Golden Rules for MSP Excellence: Results > Recognition
VISION ’24 is in just a few days! You can view the full VISION ’24 Agenda here. We’ve been exploring this year’s theme – Achieving the Gold Standard as an MSP – in a 4-part blog series called Golden Rules for MSP Excellence. In this fourth and final installment, we’re facing a hard truth square on…
You’re amazing! You rock! There’s no one else like you! What you do for us is invaluable! We can’t thank you enough!
Feels good, doesn’t it? Who doesn’t like getting praise and positive feedback – a big thumbs up, five stars, a juicy referral…
But if you’re an MSP owner, there’s something you should know. It’s a hard truth that many MSPs will never fully embrace. The good news is: If you can embrace what we’re about to share – and we mean embrace, with your whole heart and mind – it’ll be like unlocking a new superpower. Pretty freakin’ cool.
Golden Rule #4 – Results > Recognition
Results over recognition. We’ll say it again because it’s that important: RESULTS OVER RECOGNITION!
This means what it sounds like it means: as an MSP, your focus needs to be on getting results and not on receiving recognition, praise, applause, etc.
Here’s why:
Our Service is Silent
This isn’t entirely true; MSPs can perform large-scale IT projects that make an immediate, obvious and measurable impact on their clients’ work lives.
But let’s face it, the bulk of our value lies in behind-the-scenes work aimed at keeping systems running smoothly and securely.
This type of work is what sets MSPs apart among other third-party services in terms of value added to client businesses; we don’t just fix problems, we prevent them.
But it’s also responsible for something of a paradox: when we MSPs do our jobs really well, we prevent problems from arising in the first place, which can make the fruits of our labor somewhat invisible. In short, the better we are at our jobs, the easier it becomes to ignore us.
Think about it. What would you notice more – a discreet, tiny robot that snuffs out potential fires before you even realize something’s burning OR a crew of firefighters who come storming in when your house is already engulfed in flames?
A Caveat
It’s one thing to accept that your role as an MSP is not to be ‘the hero.’ It’s another to let your efforts go unnoticed entirely.
To demonstrate your MSP’s value and keep clients in the loop about the benefits of your services, communicate results, hold regular QBRs, and don’t be afraid to highlight important milestones. It might not be polite to toot your own horn, but if you’re an MSP, sometimes it’s necessary.
IT’s Complicated
It’s true. What we actually do as MSPs is tough to explain.
On a surface level, it’s easy: MSPs function as outsourced IT departments, remotely managing clients’ IT infrastructure, providing ongoing support, maintenance, and proactive monitoring to keep systems running smoothly and securely. You’ve heard the elevator pitch. Perhaps you’ve even given it.
But explaining what all of that actually involves? Well, it would take hours and hours and hours. Your clients, for the most part, aren’t interested, nor do they have the time. It’s not their job to understand the ins and outs of IT. It’s yours. In fact, it’s why they hired you – so they could focus on stuff that isn’t technology.
What this means, among other things, is that clients won’t typically appreciate just how much work it takes to do what your MSP does – and it’s not at all their fault; the work MSPs perform is highly technical, largely behind-the-scenes, and not inherently flashy.
A Caveat
IT work may be technical work. But that doesn’t mean your MSP has to drown clients in jargon. In fact, keeping explanations crystal clear and translating technical concepts into plain English is a hallmark of a service-oriented MSP (i.e., a good MSP).
If you need some help with this, check out “The Dejargonator” – our handy plain-English dictionary of tech terms (coming soon to The 20 MSP’s blog).
MSPs Bring Ridiculous Value
The value MSPs bring to client businesses is quite literally incredible – it’s hard to believe! That’s because our basic role as MSPs – keeping IT running seamlessly and securely – is integral to practically every single business function. Email, remote work, customer support – it all rests on IT working correctly.
Moreover, performing our role as the do-it-all IT partner has gotten exponentially more difficult over the past ten years, as Fred Voccola touches on in this short but eye-opening video.
Bringing all of this back to our central topic, it’s almost inevitable that clients will underestimate the true value of our services given (a) how hard it is to deliver these services consistently and excellently, and (b) just how many things depend on the successful delivery of these services.
Motivation Matters
The bottom line is that if you’re in the MSP game for recognition and praise, you’re in the wrong game.
So don’t focus on recognition! Focus on results. Focus on doing your job well. Focus on making clients’ technology better and their lives easier. Focus on service.
Actually, that’s not enough. You can’t just focus on results instead of recognition; you also have to align your fundamental motivations accordingly. To put that in plain English: If you want to thrive as an MSP and not fall prey to self-pity and bitterness, be driven by a passion for solving problems and delivering value, and not by external validation and accolades.
If you can make passion your engine and excellence-for-its-own-sake your fuel, you’ll not only go farther as a business owner; you’ll also have a much better time along the way.
Thanks for reading – and if you’re attending VISION, we’ll see you in a few days!
Golden Rules for MSP Excellence: Keep It Real!
In honor of this year’s VISION theme – Achieving the Gold Standard as an MSP – we’re publishing a special 4-part blog series: Golden Rules for MSP Excellence. Before you read another word, grab your ticket to the big show – just a few open spots remain! View the full VISION ’24 Agenda here.
Now, without further ado, introducing our third golden rule. As you’re about to discover, it’s the REAL DEAL…
Is your MSP for real?
What do we mean by that? On one level, we’re talking about whether your MSP business is a serious business – and whether you see it as such.
But we explored this idea in the first installment of this 4-part series – It’s Business Time. Now we want to look at another way an MSP can ‘keep it real.’ It has to do with honesty, transparency, accountability, and authenticity.
Does your MSP keep it real? Keep reading to find out!
Golden Rule #3 – Keep It Real
Elite MSPs don’t typically lie and cheat their way to the top. That’s because being an MSP is about forming enduring relationships with clients. It’s about treating people well. Integrity is at the heart of what we do: service.
But simply not being dishonest isn’t enough to help your MSP stand out. It’s the bare minimum. If you want to be a leading MSP – an elite MSP – you have to do more than abstain from lying; you have to lean into truth and transparency, authenticity and accountability – and lean hard. Here are some specific ways to achieve this…
Real Talk – Skip the Technobabble
Don’t do it. What’s that? You’re not? Think again.
We work a lot of MSPs here at The 20, and we see this all the time. MSPs believe they’re communicating clearly with clients and prospects, using jargon only when necessary. But then we show them what ‘plain English’ really looks like, and it’s like the scales fall from their eyes.
So however much you’re toning down the geekspeak, double your efforts and you might achieve the type of clarity the best MSPs have mastered.
This advice is most directly relevant to your sales and marketing efforts, but the ‘power of plain English’ should pervade every part of your business. So, next time you’re in a sales meeting and you find yourself about to say, “Our proactive and expert team uses advanced, real-time analytics to optimize throughput and ensure minimal latency,” take a beat and find simpler words:
“We have really smart people keeping an eye on your network at all times to make sure it runs fast and smooth. Some providers fix things after they break; we keep things from breaking in the first place so you don’t waste time reaching out and waiting on a fix.”
Notice the second one is a little longer, and that’s because it includes the benefit, and not just the feature. Remember, benefits > features. Tell clients why what you’ll do is a good thing. Explain how it makes their life easier, more fun, better. If you commit to focusing on concrete benefits, ditching the technobabble becomes only natural.
Real Costs – Be Transparent About Pricing
This one is straightforward. Be totally, unwaveringly, and wholeheartedly transparent about your pricing. If your pricing model isn’t truly flat-rate, don’t say it is. If you charge for labor, let clients and prospects know. If there are hidden fees, drag them out into the light.
Transparency builds trust, and when you have trust, everything else gets 100x easier (not an actual stat).
Real Words – Mean What You Say
Mean what you say and say what you mean. This applies to pricing, as we just discussed, but it’s a good policy for every aspect of your MSP business. It’s OK to portray your company in a favorable light, but don’t call your one SDR an “elite sales team” or your basic services package “premium.”
