Friday, May 30, 2025

The Hiring Formula for Early Growth

The Hiring Formula for Early Growth

- Lessons Learned, Episode 30

In earlier episodes, I talked about my first and second attempts to hire employees (See Episodes 21 and 25 here). 


So, I'd gradually converted some part-time employees into full-timers. And as we added more clients and started doing more regular scheduled maintenance, we needed to develop ongoing processes for hiring. When you're super-small I don't believe that you should always be hiring (or pretend to be hiring). 

But you should have a process that works, and that gets better each time it's used.

Two important factors drove the development of my hiring. First, I wanted people who would learn *MY* processes and procedures. Second, I wanted people who were not mentally or physically lazy. In other words, they needed to be ready, willing, and able to work.

Focusing on those two things allowed us to avoid people who had no attention to detail, worked to avoid work, were burned out on the industry, and wanted to be overpaid for doing less than everyone else. Sadly, the job market in IT tends to attract (or create) people with very bad habits.

Here are two tactics that worked really well to find the right employees (both technicians and administrative assistants): Internships and local Craigslist ads.


Internships

Our foray into internships started with the local community college and move to local tech schools. For a while, I was on the advisory board for a local tech school. So that gave me easy access to internship postings.

We always paid for internships. It wasn't a lot. By today's standard, we would probably pay $20/hour. That gives a college student or tech student some spending money and helps build some loyalty. We always found good people. 

One person who stands out is a web developer who eventually helped us sell about $500,000 in programming over three years. Of course, he moved from intern to fulltime and much better paid in that time. He was also a great guy, easy to get along with, and very good. We would not have found him if we just put an ad out.

Another stand-out is a design student who created several graphics for us. She designed some posters I had made for our office. And she designed a book cover that won a design away. Although the award went to my book company, I gave her the plaque to take home because her name was right there on the cover as the designer.

Internships allow us to tap into young talent. In my brain, young people have more new ideas and less burnout. And, in many cases, they have access to and experience in some newer technology. Best of all, they are willing to learn. If I have to choose between someone who graduated sixth grad and swore to never read a book again, and someone who went to a tech school to learn career skills, I'll take the tech student every time.

To get interns, we wrote up a simple job spec and posted it with local tech schools and community colleges. They all have job centers. And they all take offers like this via email or a web site. Some of them are working on a formal internship from the school, but most don't care about that and are just willing to take an entry-level job so they can build their resume and skills.

In the "buy vs. build" world of IT support, I'd rather build a consultant that does things our way than to buy one with bad habits who has to be un-trained and re-trained.


Craigslist

I've blogged a lot about our success with CL ads. Search for "Craigslist" on this blog. Or just start with this one and follow the links: https://blog.smallbizthoughts.com/2017/08/hiring-good-administrative-assistant.html

One of the biggest problems with a very small company looking to hire someone is the overwhelm of the job search process. If you put out an ad, you'll likely get hundreds of responses, MOST of which are irrelevant. Job counselors give horrible advice, like, "Apply everywhere to any job that might just be related."

This results in applicants that are completely unqualified, or don't even want this job. They just hope someone, somewhere talks to them. And then, I guess, that person will know someone who actually needs them.

I have to admit, I don't actually understand why they do it. But I got resumes from SQL programmers for entry level IT infrastructure jobs. And people demanding $75,000 (ten years ago) for a level 1 tech position. And thousands of other examples.

So we settled on a process that allows people to filter themselves. Our ad says DO NOT send a resume or your email will be deleted. Instead, write one paragraph telling me why I should ask for your resume. You would be amazed at how quickly people eliminate themselves. The tiniest bit of effort will remove 100 people from a potential of 125 applicants.

Next, we required that they have at least one Microsoft certification. I don't care what it was. But we wanted to see their MS transcript and verify that it was legit. You can argue all day about certifications being irrelevant. But there is a difference between people who can pass one of those exams and one who can't. 

We also had a long hiring process, but that's another story for another day.

