, That's Swell!"

Many people don't sell SBS Premium because . . . to be honest . . . we're already asking that little box with 4GB Max RAM to do an awful lot.

Here are a few notes from a conversation with someone on the SBS development team. I don't have permission to attribute his comments, but I don't think the term "NDA" came up either.

Consider this as a strategy going forward:

Don't install anything on an SBS box.

That means SQL-based products go on a second server.

No line of business applications on the SBS box.

No business critical applications on the Small Business Server.
(Except domain control, A.D., Exchange, SharePoint, file shares, RWW, Faxing, DNS, DHCP, and Group Policies.)

We're already putting Terminal Services on a second server.


The theory is this: A plain vanilla SBS2003 install is complicated enough.

When you control (or at least understand) everything about the basic operations of the server, you can handle most troubleshooting in short order.

With R2, you can sell a separate SQL server and use the SBS CALs to access it. So that saves some money.

Just because we CAN load a nearly unlimited amount of stuff on a server doesn't mean that it's a good idea.

So what's your primary Line of Business app? Dentrix? American Contractor? PC Law? Whatever it is, start moving that stuff to a separate server.

How hard is this? I don't think it will be hard at all.

Begin saying this line and teach it to all of your technicians: "SBS already does more than enough work for your company. If you have any other applications that need to be installed on a server, you're going to need another server."

Tatoo this on your arm.

Don't make it a variable. Don't make it a discussion.

From now on "We really can't install additional applications on the Small Business Server."

From this date forward, the standard SBS install requires two servers. Neither one is very expensive (SBS is limited to 4GB RAM, and the second one doesn't need to be too beefy because SBS is still doing most of the work.).

Remember: Centro will require three servers. And that marketing space starts at fifty users.

At the end of the day, it costs money to do business. Clients need to know that this decision will save them time, trouble, and money over the three year life span of their servers. After all, support on that second server will be extremely cheap.

When you call the horribly incompetent SBS2003 support line, your chances of success will go up if your SBS box is pretty darn vanilla. And if you eliminate ISA and SQL from the mix, your chances will go up even more.

When you call PSS/CSS for support on Server2003 and SQL, those lines are staffed by people who actually know the product. The first engineer you get to will actually have seen the product before. And you'll know that you can trust them to muck around because they can't break anything they can't fix.

So, I propose that we work on this angle. And my friend on the SBS Development Team will work from inside the belly of the Leviathan.

It would be a great help if Microsoft would take the official line "We don't support the installation of additional programs on a Small Business Server." Not that they wouldn't support it, per se, but that you know you're working on an un-approved environment and you can expect downtime, delays, and problems.



Many LOBs require a separate box. Many consultants use ConnectWise. It cannot be on the domain controller and must be on a separate box. We use Kaseya. It must be on a separate box. Anyone who uses these three products has a Small Business Server, a ConnectWise Server, and a Kaseya Server.

This is a very reasonable and rational setup.

Clients will get this.

SBS by The Numbers

Had a great time in New Orleans. FYI: the city is kicking butt and taking names.

In addition to some excellent sessions, my favorite (and usually most productive) activity is personal conversations on the side.

Here are a few notes from a conversation with a member of the SBS team:

  • First, PSS / CSS Indian support for SBS sucks out loud. They know that.

  • Second, the sales numbers for SBS are HUGE. Tens of thousands of units per month. Hundreds of thousands of copies per year. Almost a million copies in circulation.

    That's interesting because it puts "the community" in perspective. How many copies of SBS 2003 have you sold? Ten thousand? One thousand? One hundred?

    I think my company has sold less than fifty copies in the last 3.5 years. We've touched or managed a total of probably 100 copies in that time.

    But 10,000 units? 20,000 units? 30,000 units? No, not us.

    We (and most likely you) are a spec on a pimple on the backside of a gnat when it comes to hard numbers of SBS licenses sold. There isn't a magnifying glass big enough to find my company's sales.