Again, it all comes down to trust. We know you want to impress your clients and prospects with attention-grabbing statements and lofty promises. But you know what will really get their attention? Talking to them as human beings, with honesty, respect, and not an ounce of bulls**t.
Real Reviews – Conduct QBRs
Conducting quarterly business reviews (QBRs) is key for MSPs focused on accountability and authenticity. These reviews give you a chance to evaluate your performance against SLAs and metrics, allowing you to honestly address both successes and areas where SLAs were not met.
Not sure how to approach QBRs? Check out this helpful overview from Zomentum.
But here’s something you should definitely include in a QBR…
Real Recommendations – Tell Your Clients What They Need
This one is huge – no, GIGANTIC. MSPs are supposed to be proactive. That doesn’t just mean we ought to do everything we can to prevent IT problems for our clients; it also means we should actively guide our clients toward improvements that drive their success.
If you need to be firm about something, be firm. If your client is lacking in some crucial piece of IT infrastructure or missing a solution that’s really a no-brainer, be respectful, but don’t beat around the bush. Ultimately, being a good MSP is about telling your clients what they need to hear, not what they want to hear. Of course, this is infinitely easier (again, not a real stat) if you’ve previously established trust.
Final Thought – Get Off Your Island!
We’re going to follow our own advice and tell it like it is:
Growing a large and profitable MSP ‘on an island’ was difficult ten years ago; now it’s virtually impossible.
If you want to succeed in this industry, stop going it alone. It won’t work, or it will until it won’t – until you burn out, run into problems with scalability, etc. The MSPs that attend VISION ’24 later this month are some of the best in the channel, and the reason is simple: they know they don’t know everything, and habitually reach out for wisdom and guidance.
If you want to be king, by all means continue to control every aspect of your MSP. But if you want to be rich – get off that island and plug into the broader MSP community!
Thanks for reading – and don’t forget to register for VISION ’24, your MSP’s path to the gold standard.
Golden Rules for MSP Excellence: Do What They Don’t
In honor of this year’s VISION theme – Achieving the Gold Standard as an MSP – we’re publishing a special 4-part blog series: Golden Rules for MSP Excellence. You can find the first installment here. In this second article, we’re introducing a new rule – a rule that separates the wheat from the chaff, the great from the good…
We work with a lot of managed service providers (MSPs) here at The 20 – a lot. This gives us a window into certain patterns – a bird’s-eye view of what separates the so-so MSPs from the really good MSPs, and the really good MSPs from the great MSPs.
The purpose of this article is to give MSP owners a clearer idea of what it takes to make it in this industry. And by ‘make it’ we mean thrive, not survive. We figure most MSP owners founded their companies with high hopes – you don’t set out on your own entrepreneurial path to build something ‘not bad’ or ‘pretty good.’ You start an MSP because you want to create something special and leave a lasting legacy.
So let’s talk about what that really requires. What do you absolutely have to do if you want to grow an elite MSP business?
Golden Rule #2 – Do What They Don’t
It’s nice to think that everyone can be great. But reality begs to differ. Mountains narrow toward their peak, and there’s only so much room at the top.
So, if you want to build a really successful company – an elite MSP in the top quartile of our industry – you have to do what others don’t do, won’t do, can’t do…
That might sound like a tired sports cliché, but remember, clichés become cliches for a reason – they’re typically true! That’s definitely the case here; we’ve worked with hundreds of MSPs over the years, and we’ve observed some consistent trends. In what follows, we’re revealing three things ultra-successful MSPs do that other MSPs simply don’t do.
Is your MSP willing to do these things to get ahead?
They Do What’s Boring
Here’s a simple but profound truth every entrepreneur – and really anyone pursuing dominance in their chosen field – should never lose sight of:
The ‘best in the biz,’ regardless of industry, aren’t necessarily on top because they’ve worked harder than everyone else; they’re there because they did the boring stuff.
Not once, not twice, but again and again and again and again. James Clear, author of the #1 New York Times bestseller Atomic Habits, hit the nail on the head when he wrote:
Somehow, top performers in any craft figure out a way to fall in love with boredom, put in their reps, and do the work.”
This is as true about MSP owners as anyone else – and in fact, it might even be more true for MSP owners! There are countless aspects of running an MSP business that aren’t exactly glamorous: keeping impeccable financial records, updating documentation on a regular (and scheduled) basis, performing compliance checks – to name a few of the less sexy tasks that keep an MSP running smoothly.
So, what’s the takeaway here – that if you want to grow your MSP, you’d better brace yourself for some serious boredom?
Not exactly, for two reasons. One, at a certain point in every MSP’s growth journey, delegating or outsourcing areas of business becomes a must. It doesn’t have to be you doing the boring stuff, as long as you’ve got someone on the job you can trust and rely on.
More importantly – and this ties back to the James Clear quote – most really successful MSP owners don’t find the boring stuff, well, boring. In fact, many love it. They love process. They love fine-tuning. They love tracking metrics. They love finding ways to become more efficient.
Are you willing to fall in love with boredom – or find enough ‘process freaks’ to join your team and make sure your MSP is crossing its T’s and dotting its I’s?
They Do What’s Uncomfortable
It’s true – if you want to grow, you need to accept that growing pains are a thing. Now, we want to be careful here not to perpetuate a harmful and counterproductive stereotype: that building a large and profitable MSP is supposed to drive you into the ground and leave you with just a few scraps of sanity.
In fact, our primary goal here at The 20 isn’t just helping MSPs grow and scale; it’s helping them to do so without undue stress and difficulty. We also know that as MSPs get larger and more operationally mature, things actually get easier. In our experience, the MSPs in the bottom half of our industry work harder on average than those at the top. Cruel irony – or the power of scalability in action?
With all that said, there’s no way to bypass discomfort entirely on your way to the top. If you’re looking to take your MSP to the next level, here are a few trips outside the ‘comfort zone’ you’ll likely have to make:
The No Trip
Part of growing a profitable MSP is learning to say no. Whether it’s to an outlandish client request or to taking on (or retaining) a problematic client, strategic denials are a cornerstone of healthy business growth. If something is, on balance, detrimental to the health of your company, remember, it’s OK to just say no.
The Self-Promotion Trip
Self-promotion – yuck, right? Wrong! It might not come naturally, but promoting yourself and your MSP is a powerful tool for unlocking new growth.
Thinking about dabbling in video to build your brand on social media? Go for it! You don’t have to put out a perfectly edited and polished product, either. Even humble videos will attract attention, build brand recognition, and foster trust among clients and potential clients. This is hardly surprising, when video accounts for more than eighty percent of all internet traffic!
Will putting yourself out there be scary? For the introverts (of which there are many in the MSP space), it almost certainly will be. But embrace the feeling of discomfort – it’s a sign you’re on the right track!
The ‘Loosen Your Reins’ Trip
A lot of the MSP owners who approach us looking for help with growth share a common problem: they are their businesses.
What does that mean? It means their MSPs run only by virtue of these hardworking folks’ direct, continual, and at times herculean efforts. They oversee everything, do everything, are everything – engineer, technician, sales, even janitor! This all-encompassing involvement often leads to burnout and hinders growth, as they become the bottleneck for every decision and task within the company.
This approach simply isn’t sustainable in the long run. To truly grow and scale their business, they need to transition from being the doer of all things to being the leader and strategist. Delegating tasks, building a reliable team, and implementing efficient processes are essential steps towards creating a thriving MSP.
They Do What’s Uncertain
Try new things! Try new things! Try new things! We said it three times because it really is that important. You want to create repeatable, scalable processes for everything in your business. Most MSPs owners accept this (fewer act on it). However, it’s the why that loses a lot of folks. So listen closely to what we’re about to share…
You don’t create repeatable, scalable processes so you can rest on your laurels and go through the motions. You do it because you want to build a foundation that allows you to innovate, grow, and adapt. By having reliable systems in place, you free up time and mental energy to explore new opportunities, tackle bigger challenges, and focus on strategic initiatives.