In general, our internships and Craigslist self-screening process did a great job of helping us find a really good mix of people and build an awesome team. And even today, when I hire about one person every two years, I do the exact same thing.

Feedback Welcome.

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All comments welcome.

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Episode 30 

This Episode is part of the ongoing Lessons Learned series. For all the information, and an index of Lessons Learned episodes, go to the Lessons Learned Page

Leave comments and questions below. And join me next week, right here.

Subscribe to the blog so you don't miss a thing.

:-)


Thursday, May 29, 2025

Webinar and Q&A: What Every MSP Needs to Know About Growth and Balance

 Please join Bill Black and me for a Relax Focus Succeed webinar - 

What Every MSP Leader Needs to Know About Growth and Balance



Wednesday, June 4th

9:00 AM Pacific / Noon Eastern


Running an MSP shouldn’t mean sacrificing your family time, your health, or your sanity. But if you’re like most MSP leaders, you’re stuck in firefighting mode constantly reacting, juggling tickets, managing people, and wondering when it all gets easier. 

In this free LIVE webinar, FocusPlanit brings you a special session with MSP legend and author Karl Palachuk to show you how to shift from chaos to clarity using the principles behind his book, Relax Focus Succeed.


What Every MSP Leader Needs to Know About Growth and Balance

  • Why most MSP leaders stay stuck in stress loops and how to break free
  • The difference between reacting and leading (and how to make the switch)
  • How to build better routines, reduce interruptions, and focus on what moves the business
  • A proven framework to lead with intention and growth

If you’ve been telling yourself you’ll slow down when things “settle” this is your moment to take back control, before burnout makes the decision for you.

Join us for this live webinar and walk away with tools to help you lead smarter, scale sustainably, and get your life back.

Save Your Seat Here:


:-)

Friday, May 23, 2025

Cloud Services in a Month - Class Starts May 27th

Cloud Services in a Month - Applying the Book

Build a great bundle and build amazing recurring revenue with high profit.


Newly Revised Course

- Five Tuesdays: May 27 - June 24

-- Register Now

- All classes start a 9:00 AM Pacific


Objectives

  • Create great cloud bundles
  • Create a money-making network assessment offering
  • Pricing strategies for the 2020’s
  • Design an excellent migration process
  • Managing cloud clients successfully


Based on the best-selling book Cloud Services in a Month, this course will give you the information, forms, processes, and motivation to move full force into providing Cloud Services. Much of the focus is on designing and developing a package of services you can sell to every single client. As Karl describes it: The core technologies that every client needs.

Tuition for this course includes the ebook version of Cloud Services in a Month. That includes all the downloads from the book as well.

You will learn

  • Everyone's a Cloud Service Provider
  • Tip Toe Into the Clouds?
  • The Latest Tools and Options
  • Cloud Computing in the Small Business Space
  • Right Sizing Your Offering
  • What is the Cloud?
  • Assessing Client Networks
  • Money-Making Homework - Network Assessments
  • Create a Cloud Service Offering
  • Sneak Peek: The Cloud Service Five-Pack
  • The Absolute Basics
  • Plan Changes and Updates
  • Transactions, Customers, and Clients
  • Price Strategies
  • Managed Services and Cloud Services
  • Building a Bundle that Works
  • Break/Fix and Hybrid Models
  • Create A Three-Tiered Pricing Structure
  • Migrating to the Cloud
  • One Service at a Time
  • Managed Service Tools and the Cloud
  • Storage Migration
  • Email Migration
  • Microsoft Office
  • Money-Making Homework - Migration Plans
  • Backups, DR, and Continuity
  • Basic Backups
  • BDRs
  • Business Continuity
  • Running Your New CSP Business
  • The Right Tools for the Job
  • Your Standard Offerings (Your Catalog of Services)
  • Staff Requirements for Cloud Services
  • Client Onboarding

... And More!

This class is filled with great advice and tips on running your IT company and building great cloud bundles, priced to create amazing recurring revenue.

