Thursday, December 31, 2009

Goodbye and Good Riddance to 2009

Tomorrow - January 1, 2010 - will be a happy day for me. Not because of anything in particular except that it won't be 2009!

I am generally happy to own more than one company and to wake up every day picking and choosing what I want to do today. And for the most part that still holds true. But both businesses faced some real challenges this year, which makes it doubly tough some times.

Probably the best comment on the economy came from Motorola(1) Channel Chief Janet Schijns (see Motorola: Don't Blame the Economy.

    "Are you willing to make the claim that your business is only doing well because of the economy?


    Then you can't make the claim that your business is only doing poorly because of the economy!"

Bam! Right between the eyes. I'll always take the credit when my company kicks booty. So now that line is stuck in my head like a Weird Al Yankovic song and I can never blame the economy when it affects my business.

Realistically, here's where we went (up and down) in 2009.

We started down because we fired our largest client in late 2008. PITA x10. Not worth the effort. Then the stock market crashed and all of our clients took a collective deep breath. Which is to say, they stopped spending so they could figure out what's going on.

We laid off a technician in January, primarily because of the client we'd fired. Revenue climbed generally upward for the first half of the year. At some point we had replaced the lost revenue but not the technician. Thank you Zenith(2) and Autotask(3).

The best, hardest lesson we learned this year is that we need to be nimble and quick at cutting costs when revenues decline. Unfortunately, labor is the primary cost in our business. And that means I had to learn to lay off people I really like in order to keep my business in the black. This was very painful in July when our discretionary labor was 5% of what we had project it would be. Slashing people is very painful.

In the middle of the year our clients' pain was reflected in our primary revenue stream: Monthly managed services. As clients dropped a desktop here and a desktop there, their payments floated down a little each month. I think July was the bottom. After that they started adding a desktop here and a desktop there. Many are poised to do some hiring in January and we're already seeing action on that front.

So we've had a tough year. But we're ending the year solidly in black. Our EBITDA will probably be around 13% (which doesn't suck but also doesn't diminish the pain we went through).

On the Personal/Business side, my Brother Manuel is gradually moving to do high-end consulting on his own, so he's moving out of the daily operations at KPE. This is personally challenging to me because I have enjoyed working with him and having him to rely on for the last five years. He leaves a huge void that cannot be filled by a normal human being. We will literally need two or three people to replace him. I'm hoping we have the first one on board now.

I will miss him personally and professionally. Next Summer he's moving to Florida.

On the totally personal side, my family has had a very rough year. The details are no one's business, but suffice it to say that I learned the very hard lesson that you can't make other people no matter what you do. Everyone has to be personally responsible for how they react to the world around them. Anyway, my wife and I have been together for 21 years but probably won't make our next anniversary in March. [Insert misc. painful experiences here.]

On the bright side, my daughter Victoria is 17.67 years old. She is the absolute light of my life and apple of my eye. We have always been close and have grown closer since my wife moved out. I will be extremely sad when Victoria goes off to college in Fall of 2010, but we have a great buncha months ahead of us. And to be honest I am very proud of the fact that she is a strong and independent woman. She'll do great at college and love the freedom as well as the intellectual challenge.

Moving Up; Looking Ahead

I have been accused by friends(4) of being too optimistic. But I gotta tell you, 2010 will kick butt around here. KPEnterprises has a written goal of doubling our top-line revenue in the next 12 months. If the last week is any indication, we'll do just fine. We have campaigns outlined and I'm hoping to pull off a marketing stunt that has never been done before in the I.T. consulting space by any partner of any size.

Of course I'll write that up for you and sell it online at SMB Books. :-)

KPE will have a huge focus on Cloud Services. If the Zenith Smart Style on-premise cloud offering is as great as it looks, we plan to sell the heck out of it.(5)

GLB is launching a whole new venture with a very special partner. Please join me January 6th to find out more about that. Register for my "State of the Nation" address

GLB will focus more on Cloud Services as well. Of course we won't abandon the things we've done before. But GLB now has a staff of five people (mostly part timers) and we can take on some pretty cool things. So we're looking forward to a great new year.

After a couple years of building, GLB is poised to do some awesome things. We have decent revenue at this point but very low profit. But I believe we now have the base to begin moving up.

As for my personal activity, I am hoping to finish one book being co-authored with a new author on an amazing topic that's totally fresh to our space. Stay tuned. I won't let you miss that. And then I am hoping to release two other books on my own in 2010. If my staff can take care of business and leave me alone, I might just get another one out that's been on the back burner for a couple of years.

Doing What I Love

Of all the things I do in all my roles, the most fun I have is when I'm:

- Spending time with my daughter

- Traveling and meeting people (Conferences definitely count. The way I do conferences, they're not work.)

- Writing

In 2010 I'm going to balance these things and I plan to love doing it. If I can make the travel profitable (not just break-even), then I'll do more of it. I'm hoping my daughter and I can make our way to the U.K. in the Spring and I'm hoping I can make that long-overdue trip to Australia in the Fall.

Yeah, 2009 sucked a lot. And 2010 will be a huge amount of work for me. But I'm going to totally grab the bull by the horns and wrestle 2010 to the ground. I'll make it a great year! You just wait and see.

- - - - -

(1) The FTC Guidelines are stupid. I have not been paid by Motorola to say anything about anything. I haven't received free gifts or anything else from Motorola. This is not an endorsement of anything. I don't even know what product Motorola was pimping at the Comptia show. Did I mention that the FTC Guidelines are stupid?