So by all means standardize where you can, implement processes where you can – but never stop looking for areas of your business to improve and evolve. And remember, oftentimes the big breakthroughs come on the heels of risk and uncertainty. If you want to grow, you have to embrace uncertainty.
Rub Shoulders – A Final Thought
We’ve considered three things the best and successful MSPs do that others don’t: they do what’s boring, they do what’s uncomfortable, and they do what’s uncertain.
Striking a balance between these activities is tough. For instance, there’s no foolproof system for optimally dividing your time and attention between ‘the boring’ and ‘the uncomfortable.’ Allocating your time wisely is one of those things you get better at through experience – and also, by plugging into a broader community of MSP owners. Here at The 20, the business-savvy habits and tactics of our larger, more experienced members provide an example for newer members to follow.
You can study elite MSPs from afar and learn as much as you can from them. But there’s just no substitute for getting directly involved in a peer group, and talking shop with other MSP owners who share your goals and struggles.
Want to check out our wonderful group? Take a look…
It’s VISION Time!
If you enjoyed this piece, look out for the next installment in our 4-part blog series, Golden Rules for MSP Excellence. And don’t forget to register for VISION ’24, taking place later this month (Aug 27-30) in sunny Dallas, TX.
The MSPs you’ll encounter at VISION are some of the most motivated, process-driven, and business-savvy companies in the game. Want to know what it takes to make it in this competitive industry? Come hang out with the best of the best at VISION ’24!
Scalability Matters
The Art of Scaling as an MSP
Scalability in business is everything — if you want to scale. But what does it mean to scale? Here’s one definition you might have encountered:
To scale is to increase revenue faster than costs.
This definition helps us start to get a feel for the concept of scalability. ‘Profitable growth’ is concise, and it does capture what it means to scale. Unfortunately, it only captures half of it …
Scalability refers to the capacity to not only scale up — i.e., increase revenue faster than costs — but also down. Scaling down is being able to minimize losses when business slows. In other words, it’s decreasing costs in the face of decreasing revenue. A concrete example: If you lose customers, you’re going to lose revenue. How do you reduce costs to maintain profitability? Answering that question is figuring out how to scale down.
Scalability is straightforward on paper. But as a business owner, you don’t just want a textbook understanding of scalability. You want knowledge you can apply. You want wisdom.
Look no further. In this blog post, we’re going to talk about scalability in the managed services industry, discuss whether scalability is necessary for your managed service provider (MSP), and share three important points to keep in mind as you pursue greater scalability at your MSP business.
What if I don’t want to scale?
We started this article with a qualification: scalability in business is everything — if you want to scale. “But what if I don’t want to scale?” you might ask.
The short answer is that that’s fine. Scalability, like most things in business, is something you can choose to work toward. The operative term here is “choose.” Your reasons for starting or acquiring your own business are just that — yours. You might not be looking to grow a gigantic, hugely profitable MSP. Maybe your ambition is simply to be your own boss, and make a little money doing something you’re passionate about. Nothing wrong with that!
But if you happen to be in the managed IT services game, things are a bit more complicated …
The market for managed services isn’t just growing, it’s ballooning. Competition is on the rise, as more MSPs throw their hats in the ring for a piece of the rapidly expanding pie.
At the same time, clients — i.e., businesses that need IT support — are looking to do more and more on the digitalization front, and accordingly, expecting more and more from their MSPs and ITSPs.
What does all of this mean for an MSP with modest ambitions on the scalability and growth front?
In short, it means that you can’t afford to ignore scalability, even if you don’t aspire to grow and scale up in significant ways. When you’re swimming against a current, it takes effort to stay in the same place, let alone move forward. The ‘current’ your MSP is currently facing consists of other MSPs looking to steal your clients, ever-evolving technology that threatens to render your services obsolete, and greater/more numerous client expectations.
So, even if your goal isn’t to grow, but simply stay in business and serve your clients, chances are you will need to do things like improve your operational efficiency so that you can not only keep your current clients, but also, meet their ever-evolving needs.
Scale Forward to Scale Up
If you’re an MSP looking to scale up, you need to think in terms of scaling forward. This just means thinking ahead, and building out the infrastructure and operational capacities that will be required once you’ve grown to a certain point.
But what point? How far in advance should you plan?
We can’t give you a precise answer to that question (it depends crucially on your specific situation), but we can tell you this much: it’s the right question to be asking!
Scalability is all about anticipating growth, and finding the ‘sweet spot’ between two extremes:
On one hand, you don’t want to only scale reactively, and scramble to adjust operations to accommodate a greater workload, whether it comes from an influx of new clients, an expansion in your service offerings, or whatever else.
On the other hand, you shouldn’t make the opposite mistake, and assume that ‘if you build it, they (clients/revenue) will come.’ It’s good to be optimistic, but it’s better to be realistic, and investing in a bunch of new resources, whether staff or technology, because you’re simply hoping to grow a lot, and soon, isn’t bold; it’s foolhardy and could cost you a lot, including your business.
Figuring out how far to ‘scale forward’ means taking a good, hard look at not only your MSP — where it’s at and where you expect it to be in 1 year (5 years, 10 years …) — but also, your industry and what the market’s doing. You don’t have to know with certainty that your efforts to inject scalability into your MSP will be met with enough growth to justify the investment. But you should at least have good reasons to predict that such growth will occur in a timely manner (i.e., soon enough to prevent any severe dips in profitability).
At the same time, bear in mind that adding scalability to your MSP — hiring more technicians, streamlining workflows, opening a second location, etc. — doesn’t just prepare you for future growth. It can facilitate future growth. When your services are more scalable, they’re more efficient, and when they’re more efficient, they’re more attractive to prospective clients.
Get Hypothetical!
Business is numbers. Cold, hard data.
Sure, but it’s also imagination, risk-taking, vision, and brute persistence. This is particularly evident when it comes to cultivating scalability at your business.
Business executive and startup advisor, Gordon Daugherty, suggests that one of the best ways for business owners to maintain an appropriate level of scalability is by asking one simple question, again and again:
Where would we break?
If one of your clients opened two locations in a different state, where would your MSP break?
If your revenue doubled next quarter, where would your MSP break?
If you landed a client with triple the endpoints of your current largest client, where would your MSP break?
When you can zero in on the parts of your business that would start to unravel — or fall apart entirely — under the pressure of an increased workload, you can focus on injecting more scalability into those weak points, so that they don’t end up hampering growth.
Of course, when you ask, “If X happened, where would we break?”, the likelihood of ‘X’ matters a great deal. If ‘X’ is highly unlikely, fixing the part of your business that would break in the event of X isn’t so pressing, or even advisable. But if ‘X’ is something you’re expecting and/or striving toward — if it’s a scenario you’re preparing to encounter — then making your operations more scalable to accommodate ‘X’ becomes a much higher priority.
The devil is in the details with all of this, which is why it’s a good idea to recruit outside help when trying to increase your MSP’s scalability. The 20 gives MSPs something very valuable in this regard: an entire community of MSP owners who’ve gone through a variety of growth stages, and learned crucial lessons along the way. Our MSP members can draw on the collective wisdom of the group when planning for future growth.
Become a Process Pro
If you want to make your MSP more scalable, it’s time to fall in love with process. This is just another way of saying that becoming scalable is all about efficiency. Scalable processes, all things being equal, are efficient ones.
Your MSP might operate efficiently with its current workload, but what if your client base doubled — where would operations bend? Where would they break? A general principle of scaling up is that it amplifies what’s bad, and makes what’s good harder (a big reason why so many companies fail to scale up successfully!). So, when considering the efficiency (and scalability) of your MSP’s workflows, keep in mind that small or minor inefficiencies can quickly become glaring service issues when the scope of your services increases. Similarly, scaling up requires that you keep an eye on areas where your MSP shines, and ask: How can we continue to excel at these things under greater operational demands?