Delivered by Karl W. Palachuk, blogger and author of the very popular "SOP Friday" posts at http://blog.smallbizthoughts.com.

Includes five weeks of webinars with related handouts, assignments, and "office hours" with the instructor. All classes are recorded for download.

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

Only $399


Class Content:

Unit 1 Setting the Stage for Cloud Services in Small Business

Unit 2 Introducing the Cloud Five-Pack Formula

Unit 3 Implementation, Sales, and Variations

Unit 4 Cloud Migration Strategies and Procedures

Unit 5 Maintaining, Evolving, and Integrating Cloud Services Over Time

:-)


Managing Distributor Relationships

- Lessons Learned, Episode 29

One of the things I hadn't really thought about when I started by first IT business was sourcing products. I thought I was in a service business. But very quickly I found that clients expected me to know where to get hard drives, cables, monitors, and even whole computers. 


I started with local suppliers who were willing to open "wholesale" accounts with other businesses. And that led me to getting an actual reseller permit (which, in California, is call a seller's permit). And that, of course, led me down the road of collecting sales tax and filing sales tax reports.

The big problem with buying "wholesale" from companies who sold to the public is that there was almost no margin for me. After all, they were buying at wholesale from a distributor and still needed to make something in the deal. So while they might pay six dollars for a ten dollar cable, they had to sell it to me for eight to make a little money. 

That's fine with a cable here and a cable there. But when it comes to a whole desktop setup with all the accessories, I need to make a real margin. 

I asked some friends and former clients how they sourced materials. The primary source I started with was a company that primarily worked in the point of sale business. I applied to them and opened an account. That was fine, but gave me limited options. 

But it got me started. From there, I found out about different suppliers/distributors and opened accounts with several. At one point, I had accounts with for major distributors. Two of them are what I would call my "primary" distributors. I had two primary distributors because I knew there would be times when I need to have credit at both.

That turned out to be a good thing for two major reasons. First, I could shop them both and find the best options and prices. And, second, when I had a dispute with one, I could simply rely on the other. I had two incidents when this was very useful.

In the first incident, I had a dispute about not getting the preferred price that was promoted on the web site. The salesman on my account simply would not give me the preferred price because it reduced his commission. I complained up and down the layers of management, but they all agreed to back the sales team instead of me (the customer). So I simply stopped buying from them.

After about three months, I got a call from the distributor asking whether we'd gone out of business or what was going on. I told him all about my problem and sent copies of letters I'd exchanged with about a dozen people in the company. I explained that I would not do business with them if I can't rely on the price offered to me on the web site.

It took about a month, but they sent me a check for the disputed amount and I gradually added them back into the mix. And I moved to being "unmanaged" rather than giving ongoing commissions to the dude who used to be my sales rep.

In the other incident (with the other primary distributor), we had ordered three servers and only one showed up. But the distributor charged our account for all three. I filed a complaint - and asked for my other two servers. They said no: we had signed for three servers.

I went through this with my staff and was told absolutely that there was only one server delivered. And the paperwork said that one "unit" had been delivered. So I told the distributor that the paperwork shows we got one box and signed for one box. They said to pay the bill.

We did not pay the bill. We ordered the missing servers from our other distributor. And then we gave the other distributor all of our business. 

Again, after about three months, my rep called and asked what was going on. I explained the situation. He kicked the problem up to his manager, the and manager took it seriously. At this point, we were arguing over about $14,000 for the two servers, plus $7,000 for the bill I hadn't paid, plus roughly $50,000 per month in sales they were missing out on.

After a few weeks, the manager called me and said that they had reviewed the security footage at the loading dock and that the three servers left on a single pallet. We signed for one unit, which they took to be a pallet with three servers. I explained that only one server arrived - no pallet.

He they filed a complaint with the shipping company and they checked their video. They reported that one server left their dock headed to my office (without a pallet). We signed for it. And that was the one unit delivered.

