In this week’s episode
- Find out how MSPs are starting to make small changes to their business, but larger changes in their marketing, to be front-of-mind in a future where cyber security comes first
- This week’s big interview is with business acquisition expert Jonathan Jay. Find out how it’s possible to grow your business via acquisition but without the off-putting costs
- Also this week, Paul asks if now is the right time to out-source more of the ‘hassle’ work, plus there’s a great question from listener Olly about how to find time to improve a business
- Out every Tuesday on your favourite podcast platform
- Presented by Paul Green, an MSP marketing expert
- Paul talked about outsourcing specialists, including Continuum and Inbay
- Find out more about Paul’s blatant plug for MSP Easy Tools
- Paul’s guest on the show talking about how to grow through acquisition is Jonathan Jay from The Dealmaker’s Academy
- Check out some of the books from the brilliant aforementioned Stephen Covey
- The question about how to find time to work on the business came from Olly Denhard from IT Trouble Free
- Our guest on the next show on 28th January to talk about how to become even better at sales is James Newell from Clear Sales Message
- Please send any questions, ideally in audio-form (or any other feedback) to firstname.lastname@example.org
- Here’s a link to Paul’s Facebook group for MSP Marketing
Voiceover: Made in the UK for MSPs around the world. This is Paul Green’s MSP Marketing podcast.
Paul Green: Hello. Here’s what’s coming up in this week’s show.
Jonathan Jay: As soon as you realise that the amount of money that you have in your bank account is not going to influence your ability to make an acquisition, you realise that yes, you can grow via acquisition.
Paul Green: We’re also going to look at whether you should be outsourcing more from your business. Certainly something as simple as your NOC and we’re going to answer a question from an MSP on how to get more stuff done.
Voiceover: Paul Green’s MSP Marketing podcast.
Paul Green: If you look at the evolution of IT support over the last 10, 20 years or so, it’s very clear for us now to look back and see that break/fix, which is still a business model used by many people, but break/fix was not a great business model because you’re inherently sitting, waiting for work to come in. And I know there are many pure break/fix operators that are very, very busy. But it’s still a very haphazard way of running a business, isn’t it? It’s the reason I’d never want to own a shop, any kind of retail shop, because you’re just sitting there waiting for people to come in and you don’t know whether or not you’ve sold anything. Now compared to the monthly recurring revenue model of an MSP, break/fix absolutely is a different world. And it’s no surprise to me, you look back 10, 15 years when the vast majority of IT support was done on a break/fix basis and there were just a few people operating this managed services model.
Paul Green: It’s no surprise to me now that many people, I would say a majority, are running managed services because it just makes life easier. Let’s be honest, how many of us now lie awake at four in the morning and worry about how are we going to meet payroll when we know the money’s coming in because of all the contracts, because of all the direct debits or the card payments or however you take your monthly recurring revenue. If you just look at how the world has changed over the last 10 years, we’ve gone generally, typically over to a more subscription business model. Netflix, TV, mobile phones, all sorts of things, it’s now all done on a subscription basis and this certainly makes for running an easier business. Well, Office 365 is another great example of that. Microsoft have created an amazing subscription business out of what was once before a case of having to sell stuff all the time. Now the money just rolls in for Microsoft and it makes it a more robust and a safer business.
Paul Green: So that’s where we are today. I think it’s very clear if you look forward the next five to 10 years, what the next iteration of IT support is going to be. We’ve gone from break/fix over to managed services. I think the next thing is going to be cybersecurity first. And I already have two or three clients that have not quite pivoted, but have just shifted their marketing a little bit so that rather than competing with all the other MSPs out there, they are taking very much a cybersecurity first stance. So they’re talking to people right from the get go about their cybersecurity, about their email, about protecting their data. And of course as part of that, when they do the projects and then take them on board, they’re delivering managed services to them.