In your pursuit of greater operational efficiency, two invaluable tools at your disposal are metrics and documentation. Employing the right metrics, including key performance indicators (KPIs), can help you track, analyze, and improve your team’s performance, enabling your MSP to reach greater and greater heights of efficiency. Documenting your MSP’s core processes, and developing standard operating procedures (SOPs), not only helps technicians perform their jobs faster and more smoothly, it also makes it easier to bring new hires up to speed. This is vital, as scaling up often means hiring more people, and if your MSP’s hiring/onboarding/training protocols aren’t standardized and documented, the costs of expanding your workforce can easily start to exceed any gains in revenue that such growth produces.
And remember, employing metrics and documentation at your MSP is only worth doing if you’re committed to doing these things well. Using ineffective KPIs, or documenting processes without also scouring those processes for inefficiencies, costs more than it’s worth in time, resources, and energy. So don’t just dip your toe into metrics and documentation; dive in with gusto!
Scale Your MSP with The 20
If you want to see real changes at your MSP, you need to make real changes — and this is especially true when it comes to scalability. The main reason MSPs struggle to scale up successfully — i.e., increase revenue faster than costs — isn’t that scalability is too complex or difficult. It’s that it’s too scary!
Generally speaking, scaling up doesn’t mean getting better at what you already do, but rather, getting good at new things. It means changing your business model — the very plumbing of your organization. It means giving up some control (if you are your business, that’s fine, but it’s not scalable!). In short, becoming a scalable business often means becoming a different kind of business, which is why many MSP owners make scalability-oriented changes only halfway, or half-heartedly — they’re afraid of the meaningful change that is actually required to achieve a high level of scalability!
The 20 works with MSPs that are serious about growth. Our revolutionary approach not only gives you a blueprint for how to scale, but an entire community of MSP owners to help you along the way. You can spend years and years trying to puzzle out scalability all on your own, or you can plug into The 20’s model and give your MSP the tools and tactics to scale up (or down) with ease. If you’re in the MSP game to grow a large and profitable company, The 20 is your “easy button.”
Get in touch today to learn more, and check out this 2-minute testimonial video to find out how The 20 helped one MSP owner solve the problem of scalability.
Golden Rules for MSP Excellence: It’s Business Time!
With just over a month till VISION ’24 (register here), it’s time to get into the spirit of this year’s conference theme: Achieving the Gold Standard as an MSP. We’re excited to share the first installment in a special 4-part blog series: Golden Rules for MSP Excellence. In this first article, we’re looking at the number one rule MSPs should follow in the pursuit of greatness…
Before we get to our first golden rule for MSP excellence, let’s talk about what MSP excellence even means. When we talk about ‘achieving the gold standard’ as an MSP, what are we really talking about?
The easy answer is that ‘achieving the gold standard’ means doing what the biggest MSPs do.
But it’s not the best answer. That’s because big MSPs aren’t always shining beacons of operational maturity and service excellence. And while achieving the gold standard helps with growth – undoubtedly – it’s not just copying large MSPs. It’s doing things the right way – not just growing, but scaling; not just winning new clients, but keeping them (and keeping them happy); not just solving technical problems, but core business challenges.
A lot of larger MSPs are good at these things – that’s a big part of how they became larger MSPs! But achieving the gold standard isn’t exclusive to the major players with many millions in annual revenue. In many cases, the gold standard is something you can start working toward right away, regardless of your MSP’s size.
This is especially true of our first golden rule for MSP excellence…
Golden Rule #1 – Be About Your Business
Be about your business. What does this mean? On the surface, it just means you should, as an MSP owner (and really any business owner), be focused, disciplined, diligent, professional, and so on. But there’s a deeper meaning…
To be about your business is to conceptualize your MSP as a business, first and foremost, and not, say, as a source of technological expertise or an excuse to geek out about computers while making a little money.
Thinking about your MSP business as a business doesn’t mean you have to stop being passionate about technology, or that you should think purely in terms of profit. In fact, both of those sound like a recipe for disaster.
So what does this conceptual shift involve? How do you think like a business owner and approach decisions accordingly?
Good for Business
One of the best ways you can ‘be about your business’ is by habitually asking: Is this good for business?
This might sound obvious, but as the following two examples reveal, determining the overall impact of a decision on your MSP’s health as a business is anything but straightforward.
Example #1 – The Right Tool
You’re considering making a change to your MSP’s tool stack. But you really like your tools! From a purely technical perspective, they rock!
But what about from a business perspective? Would switching to a new tool stack be good for business?
Answering that question actually requires answering a whole bunch of other questions: Are my tools scalable enough for my growth goals? Are they preventing crucial integrations? Are they backed by heathy vendor relationships? Would switching tool stacks open new doors?
And let’s not forget about what is arguably in this context the most important and salient question of all: Which tools best serve my client relationships?
You might like your current stack, but when you’re striving for the gold standard, it’s not about you. It can’t be. It’s about your operations, your employees, your clients – in short, your business.
Example #2 – Just Say No
Imagine one of your clients demands a complex system migration in a week. You might be able to pull it off, emphasis on might…
When you’re first starting out as an MSP owner, it’s only natural to say yes. New client? Yes! Custom request that falls outside your core capabilities? Sure! Unrealistic timeline that will likely make your technicians hate life? Bring it on!
While understandable, saying yes to everything isn’t a sustainable business practice, and in fact, strategic no‘s are a hallmark of a mature, forward-looking MSP.
So, getting back to that complex migration, while the engineer in you might jump at the opportunity to showcase some serious technical wizardry, the business owner in you should be wary. Depending on the details, you might decide to take on the project, but it shouldn’t simply be because you can do it (albeit with a lot of stress and overtime). It should be because, all things considered, taking on the project will be – you guessed it – good for business.
A Matter of Time
As the above two examples show, making decisions that are good for business, while simple in concept, is pretty darned complicated in practice. That’s because it requires ‘zooming out’ – seeing the big picture and considering the cascade of effects a single decision is likely to have.
This zooming out business is especially challenging when you’re busy. When you’re up to your neck in day-to-day work while constantly putting out fires, it’s almost impossible to step back and consider things coolly, with an eye to the overall health of your company.
To perform that kind of objective assessment, what you really need is time. This is why one of the most important things you can do as an MSP owner is find ways to protect your time. Creating repeatable, scalable processes backed by robust documentation is one way to protect your time. Delegating core business functions to trusted partners and experts is another. Becoming a member of a group like The 20 and off-loading the bulk of your tickets to an acclaimed 24/7 help desk – that frees up time too!
However you choose to free up your schedule, prioritizing high-impact activities and strategic planning will help drive your business forward. Just ask Greg Padgett, an MSP owner who joined The 20 back in 2018:
“When I met him [Tim Conkle, CEO of The 20], I had determined I was tired of just making myself a job; I wanted a business. Joining The 20 helped me to get out of that hole that I had built for myself, and be able to stand up above the company and look into it and see what needed to change, and make those hard decisions to make those changes.”
That’s what it’s all about, folks – getting out of the daily grind and assuming your rightful position as the visionary leader of your company.
It’s VISION Time!
If you enjoyed this piece, look out for the next installment in our 4-part blog series, Golden Rules for MSP Excellence. And don’t forget to register for VISION ’24, taking place next month (Aug 27-30) in sunny Dallas, TX.
The MSPs you’ll encounter at VISION are some of the most motivated, process-driven, and business-savvy companies in the game. Want to know what it takes to make it in this competitive industry? Come hang out with the best of the best at VISION ’24!