In other words, three pallets were picked up by the shipping company, but only one was delivered to me. The distributor filed a claim with the shipper, and credited us for two servers. And we paid for the one server and started doing business with them once again.

Luckily, these were two big, expensive incidents in twenty-five years. With millions of dollars worth of transactions, a few thousands dollars worth of disputes is probably the best you can hope for. 

Lessons learned: 

1. Unfortunately, the first lesson I learned is that distributors are completed committed to backing their sales people at the expense of customers. I could tell a hundred stories of much smaller incidents that illustrate this point. But the bottom line - literally - is that sales people do whatever it takes to make commission and their managers do whatever it takes to keep them pushing products. Making the reseller happen is an after thought.

2. If you have one distributor, you have zero leverage. You have no basis for getting better service or a better price unless you are able to take your business elsewhere. And you have to have that relationship in place for the day it becomes useful.


As a rule, we used one distributed more frequently for computers and servers, but we tried to divide our overall spending between the two. This might (arguably) have reduced our discounts at some point. But the flexibility of taking our business away from someone for months at a time gave us leverage that would not otherwise have.

I'd love to hear your experiences with managing distributors.

-- -- -- 

Note: In a future installment, I'll address margins and our hard, fast rule about maintaining them.

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All comments welcome.

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Episode 29

This Episode is part of the ongoing Lessons Learned series. For all the information, and an index of Lessons Learned episodes, go to the Lessons Learned Page. https://blog.smallbizthoughts.com/p/lessons-learned-blog-series.html

Leave comments and questions below. And join me next week, right here.

Subscribe to the blog so you don't miss a thing.

:-)


Tuesday, May 20, 2025

Ask Me Anything - IT (Honestly Good Information)

Join me for a Great New - and Fun - Livestream:


Ask Me Anything - IT

(Honestly Good Information)


Everyone welcome!


Join me

June 10th

11 AM Pacific / 2 PM Eastern


This will be a live event with a great new format (at least I haven't seen the format before). Here's how it works:


Topic: The Nitty Gritty Details for Selling Your Business - and the Financial Details of What Happens Next


We'll go live on the livestream at 11:05 AM (Pacific). So you can finish your previous meeting, run down the hall, grab a fresh cup of coffee and not miss a thing.


Special Guest #1 is James Kernan. He will answer all your questions about M&A and selling your business. For about fifteen minutes. That's quick, so be prepared, send me your questions, and use the chat to ask follow-up questions.

Special Guest #2 is Rayanne Buchianico. Rayanne is a long-time MSP and an accountant and enrolled agent. She is uniquely qualified to talk about the money side of a business sale, and the tax consequences in particular. She'll also have fifteen minutes.


We will also have the two guests "on stage" at the same time for fifteen minutes. So, again, bring your great questions and get two perspectives from two of the major thought leaders in our industry.


Our plan is to finish at 11:55 AM and give you five minutes to get ready for the next meeting - which probably starts at the top of the hour. 



To Do Now:


Register for the Zoom session so you'll get reminders and have easy access to the live event on June 10th. It will be livestreamed on YouTube, but the best way to get us questions is via Zoom.


Zoom registration:

https://us02web.zoom.us/webinar/register/WN_Bo7sl9lrQYmw2o-FoIjzQQ


Q: Will is be recorded?

A: Yes, but you obviously won't have the opportunity to ask questions if you're not there live.


Other questions? Drop them below.


Full details at https://mspwebinar.com.


:-)


Friday, May 09, 2025

We Need an Office

We Need an Office

- Lessons Learned, Episode 28



I need to preface this post with an important point: As a rule, you should delay getting an office outside the home for as long as possible. Most IT consultants will never need one for business reasons ever. I say "for business reasons" because you may need one simply to get work done without distractions.

Having said that, when you need an office, you need an office. In our case, we had grown to having one fulltime and on part-time tech, a part-time administrative assistant, and myself. Meeting at my home office was not ever part of the plan. The techs and I often met at a coffee shop and planned our day from there. 