(2) The FTC Guidelines are stupid. KPEnterprises has a complicated relationship with Zenith. We have received free service from them. We do not officially endorse their product, but we love it and are happy to tell everyone about it. To my knowledge I have never uttered any misleading or false statements about Zenith Infotech. Great Little Book has received advertising dollars from Zenith Infotech for print and online advertisements. GLB has also offered free advertising space to Zenith because we have a great relationship with them. GLB does not officially endorse Zenith but I personally own both KPE and GLB so I'm completely aware of the relationship. To my knowledge these facts have been disclosed openly and the FTC Guidelines are stupid.

(3) The FTC Guidelines are stupid. KPEnterprises uses Autotask. We have not received anything from them for free (as far as I know). We did receive setup fee discounts when we switched over to Autotask, but I don't think these were different than would be offered to anyone switching from another PSA system. I am not paid to endorse Autotask or any other product. I do not endorse Autotask or any other product. I love ConnectWise but we don't currently use it. I love Autotask and we do currently use it. Great Little Book has received advertising dollars from Autotask for print and online advertisements. GLB has also offered free advertising space to Autotask because we have a great relationship with them. GLB does not officially endorse Autotask but I personally own both KPE and GLB so I'm completely aware of the relationship. If anyone actually reads my blog they know all this and the FTC Guidelines are stupid.

(4) The FTC Guidelines are stupid. These friends are intimately tied to the SMB and MSP communities and if I named them by name I'd have to disclose baby gifts, Christmas gifts, book deals, co-marketing campaigns, beer Visas, advertising dollars, and a spider web of interrelated pimping activities worthy of a large purple hat. So I ain't sayin' nothin. The FTC sucks. Just my opinion. No one paid me to say that.

(5) The FTC Guidelines are stupid. See #2 above. Blah blah blah. May contain trans fats.


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  1. Susan here.

    I think we hugged a few times at various conferences.

    You forgot to disclose that.

  2. I think disclosure is important. I've always questioned, in my mind, if you would still be such big fans of Zenith, Robin Robbins and Autotask (over Connectwise) if there wasn't some type of compensation that the average guy doesn't get.

  3. You've certainly had an interesting year!

    Sorry to hear about your breakup...I can say from an informed viewpoint you should treat it as a new beginning

    Thanks for all you've given in 2009.From my point of view the Zero Downtime Migration book was a great highlight for GLB!

    Happy New Year and we'd love to see you in the UK in 2010!

  4. I think most people will be happy to see the back of 2009 each for their own reasons, some of which are more significant that others.

    Sorry to hear that you have had a tough year personally. What I found helped me most was to maintain perspective on where I am and where I'm going.

    You have brought so much to the community and for me personally that a simple thank you cannot say enough but for now that will have to do. If you do make it to the UK this year, let me know as it would be great to meet up.

    In the mean time I hope the New Year brings you better times.

    Happy new year!

  5. I'm in deep trouble Susan. Will trade hugs for technical know-how. Just don't tell the FTC.

    KK: Stay tuned for a few posts on my full disclosure. I do have to say that regular readers will have no surprises.

    Others (here and on Facebook): thanks for the support. Sometimes you create change and sometimes it happens to you.

    My favorite quote of the year is from Virginia Satir:
    "Life is not the way it's supposed to be. It's the way it is. The way you cope with it is what makes the difference."

  6. Anonymous11:48 AM

    Karl, always great reading your blog, and your wisdom has improved my business immeasureably. Wishing you the best in 2010!

    Note to FTC: I was not compensated in any way. Other than buying stuff from ( they'll be after me), I have no business relationship with Karl.

  7. Your 2009 sucked big time. Your optimistic attitude and faith will carry you through.

    Last year you wrote a blog about weeding out bad clients. You inspired me to look at my clients and I dumped three PITAs. That was the hardest thing I had to do in 2009 but it was well worth it because they suck the life force out of you. I admire your decision to dump your BIGGEST client.

    I'm sorry to hear about your troubles with your wife. I pray that you both find the strength work to get over your hurdles.

    2010 has to be a better year since 2009 was so bad.

    Your fellow optimist ...


  8. Never lose that optimism that has made you such a valued peer and friend in this community. 2009 has certainly been tough for you but hopefully you have a few markers from the past year that you can smile upon... even if just for a while.

    A toast to you for every success in 2010.

  9. If anyone has ever been honest and open with the community, it has to be you Karl. I'm sure most would agree with my thoughts, but your words of wisdom and ability to foster philosophical discussions in the channel are much appreciated.

    I am very sorry to hear about your personal challenges in 2009, but sincerely hope 2010 sees you through the rough times. Keep your focus on your daughter, but know you have a family way beyond Sacramento you can depend on anytime. Thanks for your friendship and all that you do!

  10. Thanks all. I do love the SMB Community and I appreciate all the support.

    As for optimism, I believe every person has a natural level of optimism and happiness that they settle into over time. And while events can knock you off that level (up or down), you settle back to your level over time.

    I am blessed to have a naturally high level of optimism. So if I whine and complain just buy me a beer and give it some time.

    And have a great New Year!

  11. Karl, I don't care what anyone says... you ARE the man!

    Thanks for being you, and everything that you've shared with all of us. It's clear from your blog that 2010 is going to be a great year for you... both professionally AND personally.


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