Beyond the Buyout
How The 20 Nurtures MSP Growth While Respecting Ownership Boundaries
Chances are, you’ve caught wind of The 20’s M&A activities. We’ve certainly been busy, acquiring several MSPs each month as we pursue our mission of building the first premier MSP with coast-to-coast reach.
But with all the press surrounding our rapid expansion and unique consolidation strategy, it’s easy to lose sight of what The 20 is really all about: not acquiring MSPs, but helping them grow and find success in our hyper-competitive industry.
In this blog post, we want to clarify a few things about our M&A strategy, and address a question that’s been coming up: Do we recruit MSPs to join The 20 simply because we want to buy them?
The 20 MSP vs The 20 MSP Group
The first thing to make clear is that The 20 MSP and The 20 MSP Group are distinct entities – and not just legally speaking, but conceptually as well.
The 20 MSP is an individual MSP. We want The 20 MSP to become the first MSP with extensive, coast-to-coast reach and premier service delivery.
The 20 MSP Group (aka simply “The 20”) is, on the other hand, exactly what it sounds like: a group of MSPs, all of them independently owned and operated. When MSP owners become members of The 20 MSP Group, they sign on to our way of doing business, but retain complete ownership of their companies.
There is, however, a strong connection between The 20 MSP and The 20 MSP Group. While The 20 MSP has recently expanded its acquisition candidate pipeline to include non-member MSPs, consolidation efforts have been focused primarily on member roll-ups. MSPs join The 20 MSP Group to conquer their biggest pain points and achieve new growth. When these MSPs reach a certain level of operational maturity and revenue, we offer them a proven exit route – selling to The 20 MSP!
This strategy helps us circumvent problems associated with a more traditional approach. More specifically, acquiring MSPs that share our tools and processes helps us all but eliminate attrition and post-deal friction – two notorious impediments to a smooth integration. We’re not interested in bringing together MSPs with disparate business models and operations, as we firmly believe that alignment is the key to long-term growth, and that The 20 MSP’s success hinges on preserving a single standard of excellence across the board.
This raises an important question: Do we recruit MSPs to join The 20 MSP Group simply because we want, at some point, to acquire those MSPs and integrate them into The 20 MSP?
Let’s talk about that.
To Acquire or Not to Acquire? – That is the Question!
Let’s start with the short answer. Do we recruit MSPs to join The 20 MSP Group simply because we’re looking for acquisition targets?
No!
A slightly longer answer: While the 34 acquisitions we’ve completed (at the time of this writing) might seem like a lot, the number pales in comparison to the 150+ MSPs that belong to The 20 MSP Group – and a good number of these businesses’ owners are interested in selling to us. In short, there’s no shortage of quality MSPs in our acquisition pipeline – especially now that we’re casting a wider net to include non-member MSPs.
To keep things clear, just remember that only the first of these two statements is true:
TRUE: The 20 MSP is particularly interested in acquiring MSPs that belong to The 20 MSP Group.
FALSE: The 20 MSP Group only accepts MSPs that want to be acquired by The 20 MSP.
The first sentence is one-hundred percent true. We’re definitely looking to acquire MSPs from our group for a very simple reason: We know these MSPs! They use The 20’s tool stack and business model, which makes integration relatively seamless and minimally disruptive for end clients. But, more importantly, we know the people at these MSPs. When we roll up a member, the question of cultural compatibility isn’t even a question.
Sentence #2 is, on the other hand, completely FALSE. In fact, when MSPs approach us about joining The 20 MSP Group, we’re not even thinking about M&A. For one thing, we have, as previously mentioned, plenty of MSPs ready to roll up.
Secondly, when an MSP first joins The 20, we often have no way of knowing if they will grow into an MSP worth acquiring.
And thirdly – and most importantly – creating acquisition targets just isn’t the point of The 20 MSP Group. The purpose of The 20 MSP Group is to help small and mid-sized MSPs grow, scale, and get to that next level – faster and more easily than they could on their own. We’ve worked extremely hard to create a formidable ‘MSP blueprint’ – a suite of tools and proven processes that reliably help small and medium-sized MSPs supercharge their growth and scalability. We don’t want to undermine years of effort by abandoning that core purpose.
OK, but what if an MSP becomes a member of The 20 MSP Group, and, as a result, achieves remarkable growth? Once an MSP gets big, do we start applying pressure and pushing them to sell?
Let’s talk about that.
Your MSP, Your Call
MSPs that become members of The 20 MSP Group tend to find success. That’s not a boast, just a fact. Our industry-leading tool stack, battle-tested business model, and above all else, our awesome community of supportive MSP owners – these things all feed into our members’ growth.
So, what happens when an MSP joins The 20 MSP Group and grows into a large and profitable company? Do we start hassling the owner about selling?
In a word – well, two words – H*LL NO!
In fact, it’s the opposite. We let MSP owners come to us. We keep our members in the loop about our M&A activities and intentions, because we want to know that selling to us is an option – if they’re interested in going that route.
But the most important word in the above sentence is if. We’re not interested in pressuring our members to sell – nor is it worth our time. Again, we have no shortage of acquisition targets, and if an MSP wants to remain a part of The 20 MSP Group without ever selling and joining forces with The 20 MSP, that’s A-OK.
In fact, we wouldn’t want to acquire all of our members as that would mean the end of the The 20 MSP Group! We’re incredibly proud of what the group has become – a genuine community of peers who actively support and help each other win.
Do we want to build a premier national MSP? Yes. Do we also want to keep growing The 20 MSP Group and providing small and mid-sized MSPs with the tools and resources they need to succeed? Yes! We aim to keep both projects going, and have no interest in sacrificing one for the other.
The Bottom Line
If you become a member of The 20 MSP Group, you’ll get an awesome tool stack, powerful processes for everything from sales to service delivery, and the warmest and most supportive community in the MSP space. What you won’t get is pressure to sell.
If you decide you want to sell your MSP, we have a proven process in place to acquire and integrate your company. But if you decide you don’t want to sell, we won’t try to change your mind. It’s your business, your call.
Discover the Gold Standard at VISION ’24
Our industry is at a turning point. Forces like AI and M&A are reshaping the managed services landscape. Some MSPs will thrive. Others will fall behind.
This year at VISION ’24, hundreds of top-performing MSPs are getting together to tackle the most pressing challenges MSPs face today. What does achieving the gold standard as an MSP look like in 2024? Find out this August at the MSP event of the year.
You don’t need to be a member of The 20 MSP Group to attend, but you do need a ticket – secure your spot at VISION ’24!
Should I Sell My MSP Now or Later?
Making Sure You’re Ready to Sell
In the first installment of this two-part series, we discussed the favorable market conditions that make now a GREAT time to sell your MSP. But market timing is only one piece of the puzzle.
It’s also important to establish whether your MSP business is ready to sell. Is your MSP ‘sellable’?
The short answer is that your MSP is sellable if someone’s willing to buy it. And no, we’re not being glib. It’s all too easy to forget that success in the world of mergers and acquisitions (M&A) boils down to one thing: connecting with the right buyer (or partner, in the case of a merger). Without this crucial piece of the puzzle, everything else is moot.
That said, there are some general factors that strongly influence an MSP’s appeal as an acquisition target. Let’s start with the obvious one: size.
Size Matters
So, what size MSPs are typically sold in today’s M&A landscape?
There’s no simple answer to this question, because different buyers have different requirements – sometimes markedly different.
Some buyers focus on growth and immediate profitability; this type of buyer will be on the lookout for MSPs that bring in serious revenue (at least $2 – 5 million annually), strong EBITDA margins, and a history of consistent expansion.
Other buyers might be more interested in acquiring smaller, less growth-oriented MSPs if they see strategic value, such as access to a new geographic market, unique talent pool, or specific client base.
Bottom line – Even if your MSP falls on the lower end of the revenue spectrum, your unique strengths can help you attract strong offers in the M&A landscape. So, don’t let the fact that you haven’t hit such-and-such a revenue threshold prevent you from even looking into entering the M&A arena.