But it was obvious that we needed a place for equipment and supplies to live, and that I need to move paperwork-related things to an area we all had access to.

Luckily, I was started what would become the local IT consultant's group, so I knew people. A friend ran a programming business. They had an office that was barely used, and it had a conference room. It was actually the perfect example of what we *didn't* need: It was nice and pricey, and had amenities we didn't need.

But they had a spare office with a locking door within their office space. So I rented that. It was a few hundred dollars a month with no internet or phone lines included. That's okay. We could set up a network as needed, and we'd already figured out how to get by with cell phones and an automated attendant.

We had that space for less than a year when we grew to the point that we needed a real office of our own. The one settled on was exactly what we did need: It was warehousey, off the beaten path, with four walls and pretty much nothing else. 

It did have a small lockable office. I gave that to the admin, and promoted her to office manager. A locked file cabinet in that locked room held personnel files, client contracts, and whatever else we had that needed to be under lock and key. 

Eventually, we'd add a locking storage closet that we built and the landlord puttied and painted. And we built a small server room in the back with a through-the-wall air conditioner and a bunch of dedicated 30-amp circuits. We'll return to this room in a future post.

The new office was very large and very open. As I was getting into the book publishing business, we used book shelves to create a "wall" separating that business from the tech business. About 200 square feet was dedicated to Great Little Book. About 1,000 was for KPEnterprises (my IT company).

One of our clients offered us some office dividers if we hauled them away, so we happily did that. These created our tech bullpen with great long bench and desks for several technicians. My desk was shared with a large table we got somewhere. I just had a space near the front of our warehouse-like office. The

All in all, it was a very comfy, usable space. No two chairs or desks matched. But they all worked fine. Eventually, we did buy good ergonomic chairs for everyone.

The rent was cheap and the landlord loved us. We had that office for more than eight years. I think the rent was $1,100/month when we moved out. It took up about 1/3 of the first floor of a two-story building. The second story was all artist studios and one photographer.

Much of the history of my first IT company is tied to that building and that office. Today, it's owned by a cider mill, run by the guy who had a first-floor space on the opposite end of the building from us, back in the day.

Over the years, we've only had a few offices. We definitely needed an office when we were growing like crazy. We even considered finding additional space, at one point. But people and circumstances lead us in another direction. That's a story for another day.

Would I Change Anything?

I started by saying that you should delay getting an office for as long as possible. I still think that's true for most people. It just makes sense financially. It was the right decision for us.

If I could roll back the clock, I would do exactly what we did. Our office was never intended for clients to visit. We sat around the big table a lot, but no client ever did. I think we had one client visit one time ever. Our business model was based on going to their business, not having them come to ours.

By any measure, this office was inexpensive. If there's one thing I'd change, it would be this: I would have *kept* that office when I sold the business, and rented part of it to my old company. Instead, Mike moved us to a much smaller office for a little less money. Oh well.

Our office was definitely humble and not a marble showcase. And it definitely got the job done.

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All comments welcome.

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Episode 28

This Episode is part of the ongoing Lessons Learned series. For all the information, and an index of Lessons Learned episodes, go to the Lessons Learned Page. https://blog.smallbizthoughts.com/p/lessons-learned-blog-series.html

Leave comments and questions below. And join me next week, right here.

Subscribe to the blog so you don't miss a thing.

:-)


Thursday, May 08, 2025

Updated for Members: The Roadmap on Client Roadmaps

Over at the Small Biz Thoughts Technology Community, we have thousands of resources - and we know that means you might get lost or overwhelmed. So, we've created "Roadmaps" to help you get started on specific topics. Members can find all of our roadmaps by simply going to https://www.smallbizthoughts.org/resource-library/roadmap/ (log in first).


Our most popular roadmaps are:

  • The Service Department Roadmap
  • The Service Manager Roadmap
  • The Hiring and Employee Onboarding Roadmap
  • The Marketing Roadmap

Each of these is a "place to start" with a given topic. It's a place where we can bring together a book chapter, an audio program, a mini-class, some checklists, etc. Each roadmap contains some great resources that will get you headed in the right direction.