Paul Green: So, the actual delivery hasn’t changed dramatically, but their marketing has and they’re very much going in cybersecurity first. And I think you can look forward and say that most of today’s MSPs are going to end up as MSSPs eventually. You could very much argue that’s where it’s going to go. It’s just a case of how long is it going to take to go there. And actually, if you look at the trends of technology, hardware, software, most people don’t try and repair a lot of hardware these days because it’s too difficult to repair. It’s pretty much unrepairable, some of it. It’s just easier to get another unit in. Well that’s not how it was 10 years ago. Going forward, that’s going to get worse. You know there’s going to be less and less hardware to fix. You could look at software and say, “Well, there’s a lot of software around, there’s a lot of services that need to be tweaked and configurations. And it’s not perfect yet. It won’t be perfect for a long time.” And I’m not a tech and even I can see that it’s going to need humans in there. But eventually that software is going to be smarter. It’s going to just work better. It will fix itself. I think that’s where it’s going to come.
Paul Green: There comes a point where they’re not going to need you so much for the hardware and we’re already at that point really, they’re not going to need you so much for the software, but they are going to need someone somewhere who’s going to look after their cybersecurity. Because we all know that breaches and hacks are getting worse and worse and worse and that just creates an opportunity.
Paul Green: So, the reason I’m talking about this today is even though I think this is years off, when everyone will have to shift over to an MSSP model, I think this is the point to start thinking about this and saying, “Right, as we’re planning out the next three to five years, what kind of extra qualifications do we need? What kind of capabilities do we need to add into the business? What kind of people do we need to hire? What kind of products do we need to be reselling? Are we reselling a robust enough solution for this, for this, for this? Are we reselling a training solution?” If this is what more people want and okay, it’s only the early adopters that really want it at this stage, but if this is what people want, what’s the reputation that we can be building up right now to make us a really robust MSSP in three, five, seven, 10 years time? And I think the businesses that really embrace this, the MSPs that really embrace this right now, are the ones that are most likely to pick up some good market share on this in the time ahead.
Paul Green: So, this is a great time, especially this time of year as you’re starting to plan out what you want to achieve over the next 12 months. Looking at your security offerings and how you can improve those and how you can improve your marketing to position yourselves as cybersecurity experts. That would be a great use of your time.
Voiceover: Here’s this week’s clever idea.
Paul Green: So, one of my goals for this year is I want to acquire one or two businesses. Now I’m not interested in being the operator of these businesses. As I said back in the podcast back in November, I’m interested in being the owner, not the operator. I don’t want to be running it every day. I just want to be helping a management team to excel and financially benefiting from that. So, I won’t acquire marketing or sales businesses because I know about that. I certainly won’t acquire an MSP business because that’s just too much of a clash with the work I’m doing here and I’m enjoying this work. I want to keep doing this for another 10 years.
Paul Green: So, I’m looking outside, I’m looking at all sorts of businesses. Currently looking at the care sector, adult care, either in the home or people going to live in care homes because I think it’s an interesting market with a lot of opportunities. And as I’m looking at all these different businesses, I’m constantly looking at how can I improve this? So how can I reduce some costs within the business? But at the same time, how can I make it a better experience for the customer, a better experience for the staff? Because if I can reduce the cost of delivery and I can make it a better delivery, make it a better experience, and from a marketing point of view, differentiate myself from my competitors. Well whatever I buy I’m going to improve that business. And it reminds me of when I first came into the MSP world in late 2016 and I discovered fairly quickly that there is the ability to outsource a great proportion of the hassle work that you have to someone else.
Paul Green: And of course I’m talking about Continuum and Inbay, and I know there are other people out there that you can outsource it to. You know, my first realisation that you can outsource your NOC, that you can if you wanted to, outsource your First Line. And I have a whole series of clients who love Continuum, who love outsourcing. Some of them are very open with their clients. Some of them aren’t so open. Some of them allow their clients to actually talk to America, or is it Manila where the other base is? And some of them they don’t allow them to, so they talk to, they have people in England who are talking to the clients, but the work is still being done in America. And there’s lots of different ways of doing it. But I remember being so excited when I first discovered this, that you can outsource much of the hassle.