But whatever your MSP’s size, the following characteristics are sure to impress any potential buyer of your business…
You ≠ Your Business
Your MSP is yours, sure, but that doesn’t mean you and your MSP should be essentially synonymous. You shouldn’t be your business. Wait, what? Let us explain…
A lot of smaller MSPs are more or less dependent on their owners to run smoothly. This can stem from insufficient documentation, or from the owner’s own inability to let go and delegate. Whatever the case, this high level of dependence is something potential buyers don’t want to see – in fact, it’s a huge red flag.
Think about it. If you are your MSP – i.e., if your clients’ loyalty and the integrity of your processes all depend on your direct involvement and presence – there’s a greater chance things will fall apart in your absence. Of course this is going to scare potential buyers!
Bottom line – To get your MSP ready to sell, make sure you have robust documentation and comprehensive processes in place, as doing so will help assure buyers that your MSP will continue to run smoothly under new ownership.
A Relevant Link
Looking for a shortcut to becoming an operationally mature, process-driven company? Consider joining The 20 MSP Group! We take small and mid-sized MSPs and equip them with proven and scalable processes that not only unlock serious growth, but also, impress potential buyers when it comes time to sell your company.
Potential buyers will scrutinize your books to evaluate your business’s health and potential, so make sure everything is in order. And we’re not talking in ‘pretty good’ shape either; we’re talking pristine.
Clear, accurate, and up-to-date financial records will not only help you secure a fair valuation, but also build trust with buyers and facilitate a smooth transition. So make sure your books are meticulously organized, as it will help lay the groundwork for a seamless sales process.
Diverse Revenue Streams
This one is straightforward. Buyers not only care about how much revenue your MSP pulls in, but also, where it comes from. More specifically, you don’t want all your revenue – or even most of it – to come from just one or two places.
It all comes down to risk. The more tied your MSP’s income is to just a few clients, the greater risk it poses to any potential buyer of your business. What happens if you lose one of your core clients? Potential buyers don’t want to find out.
For a more detailed, quantitative breakdown of ideal ‘revenue composition,’ download The 20’s free guide to MSP acquisitions: Sell Your MSP the Right Way.
Talented Team
People matter. Your MSP business isn’t just a collection of tools, processes, and revenue streams. It’s also a team of human beings who work together each day to bring your clients exceptional support.
If you’re thinking about selling your MSP, it’s important to keep in mind that your team – what they know and how they work – can be a major draw for interested buyers. Talented technicians are especially valuable in today’s market, where there’s a notable shortage of skilled labor.
Bottom line – If you have a talented technical team with great work ethic and a high level of dedication to client success, it can significantly enhance the value and attractiveness of your MSP to potential buyers.
Summing Up
While there are a number of qualities that make an MSP appealing to buyers, there isn’t a one-size-fits-all ‘profile’ for a sellable MSP.
Different buyers have varying criteria and strategic objectives, so what makes one MSP attractive might not apply to another. Factors such as operational independence, diversified revenue streams, and clean financial records are important, but the unique
strengths and strategic value of your MSP can also play a significant role in its marketability.
At the end of the day, our advice to MSP owners is to err on the side of exploration. Market conditions are so favorable at the moment, with an abundance of hungry buyers on the lookout for quality MSPs to acquire, that it’s worth investigating your options and assessing your MSP’s potential for sale.
Looking for expert feedback on your current exit strategy?Book an hour with Tim Conkle, The 20’s CEO and the visionary behind our unique M&A strategy.
Should I Sell My MSP Now or Later?
Making Sense of Market Trends
Let’s say you’re thinking about selling your MSP. You’ve put quite a few years into it, along with some blood, sweat, and tears, and now you’re thinking about getting out – ideally, with a nice paycheck in hand for all your efforts.
But should you sell your MSP now? Or, should you wait it out? Bide your time. Grow a little more…
This is a terrific question, and it couldn’t be timelier. M&A activity is once again on the rise. Actually, it has risen – and quite dramatically! MSP owners are approaching the table in droves in search of lucrative deals, driven by a large pool of interested buyers.
You’re of course tempted to get in on the action. But you’re not sure if it’s the right time. It’s such a big decision. You just don’t know –
Relax. Take a breath. And keep reading. You deserve some clarity, and while we can’t make the all-important decision for you, we can give you the information you need to make the right choice for your business and your clients.
In this first article in a two-part series, we’re examining the question of ‘now or later’ through the lens of market conditions. In part two, we will zoom in on what makes an MSP ‘sellable.’ Let’s dive right in!
Seize the Moment
Should you sell your MSP now? Assuming your MSP is ‘sellable,’ is now a good time to enter the M&A arena in search of a deal?
The short answer is unequivocal: All things being equal, now is a GREAT time to sell your MSP. The main reason comes down to basic economics and a little thing called demand…
After cooling off briefly in 2023, we are in the middle of another M&A hot streak projected to match if not surpass the buying frenzy a few years ago, which saw nearly 2000 deals closed! Right now, the market is flush with PE firms and large ‘platform MSPs‘ who are all salivating at the prospect of purchasing quality MSP businesses. MSPs make attractive acquisition targets for a number of reasons, which we go over in our free MSP acquisitions guide (get your copy).
Bottom line – Selling your MSP right now means taking advantage of near-perfect market conditions. Simply put, it can make you a pretty penny.
But what about…
You may still have some reservations. This is only natural. After all, you’re thinking about selling your MSP business, not lemonade on a street corner. Market conditions might be ideal, but what about…
What about, well, waiting? If M&A heated up in 2021 and 2022, cooled off in 2023, and once again heated up in 2024, can’t you just wait a little longer – till the next surge in M&A activity?
In theory, yes. But in practice, things aren’t so simple. For one, markets are inherently unpredictable. How many years will it be until you see an opportunity like this again? Do you have the energy to continue running your MSP for three more years? Five? Ten?
More importantly, M&A activity is so rampant, it’s literally changing the competitive landscape. As more and more MSPs get rolled up, we’re seeing larger and larger MSPs emerge – platform MSPs with never-before-seen resources and capabilities. And as these ‘super MSPs’ get bigger, so too will the MSPs they target for acquisition (in fact, this has already begun to happen). This means you will likely need to continue growing steadily to remain an attractive acquisition target further down the line.
You might be thinking, So what. I can keep growing. No problem…
While we admire your confidence, it’s important to know what you’re up against. Remember those super MSPs we mentioned a second ago? They’re your competition from here on out. That means if you want to sustain your current growth rate, you’re going to have to work twice as hard just to keep pace with these multi-state and even national enterprises.
This article does a terrific job of summarizing the challenges MSPs will face over the next ten years. Doing things on your own might have worked until this point, but times change, and making your exit now could be a timely way to avoid a very tough road ahead.
There are also your clients to think of. Is grinding things out on your own really what’s best for them? Getting acquired by a larger enterprise can mean getting access to crucial resources, better tools, more talent – all good things that can help your clients find success.
Does this mean you should sell to the first buyer that comes a-knockin’?
Absolutely not! Thoroughly vetting potential buyers is vital to securing the right deal for your MSP business. At the very least, a potential buyer should…
Demonstrate a track record of successful MSP acquisitions
Share your company’s values and vision
Offer a fair valuation and proof of financial backing
Commit to supporting your employees and maintaining operational continuity
Let’s talk feelings. Maybe you’ve determined that your MSP is worth selling. Maybe you’ve got a few interested buyers. Maybe you’ve even received an offer. But nevertheless, you’re not sure you’re ready. You don’t feel all that ready…
Look, we get it. Selling the company you built from the ground up is an emotional experience – and one of the biggest decisions of your life. You’re going to feel things. A lot of things.
But the truth is, you’re likely never going to feel completely, one-hundred-percent ready to sell, the same way most parents don’t ever feel totally ready to send their kids off to college. But when the time’s right, the time’s right.
