In a perfect world, every business would succeed and fail based solely on the skill set of those operating them. Yet the world isn’t perfect, is it? My favorite neighborhood Italian restaurant, for example, just shut down after only two years. How is it that some of the best tasting food I’ve ever had in my life wasn’t enough to bolster them to national fame, let alone allow them to simply keep their doors open? To add insult to injury, they were replaced by a lackluster chain restaurant that’s had zero issues filling its seats ever since.
In the MSP space, this scenario plays out almost identically.
If You Can’t Sell, You Can’t Grow
Early on in my MSP days, every time I’d win a new contract, I knew I was winning bids against other MSPs who had far more technical acumen than me. Yet, that didn’t matter at all. If it did, that money would have been in their bank accounts instead of mine.
The sad truth is that it’s not technical acumen that grows an MSP—it’s sales acumen. If you can’t sell, you can’t grow (see my book, So You Want To Be An MSP). If you can’t grow, then you’re likely one of the thousands of MSPs that find themselves in the same situation. No matter how much time, effort, and resources you put forth, your earnings never seem commensurate with your technical prowess.
You Need To Shift To A Sales Mindset
So, does this mean that you suck at life, and you’re doomed to failure and will become just another small-business statistic? Absolutely not. What it does mean, however, is that what you currently value most in business likely requires a shift in mindset. That starts by asking yourself a single question: Are you running your business with a tech-driven mindset or a sales-driven mindset?
As an MSP you wield one true asset: Your time. Nothing can be accomplished in this space without first selling your time. This means there is nothing more paramount to growing your business than evaluating how you are spending that time.
Have you spent the majority of your time refining processes, updating scripts, and tweaking automations until they’re just perfect? The harsh truth is, if you have been investing your time in automating processes in hopes of saving more time down the road, or focusing on other operational aspects of your business (like your RMM and PSA platform) in hopes of saving some money, then you are operating under a tech-driven mindset. This is especially true if your MSP is just emerging; meaning you have six employees or less, yourself included. This means you are leaning into the familiar, the known, the area in this world you feel most comfortable operating in. This is your tech-driven nature.
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Time Is Your X Factor
No MSP business owner wants to feel like they’re a salesperson. I get it. Really, I get it. But a sales-driven mindset doesn’t mean that you need to forgo everything you’ve learned up until this point. It simply involves reevaluating how you approach varying aspects of your business.
For example, imagine you are bidding for two equally sized offices. Each has 10 employees, each with their own workstation, and everything else runs smoothly in the cloud. A tech-driven mindset would likely say, “OK, I charge a fixed price of $150 per endpoint (or per employee), so I’d bid each at $1,500.” What’s so complicated about that, right?
However, a sales-driven mindset doesn’t have enough information to solve that equation. This is because you haven’t introduced the notion of time yet. If you walked each location, what would you see? Is there custom software that you’re expected to maintain at one location, but not the other? Is the average employee’s technical acumen drastically different between the two offices? Does one operate 12 hours a day while the other operates for eight?
How much time do you estimate each office will consume each month is the equation, and you should bid accordingly. Meaning, if you believe one office will consume 10 of your available hours each month, while the other would consume 20, in what world should those two offices be considered equal?
Not All Money Is Worth Going After
Now, a tech-driven mindset might be wondering, “If I bid on one office at twice the rate of the other, I’ll likely lose that bid.” And you know what? You’re absolutely right. That’s because not all money is worth going after. An MSP with a sales-driven mindset acknowledges that not all contracts are worth pursuing if they aren’t profitable in the long run. Let some other MSP close them at subpar effective rates.
A sales-driven mindset would tell you that your time is finite and how you allocate it directly impacts your profitability. If you run out of hours in any given week you can’t instantly put more back on the shelf. Once you’re out, you’re out—at least until you’re forced to buy more through acquiring another technician. So, when you sell those hours, you need to make damn sure you’re doing so at an appropriate rate. The only thing worse than signing an unprofitable contract is being stuck with it for 12 or more months, offsetting your otherwise profitable contracts.
Sadly, the best tech-driven processes in the world can’t get you out of situations like this. If I sign a contract for 10 hours a week and you sign a similar contract for 20, it might appear on paper that my MSP is effectively earning the same contract value ($1,500) as yours, but our effective rates (contract value divided by hours consumed) are wildly different. I’m earning an effective rate of $150 an hour on my contract, while you’re earning just $75 an hour on yours. This discrepancy becomes even more apparent once I go off and acquire a second office just like the first, because now I’d be making twice what you’re making while consuming the same amount of time.
Grow Your MSP Exponentially Faster Than Your Competitors
There is nothing in this world even remotely as valuable as your salable time. Every ounce of available time should be dedicated to selling and growing, not refining and retaining. If you want to know how some MSPs grow exponentially faster than others, this is how. This is always how.
So, ask yourself, do you want to run your business with a tech-driven mindset, or a sales-driven one?