    And the community as a whole? Say 100 user groups, with an average of 25 members who do ten installs a year. That's 100 x 25 x 10 = 25,000 units. That's almost ONE MONTH's sales of SBS. That's 2.5% of the install base.

But when people go looking for help, who do they turn to?

Here's a simple test. Assume you're a Dentist who bought a piece of crap Dell server with a blazing celeron processor, 1GB RAM, and SBS preinstalled. Something chokes. You got some error. So you punch it into Google. "SBS error of any kind"

What do you get? In most cases, you get ten or twenty "community" hits for every result.

And once you start poking around, you're introduced to Marina and Vlad, Eriq and Susan, and the rest of the gang. You find out there are forums, newsgroups, and all kinds of blogs.

It looks, to the end user, as if the community is the real support for SBS. Those one million installed users might not know "the community" until something goes wrong. But when it does, the community is their first line of defense.

The community is a two-way communication tool for Microsoft. They use us to disseminate best practices, etc. And they listen to us as the educated, experienced users. Our opinion counts.

We're the vocal 2.5%. (It's a lot like being a Mac owner.)

Just a little perspective.

Friday, June 01, 2007

Product Development Lessons from an MVP

A few weeks ago, at SMB Nation East, I had a long chat with Dana Epp.

If you don't know Dana, check out or

The only background you really need to know about Dana is that he's successful. He has a great product, and it's not his first. Dana has started and sold a few companies.

My chat with Dana was very interesting because he kept mentioning something I rarely hear in the SMB space -- except from Robin Robins and Perry Marshall. What is that thing?

Test your ideas.

Test. Test Test. Test Test Test.


Dana didn't think this was as interesting as I did. He would casually mention that "While I was trying to define the product, I talked to a lot of potential customers."

Or "Once we had a prototype, I rolled it out to a handful of people."

Or "When we survey people to see which features they like . . .."

Get the picture?

Most SMB consultants don't get the picture. In fact, most of them resist the picture.

Listen at the next user group, SMB Nation, IT Pro conference, etc. Listen for how many people say

- My customers wouldn't like that.
- My client won't put up with it.
- I can't sell that.
- It won't work in my market.
- I tried that once.
- etc.

It is far more important for small businesses to test and talk to our clients than it is for larger companies.

The first time I ever read about the concept of flat-fee pricing for I.T. services was Harry Brelsford's 2003 book SMB Consulting Best Practices (page 5-41). My first reaction "There's no way my clients would go for that."

But by mid 2004 I'd heard and read about this concept several times. Finally sat through a lengthy seminar on the concept at SMB Nation (September) 2004. So I started asking my clients.

Here's what I found: The larger clients liked the idea, but didn't personally want to pursue it with ME. They did admit that it would be appealling as a way to structure a future relationship with another I.T. firm.

After I heard that a few times I realized that selling flat-fee services would be easier with "strangers" than existing clients. Today, when I look at my largest clients, five of the the top ten are managed services -- and only one of them was my client three years ago. Right now, 44% of our revenue comes from flat-fee "managed services."

Here's another case in point: Hardware as a Service. I announced the "idea" in my client newsletter a month ago this week. No details except that we were looking at one monthly price for hardware, software, and managed services.

Charlie, my customer service manager started calling around. He struck gold! We have one client on HaaS and two more eager to get going. We're trying to slow it down enough to make sure all the numbers are right.

The key to success was to ask questions, talk, ask questions, test pricing, ask questions, . . . and listen. In very short order our clients helped us figure out where they found value and what they're willing to pay.

I have an appointment with an accountant client who will sharpen his pencil and tell me why he's willing to pay a premium to have regular monthly payments. The result will be a complete draft of our marketing materials going forward.

Going forward, we're going to try to be more like Dana: ask and test, test and ask.

One of the lessons I learned from Robin Robins and Perry Marshall is to put out two different offers and see which one gets a better response: ask and test, test and ask.