This isn’t to say you should ignore your feelings. If you feel profound doubts about a particular potential buyer, for instance, listen to your gut! You don’t want to sell your MSP to the wrong buyer, because it could leave you with a raw deal and your clients up a creek.
But general nervousness about the prospect of selling your MSP is completely natural and to be expected. You’re only human! So let yourself feel – just don’t let your feelings stop you from seizing a golden opportunity.
A Unique Opportunity to Talk Strategy
It’s no secret that we’re involved in M&A here at The 20. In fact, at the time of this writing, we’ve completed over 30 MSP acquisitions – and we’re looking for more quality MSPs to join our growing team!
The secret to our M&A success is no secret – our approach makes things easy and brings unique benefits to MSP owners and their teams.
Want to learn more? Book a 1-hour meeting with Tim Conkle, CEO of The 20 and the visionary behind our unique consolidation strategy. Tim can walk you through what makes The 20 unique among M&A players, as well as provide you with feedback on your current exit strategy.
***
Stay tuned for the second installment in this two-part series, where we’re tackling the question of what makes an MSP ‘sellable.’ Till then, browse our freshly launched MSP acquisitions page for free resources and no-nonsense guidance.
From Owner to Employee: Navigating a New Role After Selling Your MSP
You’re selling your MSP business. Maybe you already have. Now what?
For some, the answer to this question is: relax on a beach, margarita in hand – or some version of that. And there’s nothing wrong with that! Selling your MSP business can be your ticket to a leisurely – and financially secure – retirement.
But what if you’re not ready to ride off into the sunset just yet? What if your passion for managed services still burns, and you want to continue working in the IT industry?
Nothing wrong with that either! Plenty of MSP owners have entered the mergers and acquisitions (M&A) space with no intention of retiring or even leaving the IT sector.
If you’re looking to sell your MSP but not exit the industry – or if you’ve already sold your company and now find yourself in a new role – you’ve come to the right place. In this article, we’re discussing how to make the most of your transition from owner to employee after the sale of your MSP business.
Our focus will be on situations where you join the team of the company acquiring yours. That said, if you’re pursuing a position elsewhere in the industry, a lot of the advice will still hold value.
Let’s jump right in!
Why Stick Around?
Let’s start with a basic question: Why do some MSP owners choose to sell their businesses without subsequently exiting the industry?
Here are some of the more common reasons…
Sweet Deal
Some MSP owners approach the table because they’ve found the ideal buyer – or an offer that’s simply too good to pass up – and not because they’re feeling burned out or ready for retirement. This isn’t uncommon, as the M&A market has once again heated up in 2024, with many interested buyers competing over high-performing MSPs.
All things being equal, it’s a great time to sell an MSP! If you play your cards right, you can make your exit with a big paycheck in hand.
Staying Alive
Some MSP owners strike deals because they’re thinking ahead and anticipating the difficulty of remaining competitive without adding new services, skills, etc.
According to Datto’s Global State of the MSP Report, for the third consecutive year, MSPs worldwide cited competition as their primary challenge, with 35% highlighting it, up from 29% in 2022. Finding a competitive edge is more crucial than ever, and consolidation offers ambitious MSP executives a promising route to securing an advantage by ‘leveling up’ their services, teams, and market reach.
Ready for Help
Finally, there are those MSP owners who are looking to sell because they’re tired – tired of running the show and having to wear all sorts of ‘hats’ just to keep their companies afloat. Some of these executives really enjoy a particular aspect of running an MSP (e.g., sales or operations), and want to focus on doing that one thing extremely well.
Selling offers these entrepreneurs a promising route to a more manageable work schedule, as well as a more specialized role that allows them to focus on what they enjoy doing and know how to do well. Come to think of it, becoming a member of The 20 helps with those things, too!
From Owner to Employee
Bottom line, there are plenty of good reasons to sell your MSP without the intention of retiring or even leaving the industry.
So, let’s get into the meat of our discussion: making a successful transition from an MSP owner to an MSP employee.
This blog post accompanies a short video featuring former MSP owners now thriving in new roles at The 20. Check out the video to hear their firsthand accounts of the transition “from owner to employee.”
What makes for a successful transition from MSP owner to MSP employee? Let’s start with a simple but illuminating answer:
If your plan is to keep going, you need to set yourself up to do exactly that – keep going.
Think about it. You’re not retiring. You’re not even changing industries. You’ve decided to remain a managed services professional, albeit in a new role. So, it’s important, for your own wellbeing – both professional and personal – to put yourself in a position that you find energizing and fulfilling. This is especially crucial if the reason you’re selling in the first place is fatigue, or even burnout.
But how do you do that? In practical terms, what is the best way to ensure that you find fulfillment in your new role?
After completing numerous MSP acquisitions (thirty-three at the time of this writing), we’ve witnessed plenty of MSP owners make the transition from owner to employee. Seeing their journeys has taught us a lot about what a successful transition involves.
And now we’re sharing key lessons with you…
Work Your Magic
After years spent running an MSP business, you probably have a pretty good idea of what you’re good at – and not so good at. You also likely know which aspects of the job bring you the most enjoyment.
In the short video, you’ll meet Gary Blawat, who loves MSP sales. You’ll also hear from Kevin Peterson, a self-proclaimed “operator at heart.” After selling their MSPs to The 20, Gary and Kevin took on new roles within the company which allowed them to focus on sales and operations respectively.
When pursuing a new position post-sale (and negotiating its terms), we recommend that you follow in Gary and Kevin’s footsteps and find a role that allows you to work your magic. Doing so will make a huge difference when it comes to staying motivated and engaged. Just ask Kevin:
“I’m able to focus most of my time on doing what I’m really good at and what I love doing. I get up every morning and I know I’m making a difference … I love what I’m doing.”
Shared Vision
Tim Knarr sold his MSP to The 20 back in 2022 and is now doing big things as our VP of Regional Operations. In the video. Tim talks about “the dream” of The 20 – the dream of the billion-dollar MSP. It’s a dream he believes in and feels connected to.
This brings us to another important point about securing satisfaction in your post-sale role: in addition to landing the right role, you’ll also want to join the right team.
More specifically, you should strive to become part of a team with goals and a long-term growth plan that excite you. You’re committed to sticking around after selling your MSP, so it only makes sense to join a company that’s not only going places, but places you want to go.
If you’re planning on working for the company that acquires your MSP, picking the right organization means picking the right buyer, and that begins with thoroughly vetting any potential buyer (for tips on vetting buyers and much more, make sure to download our free MSP acquisitions guide, “Sell Your MSP the Right Way”).
Invest to Stay Invested
Landing a role that lets you focus on what you like doing, joining a team whose vision you share – both of these things will help you remain engaged in your new role. But you know what will really help you stay invested?
Investing!
After selling your MSP, you can take a portion of the proceeds from the sale to purchase shares or equity in the acquiring company, giving you a vested interest in the combined entity’s success.
That’s a big part of our deal structure here at The 20. In the video, you’ll hear from Caleb Brown on the value of being a shareholder, and how it gives him a robust “sense of ownership with what we’re building now” – a national MSP with premium service delivery! It also doesn’t hurt that these owners-turned-shareholders will get a ‘second bite of the apple’ further down the line if and when The 20 gets acquired.
For a closer look at The 20’s approach to acquisitions and how it compares to some other prominent M&A players’ strategies, check out this excellent article from Channelholic.
Balancing Act
Perhaps the most profound observation from our interviews with MSP-owners-turned employees came from Michael Vu, who spoke about finding a healthier work/life balance after the sale of his MSP business.
Michael, like almost all of the MSP owners who sell to The 20, chose to remain on board in a new leadership position. He’s since discovered that he has, in his new role, a lot more time to spend with his family. Making room for family – for life – can be hard
when you’re captain of the ship. As Michael points out, “when you’re running your business from top to bottom, it takes ninety-nine percent of your energy and focus.”
