How to Grow from a One Man Operation to Two
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Somewhat off topic... I have read many posts on here about going from 1 person to a 2 person shop. It's very hard. I would think that one thing as a business owner could do is to bring on a partner (vs. just employee). Then they have skin in the game... I'm not willing to go back and have a 'boss' after being my own boss. (Unless I have to) But I also can't go alone so I need to grow. Not an easy task by any means.
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It is an extremely hard thing to do, for sure. Almost no companies manage to make the leap. The majority of larger firms started larger. There is no organic path from one to two people in the MSP game.
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Bringing on a partner is really hard, because how do you handle it? Do you make them buy you out at 50%? That's a huge, and often pointless, risk for them to take. Do you just give them a huge portion of your business? That's a huge risk for you. Do you merge with another one man shop? That is the better option, but is hard because you are unlikely to be evenly matched in skills, rates, customer base, etc.
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Hiring staff is generally the best path. But requires huge financial commitments and risk. Often MSPs take out loans to be able to do this. This is also the point when most MSPs fail.
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So essentially unless you have a large amount of capital, the small I.T. business owner is pretty much screwed?
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@ccwtech said in How to Grow from a One Man Operation to Two:
So essentially unless you have a large amount of capital, the small I.T. business owner is pretty much screwed?
Yes, because if it didn't require a huge risk and venture on your part, any person you are hiring could have gone out and been their own boss, too. You have to offer something to the would-be employees. Presumably, that is salary before work exists. If they were willing to only be paid when they could drum up work, they could do that without working for you.
You have to bring something to the table and, in most cases, it is that you bring a history of customers, clout, experience, skills, and you take on the risk while they bring the willingness to work for someone other than themselves, their own skills and experience, etc.
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I have more business than I can handle, so right now I am in a pretty good spot. Hopefully that 'eases the pain' somewhat.
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@ccwtech said in How to Grow from a One Man Operation to Two:
I have more business than I can handle, so right now I am in a pretty good spot. Hopefully that 'eases the pain' somewhat.
Enough to cut everything in half and still be good?
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@ccwtech said in How to Grow from a One Man Operation to Two:
I have more business than I can handle, so right now I am in a pretty good spot. Hopefully that 'eases the pain' somewhat.
Well, of course, you don't want to grow to more people when you have less business than you want
Some companies get lucky, having a single new customer come on that needs ~80% of a new person, enough that you can pay them with minimal risk, but not so much that you can use them to help you pivot to more work. Once you break the barrier, each new person is easier than the last. But each one comes with some cost and risk, it's just less and less. The cost and risk of the first one are the hardest to absorb. -
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
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@ccwtech said in How to Grow from a One Man Operation to Two:
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
Yeah, probably too long. But the longer you do it, the more time you have to bank the money to pay the next person with less risk.
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@scottalanmiller said in How to Grow from a One Man Operation to Two:
@ccwtech said in How to Grow from a One Man Operation to Two:
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
Yeah, probably too long. But the longer you do it, the more time you have to bank the money to pay the next person with less risk.
Yeah, you have to either be prepared to get a loan to cover their salary, or have it in the bank already. You might find your own salary going down, possibly significantly, while you continue to grow the business.
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@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@ccwtech said in How to Grow from a One Man Operation to Two:
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
Yeah, probably too long. But the longer you do it, the more time you have to bank the money to pay the next person with less risk.
Yeah, you have to either be prepared to get a loan to cover their salary, or have it in the bank already. You might find your own salary going down, possibly significantly, while you continue to grow the business.
Yes, I saved enough that if 0 dollars come in I would still be able to operate for over a year.
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@ccwtech said in How to Grow from a One Man Operation to Two:
@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@ccwtech said in How to Grow from a One Man Operation to Two:
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
Yeah, probably too long. But the longer you do it, the more time you have to bank the money to pay the next person with less risk.
Yeah, you have to either be prepared to get a loan to cover their salary, or have it in the bank already. You might find your own salary going down, possibly significantly, while you continue to grow the business.
Yes, I saved enough that if 0 dollars come in I would still be able to operate for over a year.