Paul Green: And as I’m looking at these different business models of other companies outside of our world, I’m looking at it thinking, “How can I outsource much of this? Is there any way that this can be done elsewhere?” Because as I talked to business owning friends and I talk about different business models and what I’m seeing and what I’m discovering, they are genuinely gobsmacked that in your world you can outsource so much. And this is one of the things that makes an MSP a great business to run. And I know there are many downsides as well, but the ability to outsource hassle work to someone else who specialises in that is just beautiful And I know it’s not perfect. I know there are upsides and downsides and I’ve had many conversations with MSPs who their points of differentiation is they don’t want to outsource it. They want to keep it all in house and there’s nothing wrong with that. But I think this is one of those things that you should revisit on at least an annual basis and look at it and say, “Do you know what? If we’ve got to take on another first line tech or if we’ve got to take on this and we’ve got to add to our own resource base, is that the right thing to do?”
Paul Green: I think every time you lose a member of your team, you should be constantly reviewing, do we really need to replace this human being sitting in this office? Or could we outsource much of the work that that human was doing to one of the outsource providers and perhaps hiring a young keen apprentice who can be our dispatcher as it were, who can sit on the phone to clients, giving them great customer service and ultimately that difficult technical work is being done elsewhere. Now, if that’s not your cup of tea, there’s nothing wrong with that. But I do think it’s something you should be reviewing on a regular basis because this is the way the market is going. And you could argue there’s a downside, if all MSPs are outsourcing all work to all sorts of companies.
Paul Green: Yes, that does take away a point of differentiation, but you know, the fewer humans that you have to manage, the better. Really. Humans are great for getting stuff done, but there is a burden. There’s a burden of having staff. There’s a burden of having to have all these difficult people. And I don’t know what it’s like in the States right now or around the rest of the world, but in the UK right now, recruitment is an issue, especially as you go up the ladder. Your second, your third line recruitment is hard and it becomes easier for you. If you can say to your second and third line people, “You’ll never have to do any first line stuff. We will never ask you to do that because we outsource it.” So, there are X hundred people sitting in a center in this country waiting to do this.
Paul Green: I know if I was acquiring an MSP tomorrow, I would definitely ask myself that question of “Can I outsource some of this work? Does that save me some money? Can I improve the customer experience by doing this? And does it make us more profitable?” Because actually if it ticks all of those boxes, then maybe it’s a good thing to do.
Voiceover: Paul’s blatant plug.
Paul Green: Some friends and clients of mine, Andrew and Jean Eardley, built a set of tools over a number of years within their MSP. Every time they came across a job that frankly could and should have been automated, they got a coder to build a tool and it meant that their first-line techs were able to do much more complicated work because they could just press buttons. And they also discovered along the way that they could resell some of these services to their clients. Now they’ve put this on sale for other MSPs and they’ve bundled it together into a whole set of tools called MSP Easy Tools. And there’s a link to their website in the show notes on my website. All the details are at paulgreensmspmarketing.com/podcast/. But they’ve put these tools together and these tools themselves are generating thousands and thousands of pounds worth of monthly recurring revenue in their MSP. And they’re starting to do the same in other MSPs as well. Cause that’s what this toolkit does. It saves your techs some time and it also gives you a whole series of different things for you to sell to your existing clients. It’s a beautiful set of tools designed by an MSP for MSPs such as you. If you want to get all the details, you can check it out on my website. As I said, it’s paulgreensmspmarketing.com/podcast/.
Voiceover: The big interview.
Paul Green: One of the reasons I want to acquire a couple of businesses this year is because I’ve spent 10 years learning from this guy. He’s now become one of my best friends and he’s one of the most inspirational people I’ve ever met.
Jonathan Jay: So I’m Jonathan Jay and over the last 25 years I have made my money from buying and selling businesses. And in recent years I’ve been helping other business owners do exactly the same.