Word to the wise: finding a more suitable work/life balance after selling your MSP can be easier said than done. After spending years at the helm of your company, you’ve likely grown accustomed to the perpetual grind. Just know that it can be difficult to adopt a new mindset once you’ve sold your MSP. However, doing so can work wonders for your overall wellbeing.
Remember, you did something special – you built and sold a company! Take time to savor your achievement, and be wary of falling back into the same relentless pace that defined your days as an owner.
Wrapping Up
Selling your MSP is a big decision – one of the biggest decisions you’ll ever make. It can also mean a transition to a new role. In our experience working with MSP owners who make this jump, it’s not so much stepping back as it is stepping up.
You’re stepping up to a new challenge. You’re seizing an opportunity to focus on what you’re good at and enjoy doing. You’re getting access to a larger team with better tools and processes to help your clients thrive.
This isn’t a demotion however you slice it. It’s the next chapter of your story, and it’s brimming with potential. So embrace your new role, because there’s a good chance the best is yet to come.
Need Some M&A Guidance?
If you’re thinking about selling your MSP or entering a merger, we’re here to help.
Check out our revamped guide to MSP acquisitions, “Sell Your MSP the Right Way” for practical advice and proven tips. Get your free download today.
Looking for direct feedback on your exit strategy? Set up a 1-hour call with Tim Conkle, Founder and CEO of The 20 and leading expert on MSP acquisitions.
Happy dealmaking!
AI in the MSP Space
Part One: Helping Clients
A lot of MSPs have AI on the brain – and how could they not? The AI revolution is for real. And MSPs are uniquely positioned to ride the AI wave and to help their clients do the same.
But figuring out your MSP’s path forward is tricky. Things are unfolding in real time, and they’re unfolding at breakneck speed! If you’re looking for some guidance – some clarity amidst the chaos – you’ve come to the right place.
In this two-part blog (stay tuned for part two), we’re breaking down the state of AI in the MSP space. In this first installment, we’re looking at how MSPs can help clients harness AI effectively and responsibly. Part two will deal with the implementation of AI within your MSP business.
What to Expect (and Not to Expect) from These Articles
If you’re looking for a step-by step, foolproof AI implementation plan, sorry. We’re not withholding such a thing; it just doesn’t exist!
If you’ve been talking to other MSPs or perusing online forums, you’ll have noticed that MSPs are approaching AI very differently – and with very different attitudes. On one end of the spectrum, you have the gung-ho early adopters, and on the other end, you’ve got the skeptics and naysayers.
Most MSPs are somewhere in the middle, trying to make sense of things and chart a course forward. So if you’re excited about AI, but not sure what steps you should be taking, you’re not alone!
And while we can’t give your MSP all the answers in regard to AI adoption and implementation, we can point you in some promising directions, clarify the current lay of the land, and help you start formulating a strategy for your MSP business.
What Makes AI Different – and Right Up MSPs’ Alley
To begin, let’s talk about what makes AI special. It’ll be illuminating to compare it to a recent technological advancement: cloud computing. There are interesting similarities between cloud computing and AI, but we’re going to focus on a key difference:
The benefits and power of AI are obvious, self-evident even. The benefits and cloud computing are not.
As someone who works in IT, you know all too well that moving data to the cloud is, all things being equal, a good idea. You understand how cloud computing offers businesses a more scalable, agile, and cost-effective data storage solution. However, getting your clients to understand this and embrace the cloud is a whole different animal (which is why we have a blog post devoted to the topic).
With AI, the challenge is almost the inverse: clients are going to be eager to adopt AI, since the power of AI is so undeniable, so obvious. A lot of us had a similar experience using ChatGPT for the first time, OpenAI’s groundbreaking Large Language Model (LLM): This thing is incredible! The idea that businesses are going to embrace AI much more quickly and easily than cloud computing isn’t just speculation either:
ChatGPT was the first tech application to acquire 100 million distinct users in just two months. And get this: in a recent survey of 1,000 small business owners, an overwhelming 91% reported increased success following the implementation of AI.
Individuals and organizations will use tools that make their lives easier. Your job, then, as an MSP, isn’t going to be convincing clients to use AI, but rather, helping them do so responsibly, effectively, and efficiently. This brings us to…
MSPs as AI Guides
As an MSP you don’t just ‘fix your clients’ computers.’ You act as a trusted advisor, delivering strategic advice to help clients align their technology investments with their business goals.
If there were ever a perfect opportunity to prove your worth as an advisor, it’s in guiding clients through the adoption of AI technologies. In particular, MSPs should prepare to offer guidance in the following areas:
LLM ‘Tuning’ and Customization
LLMs are incredibly powerful and useful tools, but they’re not one-size-fits-all. The true power of an LLM is unleashed through what is known as “fine-tuning” or simply “tuning”: refining a pre-trained LLM’s capabilities and improving its overall performance by training it on smaller, specialized datasets (i.e., data specific to a client business).
Forward-thinking MSPs are going to master the art of tuning, so that they can equip their clients with LLMs that produce accurate, tone-appropriate content at the click of a few buttons.
But do organizations really need help with this?
Big time! A recent survey from Predibase polled executives, data scientists, developers, and other key decision makers and found that only 11% had successfully fine-tuned an LLM and been satisfied with the results. A whopping 78% had not, with 44% citing “complexity” or a “lack of knowledge” as the reason why. Did someone say, “Golden opportunity for MSPs”?
Data Security
AI introduces a host of new vulnerabilities and data privacy concerns. For instance, if a client is using an LLM, they need to make sure their data is properly organized and tagged.
This is where your MSP can come to the rescue – in helping your clients prepare their data for AI intervention. This means, among other things, structuring their data such that an LLM, or some other AI system, won’t reveal sensitive information to the wrong parties.
And you’d better believe clients are looking for help with data security in AI implementation. The aforementioned Predibase survey found that 33% of respondents listed “giving up access to proprietary data” as a top challenge preventing them from using LLMs in production. This was the most commonly listed top challenge, with second place going to “customization and fine-tuning” at 30%.
So if your MSP can help clients leverage and customize LLMs and other AI tools without compromising data security, it will help you stand out and your clients gain a competitive edge. Win-win!
Microsoft Copilot
Last November, Microsoft made its own AI-powered chatbot available to enterprise customers. Copilot is designed to help businesses enhance productivity and streamline workflows within the Microsoft 365 ecosystem.
MSPs stand to generate some serious revenue by guiding clients through the implementation and management of Copilot. Getting the most out of Microsoft’s new AI tool takes real work: creating a robust data strategy at the outset, ensuring security through proper access controls, and implementing safeguards for long-term maintenance.
AI adoption is a tricky business. There’s no way around that. The technology is new, powerful, and bursting with untapped potential. And because no two businesses share the exact same needs in regard to AI adoption, how well your MSP fulfills its role as trusted advisor will depend largely on one thing:
How well you know your clients’ businesses – how they operate, what they value, and what they’re trying to achieve.
The full force of AI as a business tool stems from the technology’s high level of adaptability and customizability. The only way to tailor an AI strategy to fit your clients’ specific needs is to understand those needs in the first place. Translation: talk to your clients! This isn’t something AI can do for you – not yet at least. It’s a human thing, and it’s crucial to your success as a trusted source of AI wisdom.
Conquer AI through Collaboration
The AI industry is exploding in size and complexity, and MSPs trying to figure things out for themselves have an uphill battle. But imagine being able to tap into the expertise and experiences of hundreds of MSPs, a whole community of companies who share knowledge and tips as freely as old friends trading tales around a campfire…
That’s exactly what it’s like to be a member of The 20 MSP Group. We’re stronger together, and we win together. To learn more about the powerful benefits we bring our MSP members, schedule a call today.
Thanks for reading, and stay tuned for part two, where we’ll look at how your MSP can leverage AI to improve operations and elevate service.
