Are you making the money and having the fun you imagined when you started your MSP business?
This is why!
My MSP has been a member of an HTG peer group for 6 years. Twelve MSPs meet face to face every quarter to share ideas and help each other grow.
In the first meeting we were all asked - “Why are you in in business?”. The question was passed around the room.
“I am in business to provide for my family”
“.... to serve my community …"
“.... to help customers ….”
".... to help other businesses...".
These were all fine sentiments but didn’t answer the question – “why are you in business?”
Some answers spoke to why the business existed but not to why it was your business. Some spoke to personal aspirations but not to how owning a business was any better than a well - paying job. Some mentioned money but no-one said anything like “Make a ton load of money”. No-one mentioned fun at all. The prevailing group think was that ‘business’ is a serious business.
So when it came to me, I threw out “have fun, make money”. This was meant to be a placeholder for a better answer at a later time. Even though it sounded a little facetious at the time it is still the best distillation of my whys of owning the business.
Make money, have fun. Who wouldn’t want that? Well, funny story …
During our HTG quarterly face to face meetings we all present a quarterly board report. At the end of the presentation each company presents their most pressing issues. In the 6 years, we have had 24 meetings and reviewed 288 ‘pressing’ issues.
In time it became obvious that a lot of ‘pressing’ issues that people bought to the group shouldn’t have come to the group at all. There were two causes in play – poor focus on fun and money.
Many ‘pressing’ issues had easy solutions at hand but these solutions were not considered because of cost. Harvey Mackay has a theory I have always liked – “If you can afford to buy your way out of a problem then you don’t have a problem”.
My corollary to that would be “If there’s a problem that could be bought off but you can’t afford to do that then it’s more likely your real problem is that you don’t make enough money."
Worse, I’d see these people focus on problems they could afford to solve but shouldn’t. ‘Pressing issues’ where you could see that any solution, executed to the best possible outcome, would not be seen on the bottom line. These were problems that should be ‘band aided’ until we can pay someone else to deal with them. This incorrect focus compounded the money problem and a downward spiral created.
No money. How will more fun fix this?
The fun part of the solution is best explained by way of ‘Away goal/Toward goal’ theory. We all know goals are great tools. It is useful to break goals into two groups - 'Towards' and 'Away'.
Towards goals, where you build a better future, have the most power and the greatest legs. Towards goals are the fun ones because you are creating something that you want but don’t have.
Conversely, Away goals are where you are removing yourself from a situation you don’t want. Away goals are not nearly as motivating and powerful as Towards goals. We also have a limited capacity on Away goals before the effort starts to tax us heavily
Troublingly most technical people are drawn to Away goals. Away goals are more concrete. This is a situation that exists now. Towards goals are abstract by nature. We’re creating the future.
So far, so obvious, but it took me 12 years to even start to act in a way that realizes these truths.
I worked under the mistaken assumption that if I toiled hard, for enough years, my efforts would suddenly be rewarded with lots of money. This would allow me the room to do the things I wanted to do. You know… have fun. So I toiled for 12 years waiting for the miracle that never happened. Fortunately, I had an epiphany.
In 2000, I went on an epic vacation through New York, London, Paris, Berlin and Scandinavia. I came home and realized I wasn’t having anywhere enough fun in my work. The epiphany was that I wasn’t making anywhere enough money and this was because the way I made money sucked.
We were 100% time and materials billing at the time. I started every month with a guaranteed spend on fixed overhead and only a general idea where the billings would come to cover that. This meant that the only ‘pressing’ problems I could work on were ones that had no significant cash outlay.
I locked myself in a room for a couple of weeks and wrote a manifesto of what I would do. How I planned to make a ton-load of money and how I would have fun doing it. I sent this newsletter to my clients. It’s an early ancestor of Managed Services that I developed in 2000.
The point is not to be just-another-MSP-who-was-first-to-do-Managed-Services. The point is that I was able to work that out, on my own in New Zealand, with a strong focus on Money and Fun.
That was the start. My business partner was horrified that we would go fixed-price so I bought him out.
That fixed a money problem (no more splitting profits) and a fun problem (no more banging heads). The essence of good managed services is to create your own systems and process. Essentially create your own IP.
I had written software from the start of the business. It was clear that creating our own IP by writing software was the most fun and the most rewarding to me.
Create IP and sell that. There’s my fun and there’s my money.
It was not an overnight turnaround. I wrote my own PSA before we found ConnectWise. We wrote our own RMM on OpenBSD and then found N-Able. It took 5 years to get our first software product out.
If you are making the money and having the fun, you thought you would when you started the business I doubt you read this far.
If you aren’t, then my advice is to lock yourself away and consider carefully what you find fun in your business.
It doesn’t have to be software but it does have to be some specialization or focus.
Now build a financial model where that work makes enough money to delegate everything else (i.e. buy them off). It doesn’t have to be something you can implement straight away. It does have to be feasible.
If there is no answer you should probably take a job until there is. Life’s too short to be unhappy earning bugger all.