Paul Green: So Jonathan, we all know that the MSP world is going through very early stage consolidation. A lot of the big players are of course buying themselves. We know that the ConnectWise bought Continuum last year and our sort of level, you see acquisitions happening tends to be the higher businesses but some smaller ones as well. Now you’re a big fan of growing a business through acquisition rather than through the traditional route, aren’t you?
Jonathan Jay: Yes. I think this is the secret strategy. You see what most businesses do is that they grow one customer at a time. They gain a few customers, they are losing customers as one step forward, two steps back and that’s a slow process. So, what I always say to people is “What if you could take a business that you’ve been running for 10 years that’s taken you 10 years to get to where you are today and then in the next 12 months double, even triple the size of that business by making one or two strategic acquisitions?” And what that does is that it leap frogs you over your competitors, it gives you a huge advantage in terms of growing a larger business, which if you want to sell your business in the future, the larger you are, typically the more valuable you are. And it means you don’t have to spend another 10 years doing it. You can do it in the next 12 months.
Paul Green: Well that’s very easy to say actually going out, finding a business, figuring out the finances. Is that what puts most people off from doing it?
Jonathan Jay: Well, like most things, if you don’t know how to do something, then obviously it appears very complicated and, and you’re right, some people fall at the first hurdle because they don’t quite know what to do first, what to do second, what to do third. However, if there’s a system, if there’s a process, not only does it take a lot less time to buy a business if you’ve got a process, you’re less likely to make mistakes. And of course the first step is the strategy, is understanding what is it you want to achieve. And as Stephen Covey says, you start with the end in mind, work backwards. If you want to be a 5 million revenue or 10 million revenue business, then how are we going to get there? And identifying the businesses to buy is that very first part of the process. And once we’ve identified the businesses that we want to buy, then we’ve got to approach them in the right way, structure a deal. And I’m a big fan of structuring deals that don’t use any of your own capital.
Paul Green: So how exactly would you do that then? How can you buy a business without using your own money?
Jonathan Jay: Well, the key is always to use other people’s money and that might be the bank’s money and that might be using what we call vendor finance, where we structure the payment for the business over a period of time. So effectively the profit from the business pays for itself. So, it funds his own acquisition and when something funds his own acquisition, you then need to ask yourself, “Well, if I can do this, how many businesses do I want to acquire using the same strategy? And some people say, “Well, the answer is all of them because why wouldn’t you?” As soon as you realise that the amount of money that you have in your bank account is not going to influence your ability to make an acquisition, suddenly the options are just open wide up to you and you realise that yes, you can grow via acquisition.
Paul Green: So, if you owned an MSP and you were looking to grow quite dramatically throughout this year, what would be the first steps that you would take?
Jonathan Jay: Well, I would say, Where do I want to end up?” So, if I’m at 1 million revenue or 2 million revenue, I want to get to five maybe on my existing business plan that is a five or a 10 year plan. I say, “Okay, I’m going to now do this in the next 12 months and I need to buy businesses that maybe are similar to mine in different parts of the country. Maybe direct competitors in the same part of the country. Maybe part of my supply chain, part of my distribution chain.” But typically what most business owners do is they say businesses that are similar to mine where I can combine the two businesses, have the benefits of scale, reduce my overheads because I wouldn’t need two offices, perhaps. I wouldn’t need three. If I buy three businesses, I don’t need four, my office and the other three. I can consolidate all of the cost and all the expenses and therefore be more profitable and I would plan this out and then I would approach each of those competitors and some of them would come back to me and say, “Jonathan, yes, I am interested in selling. Can we have a conversation?” And then I follow the process that I’ve used for years and years and years on how to do that.
Paul Green: Okay. It’s great. Thank you very much. Jonathan where can we find out more about you?
Jonathan Jay: On my website, thedealmakersacademy.com, that’s thedealmakersacademy.com. Lots of free resources there to help people.
Voiceover: Paul Green’s MSP Marketing podcast. Ask Paul anything.
Olly Denhard: Hi, I’m Olly from IT Trouble Free. I’m interested to find out about how people get things done every week or every day or every month when there’s so many other things going on all the time.