Paying yourself and an employee? If so, that's awesome, sounds like you're nearly read to make the jump to your first employee.
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@dashrender said in How to Grow from a One Man Operation to Two:
@ccwtech said in How to Grow from a One Man Operation to Two:
@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@ccwtech said in How to Grow from a One Man Operation to Two:
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
Yeah, probably too long. But the longer you do it, the more time you have to bank the money to pay the next person with less risk.
Yeah, you have to either be prepared to get a loan to cover their salary, or have it in the bank already. You might find your own salary going down, possibly significantly, while you continue to grow the business.
Yes, I saved enough that if 0 dollars come in I would still be able to operate for over a year.
Paying yourself and an employee? If so, that's awesome, sounds like you're nearly read to make the jump to your first employee.
Yep... and I did it 2.5 weeks ago.
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@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@ccwtech said in How to Grow from a One Man Operation to Two:
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
Yeah, probably too long. But the longer you do it, the more time you have to bank the money to pay the next person with less risk.
Yeah, you have to either be prepared to get a loan to cover their salary, or have it in the bank already. You might find your own salary going down, possibly significantly, while you continue to grow the business.
This is often the case. Employees are expensive. Lots of people never get back to where they were before hiring.
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@scottalanmiller said in How to Grow from a One Man Operation to Two:
@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@ccwtech said in How to Grow from a One Man Operation to Two:
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
Yeah, probably too long. But the longer you do it, the more time you have to bank the money to pay the next person with less risk.
Yeah, you have to either be prepared to get a loan to cover their salary, or have it in the bank already. You might find your own salary going down, possibly significantly, while you continue to grow the business.
This is often the case. Employees are expensive. Lots of people never get back to where they were before hiring.
once you hire, there are a ton of new or at least significantly higher fees/taxes/etc you have to pay that you didn't before.
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@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@ccwtech said in How to Grow from a One Man Operation to Two:
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
Yeah, probably too long. But the longer you do it, the more time you have to bank the money to pay the next person with less risk.
Yeah, you have to either be prepared to get a loan to cover their salary, or have it in the bank already. You might find your own salary going down, possibly significantly, while you continue to grow the business.
This is often the case. Employees are expensive. Lots of people never get back to where they were before hiring.
once you hire, there are a ton of new or at least significantly higher fees/taxes/etc you have to pay that you didn't before.
Unemployment taxes, payroll costs, workman's comp, etc.
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@scottalanmiller said in How to Grow from a One Man Operation to Two:
@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@ccwtech said in How to Grow from a One Man Operation to Two:
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
Yeah, probably too long. But the longer you do it, the more time you have to bank the money to pay the next person with less risk.
Yeah, you have to either be prepared to get a loan to cover their salary, or have it in the bank already. You might find your own salary going down, possibly significantly, while you continue to grow the business.
This is often the case. Employees are expensive. Lots of people never get back to where they were before hiring.
once you hire, there are a ton of new or at least significantly higher fees/taxes/etc you have to pay that you didn't before.
Unemployment taxes, payroll costs, workman's comp, etc.
I'm 'very aware' of that... It sucks...
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@ccwtech said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@dashrender said in How to Grow from a One Man Operation to Two:
@scottalanmiller said in How to Grow from a One Man Operation to Two:
@ccwtech said in How to Grow from a One Man Operation to Two:
No doubt. I waited too long before hiring. I've been working 7 days a week about 17 hours per day... Not fun.
Yeah, probably too long. But the longer you do it, the more time you have to bank the money to pay the next person with less risk.
Yeah, you have to either be prepared to get a loan to cover their salary, or have it in the bank already. You might find your own salary going down, possibly significantly, while you continue to grow the business.
This is often the case. Employees are expensive. Lots of people never get back to where they were before hiring.
once you hire, there are a ton of new or at least significantly higher fees/taxes/etc you have to pay that you didn't before.
Unemployment taxes, payroll costs, workman's comp, etc.
I'm 'very aware' of that... It sucks...
NTG was once hit to pay unemployment... for a currently employed employee!!