Greg Kroeker established his first MSP, Genesis Networks, in 2002 with the goal of providing his clients with quality, business I.T. support and service. He was a pioneer in the provision of rural wireless technology, and one of the first broadband Internet Service Providers to bring wireless service to homes and businesses. In 2007, Greg moved I.T. Services from Genesis to Stream Networks, Inc. And finally, in 2008 merged with two other companies to form the MSP he runs now, Shield Networks.
Shield Networks is one of our great clients, and Greg suggested I read a book entitled Built To Sell by John Warrillow. According to Mr. Warrillow:
“Most business owners started their company because they wanted more freedom—to work on their schedules, make the kind of money they deserve, and eventually retire on the fruits of their labor.
Unfortunately, most owners find that stepping out of the picture is tough because their business relies too heavily on their personal involvement. Without them, their company—no matter how big or profitable—is virtually worthless.
But the good news is that entrepreneurs can take concrete steps—no matter what stage business is in—to create a valuable, sellable company. Warrillow shows exactly what is required to build a stable business that can thrive long into the future.”
Greg and his partners wanted to spend more time pursuing other challenges and turn the hands-on running of Shield Networks over to their capable employees. But what they found was that there were areas where their employees just couldn’t replace them.
I hear this time and time again from our MSP clients. They want to know:
How Can I Create a Business That Can Run Without Me?
If you couldn’t sell your business because there’s too much of you in it, then something needs to change.
Ask yourself these questions:
- What are your products/services?
- Is there a unique market for them?
- Can you teach your employees to provide them?
- Define what’s repeatable—can you get recurring revenue contracts (or subscriptions) from them?
Map out your products/services on an X/Y axis, where X is teachable, and Y is how valuable they are to your customers. Review the graph with your executive team. You may just have one product or service that is worth teaching to your employees. Narrowing your focus will help you with your decision making.
After going through the first two steps, Greg and his partners decided that cyber security was at the core of their practice. They partner with good, reliable platforms and have great success. All three owners have technical backgrounds and love networking (in a digital sense). They are distressed to see so much hacking occurring. They believe that Data Backup and Recovery Solutions are the new frontiers to fight against this threat. Plus, they knew their customers needed proactive solutions to prevent cyber threats.
Greg and his partners are currently working on the final steps. (Note: It’s important that you identify and narrow down your target market before you take on the next steps.)
- Hire a Sales Team to Sell Your Product/Service. If you believe in your core practice, it’s time to invest in it in terms of time and money. This doesn’t mean you have to give up your entire MSP practice. You need the cash flow from this to invest in your new one. Time will tell, as it always does if they can commit to cybersecurity as their primary source of income. For now, even two sales people would be enough as long as you have someone to manage them, and you believe they are the best fit to sell your product/service.
- Stop Selling Everything Else. This is the scary step. The transition is always painful, but to continue with the status quo as an MSP that does what everyone else is doing may cost you more in the end. The future in this sector is specialization. Decide what makes you unique and go after that market area. For example, some of our most successful clients are doing nothing but HIPAA consulting, and they are doing very well. Others serve only law practices. The deals that come in are bigger and better than what they were achieving as an MSP. These companies outpace their peers because they are viewed as subject matter experts in their field. When the word gets out, business just rolls in. Plus, marketing is easier when you can focus on just one target audience.
- Now—Focus on Selling Your Company. This is where you’ll make the big bucks!
(One last note, if you are the sole owner of your MSP, find a mentor who has done this before. It doesn’t have to be someone in your field. But, unless you have partners that you can run ideas by, you need a trusted and experienced individual who you can talk to.)
We know this is a big challenge. Stuart at Ulistic has direct experience with this himself. He’s the perfect mentor for those of you who would like to move on to bigger and better things!