Paul Green: It’s the thousand dollar question, Olly, and thank you for asking it. The most successful clients that I have are the ones who implement faster. In fact, the most successful business owners I’ve ever met are people who just seem to get things done quickly. And I think rapid implementation has one simple secret, which is that you put aside time every single day. Now, I’ve spoken about this previously in the podcast that I’m a big fan of getting up early in the morning and spending 90 minutes every single day working on the business as opposed to working in the business. So my 90 minutes, which I typically do at five in the morning, and yes, I know that’s extreme, but in my 90 minutes I’m not doing email. I’m not doing social media. I’m not looking at invoices. I’m not dealing with issues and problems. I’m working on the business. In fact, I’m doing one of three activities, stuff that either gets me more new clients or stuff that gets my clients to buy from me more often, or stuff that gets my clients to choose to spend more every single time they buy. That’s what working on the business really means.
Paul Green: And the trick is to have that time diarised every single day. So, the way that I do that in the way it can’t be stolen from me is to do it at five o’clock in the morning. An extreme thing to do, yes, but it works for me. I have clients who do this at lunchtime. I have clients who do it in the evening. I’ll have clients who do it sort of at 9:30 in the morning so they can come in and talk to their tech team and then lock themselves away. The key to it is to put aside some time every single day and then protect that time. Switch your phone off. Don’t let people interrupt you. Put a sign on the door which says if you are interrupted, you will literally kill them and you have to police that. Remember you have to enforce it. Or better still, go off to a coffee shop or sit in a hotel lobby and just do stuff.
Paul Green: If you could find 60 minutes a day or better, 90 minutes or even better, two hours a day, to work on the business, then within a couple of weeks you’ll find that your problem isn’t finding time to work on the business every day, your problem is actually “What are we going to do tomorrow morning?” Because you get things done so quickly. You get projects finished and by projects, I don’t mean technical projects, I mean business building projects. You get stuff done. It’s very exciting and rapidly you realise that you can clear the queue of things that must be done.
Paul Green: Now don’t please fall into the trap of thinking you can do a day a week. Loads of people think, “Do you know what? A bit of time, every day is too difficult. I’m going to do a day a week. I’m going to put aside Fridays and I’m going to work on the business on Fridays.” The problem is what happens is things come along and steal that time. The unhappy client, the project that stalled, the tech that needs some help on something and suddenly, and also if you do it on a Friday, you’re exhausted on a Friday. So, what you might think of as eight hours on a Friday, suddenly turns into three hours or even worse, no hours at all. And then that’s it until the end of next week. So, a little bit of time every day always outperforms a big chunk of time once a week.
Paul Green: And then the only other secret is to put yourself in an environment where you can’t be interrupted when you have to focus on the things that make the biggest difference to the business. And that’s always stuff that’s working on the business rather than working in it.
Voiceover: How to contribute to the show.
Paul Green: So we’re 10 episodes into this podcast now and I’m really keen to start tweaking it and improving it and making it better because I’m going to do at least a year of this. And if you love it, I’ll keep doing it past that. I do need your feedback, please. Could you send me your positive feedback and your negative feedback? Just be kind with me. You can email it to email@example.com.
Voiceover: Coming up next week.
James Newell: You might be too embarrassed to question me on what that actually means and I’ll lose the sale because I’ve assumed that you know what I’m talking about.
Paul Green: That’s James Newell is a sales expert and he has a way of explaining sales and teaching it to people like us who aren’t professional salespeople, but who have to get out there and sell, and he’s going to be talking next week about differentiating yourself from all the other MSPs. We’re also got a very clever idea to help you pick up the phone and make more sales calls or in fact do any other repeatable tasks, which you don’t really want to do, but it does make a difference. And we’re going to talk about how as the owner of the business, the price of leadership is criticism. See you next week.
Voiceover: Made in the UK for MSPs around the world. Paul Green’s MSP Marketing podcast.