Hitting the million-dollar mark is a huge accomplishment for any MSP—which makes it all the more impressive that Intelligent Technical Solutions (ITS) has done that 50 times over. Tom Andrulis, CEO of ITS, an MSP headquartered in Las Vegas, Nevada, achieved this with hard work and adaptability, learning from his mistakes as he grew.
Here are some of the key lessons he learned along the way.
Check the Cash Flow
A critical component of building any MSP is maintaining profitability, but a $50 million MSP like Andrulis’ is on a whole other level. For Andrulis, cash flow is king. “I want to see consistent cash flow; it’s just my brain,” he says. “If I don’t see the cash flow, then I start getting really anxious and nervous.”
When establishing his financial processes, Andrulis needed a simple way to verify that ITS was on track. “What worked for me was percentages,” he explains. “You’ve got 100% of revenue; if you want 20% [more], look at how you’d run the company with just 80%. It got me to the point where I knew I could spend 5% on marketing and 12% on sales,” for example. “If those percentages got off track, then I could just zero in and figure it out,” he says.
“At the end of the day, I had to make money. That was it. Not making money wasn’t an option for me,” Andrulis says. That said, correcting course when the financials weren’t on target was a lesson Andrulis had to learn along the way. “I was losing money, crossing my fingers, and praying something happened,” he says. “I’d get down to my last $20,000 and freak out, and [lay off several employees]. I don’t [wait until the last minute] at this point; the business as a whole is more important than trying to save myself from a hard conversation.”
“It was a mess,” says Andrulis. “Now, we look at things and dig into it when things are off-track. I don’t really make rash decisions [like that] anymore.”
Hitting That First Million—with Marketing
When asked his advice for other MSPs looking to hit their first million, Andrulis says he wishes he started marketing sooner. “Marketing’s interesting; you spend a lot of money on it, and it could get you nothing or you could actually get some returns. But the one thing is if you’re not [marketing at all], you’re definitely not getting returns,” he says. “If I knew how to market originally, I probably could have gotten that first million faster—because I got my name out [there].”
“It really comes down to, how many people in the world know about me, and how many people have a problem I can solve?” says Andrulis. “The sooner and more consistently I can market, the better. You never know who’s going to respond. You need to send [your marketing materials] at the right time for [the prospect], and you don’t know when that is. We just have to put ourselves out there to be available to capture that opportunity.”
Before he was working with a big marketing budget and team, Andrulis relied on direct mail campaigns to bring leads in. “There were times when it was make or break for me,” he says. “I just started sending out two or three thousand letters every month. It didn’t take a lot of time for me. It did cost money. I was only getting three to five responses a month, but that’s all I really needed. I only needed to land one or two clients for it to make sense to keep going.”
Today, ITS uses in-person events, webinars, and a newsletter in addition to direct mail campaigns.
Keep Culture Simple
Culture is the glue holding any business together, says Andrulis. But it doesn’t happen in a vacuum. “Every group of people [interacting together] has a culture, whether it’s identified or not,” says Andrulis. “The question is, is it the culture we want? Is it the culture that’s going to allow us to succeed? If it is, we need to identify it and be super clear about it; then, we can start hiring and firing by it, and having conversations around encouraging people to behave a certain way.”
He continues, “This business is all about solving problems, but we don’t want to make our lives miserable while we’re doing it. I want everyone to be happy; we shouldn’t have to go to work miserable. [I want it to feel] like we’re part of something that’s delivering a good experience for the client.”
To codify his ideal culture, Andrulis identified 10 core values. The trouble was, none of his staff could remember them all. “I walked into our daily huddle one day and offered anyone who could name all 10 $100. Nobody could do it,” he says. “I realized 10 core values is too many for people to remember and internalize.”
Andrulis then cut the list of core values to five, then consolidated those into three. “There were a couple that were a bit like the other ones,” Andrulis says. “In my mind, simplified is best. I’m always trying to simplify everything I do; if there’s less complexity, there are fewer things for people to remember. Fewer things that could break.”
ITS’ daily huddles include time for someone on the team to share a story that exemplifies one of the core values. “It helps people remember them,” says Andrulis. And more than that, it transforms the core values from words on a wall, to a critical part of the fabric of ITS’ culture.
Related: Culture and Trust: The $1M Growth Formula for This MSP
Want More?
In his recent appearance on the MSP Success My First Million podcast, Andrulis shared all these tips and more, including his journey to $50 million, hiring a stellar leadership team, mastering work-life balance, and the value of peer groups.
To hear more, tune into Andrulis’ full podcast episode here.
