I recently had a great conversation with my good friend Stuart Selbst. Stuart and I have more in common than just our name - like me, Stuart spent years running a very successful MSP. And, just like me, after many years, he had another calling. He took his experience, passion and his best talents and grew a new, successful business. Stuart now owns Your Remote COO where he acts as a virtual Chief Operating Officer for a number of businesses. (For me, marketing was my passion - I took my experience running a successful MSP and formed Ulistic to help other MSPs market their businesses.)
Stuart takes his passion and knowledge of operations and brings them to other companies. He "loves" operations and believes it's what drives every business. It's the job that no one wants to do because you have to deal with all the "minutia." He says that people often have great ideas, but they don't have the skill (or desire) to manage all the details.
What Stuart's good at is putting those ideas into motion. He deals with finance, HR, and vendors. He puts together Standard Operating Procedures (SOPs), streamlines processes, improves efficiencies and productivity, and fits all of this into a "box" that grows revenue without the need to invest in additional marketing and sales. Stuart built his business model around this. As a result, he's helped his clients double their annual revenues.
He can do all these things remotely using Microsoft Office 365. He doesn't need to be in his clients' offices all the time. As a result, he can do this more cost-effectively than businesses hiring a full-time COO. This saves his clients $165K a year on average.
What Stuart really enjoys is looking at a client's P& L statement and seeing that he's reduced their expenses and increased their profits. It makes his clients happy and makes him happy.
He loves seeing the positive changes he can make in a business.
Operational Challenges for MSPs
Stuart says that most MSP business owners don't understand their businesses – meaning they don't understand their P&Ls, finances, labor rates, and the cost of delivering services. Nor do most of them have documented SOPs. They try to run the business themselves, which, in the end, only holds them back. Most MSP owners are good at tech, but not so good at running a business. The challenge is first realizing this and letting experts do the "heavy lifting" where operations are concerned.
His advice? "Step back and get out of the weeds." This is how to win. You must have an operational foundation in place to succeed.
The Importance of Marketing & Sales from an Operational Viewpoint
Like me, Stuart is a big fan of tracking. He advises that you track your marketing dollars against your ROI. Marketing and operations go hand-in-hand. From an operational standpoint, you must track your marketing, and where dollars are going. Without this, you can't accurately assess the return on your investment. You must know where to best reinvest your marketing dollars.
Marketing is the precursor to sales. Your marketing team creates activities for your salespeople to follow up on. Similar to marketing, your sales team must work with operations to ensure that what they sell can be delivered. Operations are the salesperson's support team - if your salespeople don't communicate with operations, something will fall through the cracks. For example, if your best salesperson goes out and sells a bunch of services that can't be delivered efficiently, you'll lose money. Operations are more than administration - they ensure you're doing everything you must to keep your business afloat.
Build an SOP
Document everything, review it and compile SOPs. Put them in a binder, on the computer where they're accessible. You must have a place to document your policies and procedures. For example, "This is how we build servers", "How our call flows go", "How we troubleshoot", etc. Bring your staff into this process. One person should be in charge of updating the SOPs – staff members can contribute their procedures to this person.
Once you do this, you can work on being operationally efficient because now you can see what's "broken" and fix it. Maybe you're employee-heavy and client-light. Maybe you're not charging clients enough. When you see where you are and know where you want to go, you'll recognize what needs to be changed.
Are You Operationally Failing?
Are you struggling operationally, and, if so, where? Are your employees getting burned out? Are you losing clients? Are you stagnant and not growing? Are you surveying your clients? Look at how you're treating them - once you engage with your clients and partner with them, you'll find more opportunities to increase revenue.
Do You Need Help?
This is the tip of the iceberg — Stuart has a lot more knowledge to share and welcomes your questions. If you or a client could use his expertise, shoot him an email at info@yourremotecoo.com. He's always happy to help.
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