Of course, each also links out to related products, whole books, longer training, and so forth.


Yesterday, we posted the one-hour training on Client Engagement in an Uncertain Economy. Of course it's posted as stand-alone content for members, but we've also added it to the Roadmap on Client Roadmaps. 

We've bundled up the webinar along with questionnaires, checklists, and other training options. Members can view the webinar in our on-screen viewer, which works across all your devices - and remembers where you left off when you bounce from one device to another. Check it out today.

As always: Download those resources and customize them for YOUR business. 

Nothing happens by itself.



Members: Check it out today.

Non-members: Now's a great time to join. Memberships start at only $799.

:-)


Thursday, May 01, 2025

Karl Takes a Vacation

Karl Takes a Vacation - 

- Lessons Learned, Episode 27


I was in business for about five years when I took my first real vacation. I'd taken plenty of time "off" before, but this was to be a disconnected vacation.


At the time, I had one part-time employee, Jim. He knew all my clients, and they knew him. He was not always sure about how to solve problems, and he relied on me a great deal. It was the perfect situation in which many business owners would simply say, "I can't take a vacation; the business can't run without me."

But I was willing to give it a try for three reasons:

1) We had a great system. We had rock-solid processes, which were documented. And, therefore, I had great confidence that I could be gone for fourteen days without a true emergency.

2) I had more confidence in Jim than he had in himself. He was talented. He was experienced. And even though he relied on me a great deal, some of that had to do with self-confidence rather than lack of troubleshooting skills.

3) Although I was mostly out of touch, I was also in a nearby national forest, so I could scamper down the hill and be at a client's office the same day. And I would be in phone range within an hour.

This was back when cell phones were quite reliable in cities, but were unusable in truly rural areas. (I actually wish were still the case, for the most part.)

And while I learned that our processes were as good as I suspected, and that Jim was as good as I suspected, I also learned another important lesson on that trip.

We were staying in a cabin on Lake Tahoe, inside a national park. The cabin had electricity and running water, but no stove or cooking facilities. There was no heat as these cabins are regularly buried in snow during the winter, so people only stay there in the non-frozen months.

Once a day, normally after dinner, I walked up to the public road from our camp and used a public phone to check my voicemail. I got a report from Jim every day. And almost message was upbeat and positive. But there were also several frustrated messages explaining a problem, describing what he'd tried, and asking for help. And the very next message said that he had tried one more thing, researched something, or just plain figured it out.

In other words, even when very frustrated, he learned that he could figure things out. I stored this little bit of knowledge to help me manage future technicians. Sometimes, people have to stop asking for help ALL the time and just take a deep breath, then go at it again.

I failed to mention one other piece of advice I had given Jim before I left:

You don't need to get help from me alone. Feel free to contact Microsoft, Intel, HP, and even one of our competitors in the local IT user group. You have lots of resources we've built over the years as relationships. Manufacturers and distributors have warranties and guarantees. We're a Microsoft partner. You're not alone.

You're never alone in this job.

In the end, I never had to drive down the mountain. We never cut our vacation short. And for the next three summers, we went back to that same camp. And I checked my voicemail less and less each time.

It's true that people who start IT consulting businesses tend to be the most technically knowledgeable, and they are more familiar with the clients' systems. But it's NOT true that your team can't get along without you.

You can - and you MUST - take vacations. You need to recharge your batteries. You also need to spend time with your family. Nothing happens by itself. That includes growing your technicians' independence and building a sustainable business that you can run for decades without having a hear attack.

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All comments welcome.

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Episode 27

This Episode is part of the ongoing Lessons Learned series. For all the information, and an index of Lessons Learned episodes, go to the Lessons Learned Page. https://blog.smallbizthoughts.com/p/lessons-learned-blog-series.html

Leave comments and questions below. And join me next week, right here.

Subscribe to the blog so you don't miss a thing.

:-)