How to Grow from a One Man Operation to Two
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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:
And the state was like "WTF?""
Eh?
So what was the outcome?
We didn't have to pay. But what a freaking mess. It shows how little diligence is put into asking people to pay!
But the guy applied for unemployment to get the train rolling?
Or was he part time with you and entitled to unemployment less his part time earnings?
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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?
Large MSP's generally begin with a large split off of an IT department from a larger company. So there is a rolling 50 to 100 IT stagg joining the new firm and established revenue from the parent company to continue providing IT services.
All the Growth Methods MSP programs in the world will never bring you from the small shop to this level. If these programs worked you would see less programs and those same people growing large global MSP's. Large MSP's are created by deal makers they put these companies together. People who know enough about IT to navigate the board room pitches.
A large IT business, like any business, is not something a tech savvy IT consultant would ever create. Every MSP I have ever worked with purses deals like this...
1.) Company has 3500 employees, 40 IT Staff
2.) MSP engages to onboard IT staff, showing the customer an increase in agility, increased resources and decreased benefits and soft dollar overhead
3.) MSP onboards all IT Staff with a commitment to not fire anyone in the first year.
4.) Consolidation and employee shifting begins within the MSP while the customer realizes a more streamlined support structure with the MSP's existing 250 staff and processes.I think you are far better off looking to form a small boutique consulting shop and create clear financial goals than to pursue an MSP.
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Another caveat with the Small Biz MSP...
Small businesses under 100 employees, however successful the company appears, are general not able to make sound decisions regarding IT. You end up giving more for less because they dont understand your value, or you spend 80% of your effort getting business instead of providing service and making money.
Consulting puts you in a more earnest position once you actually have a customer, and a more long term position.
However, small businesses are not seeking our IT consulting. Its a hard marketing proposition. They are googling for cloud services they can control themselves to replace the much hated IT guy they are dealing with.
It can be done. I think I remember reading even on NTG that they started during the IT boom and had the advantage of taking on an incumbent customer base.
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@bigbear 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:
And the state was like "WTF?""
Eh?
So what was the outcome?
We didn't have to pay. But what a freaking mess. It shows how little diligence is put into asking people to pay!
But the guy applied for unemployment to get the train rolling?
Or was he part time with you and entitled to unemployment less his part time earnings?
He was part time wiht us, he had applied for partial unemployment.
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@bigbear said in How to Grow from a One Man Operation to Two:
It can be done. I think I remember reading even on NTG that they started during the IT boom and had the advantage of taking on an incumbent customer base.
No, we started as a software shop and moved into IT gradually.
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@scottalanmiller said in How to Grow from a One Man Operation to Two:
@bigbear said in How to Grow from a One Man Operation to Two:
It can be done. I think I remember reading even on NTG that they started during the IT boom and had the advantage of taking on an incumbent customer base.
No, we started as a software shop and moved into IT gradually.
I think it is supportive of the idea that everything outside of IT service is 10 times easier to sell than IT service (or consulting) and then you can expand your relationship to take over IT.
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Based on my own personal experience, I don't agree with a few points here. I've grown my own MSP business without debt beyond just myself. As a one man shop there are a lot of tasks you can find for an entry level person. Your contract rates don't change, but you don't have to stop what you're doing for the easy tasks.
I also don't think partnerships are a good way to go for businesses of any type. Read about all the case studies and you'll find that a 51% to 49% split is way better than 50/50. At the end of the day there are some decisions that have to be made, and there needs to be a final authority.
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@mike-davis said in How to Grow from a One Man Operation to Two:
Based on my own personal experience, I don't agree with a few points here. I've grown my own MSP business without debt beyond just myself. As a one man shop there are a lot of tasks you can find for an entry level person. Your contract rates don't change, but you don't have to stop what you're doing for the easy tasks.
I also don't think partnerships are a good way to go for businesses of any type. Read about all the case studies and you'll find that a 51% to 49% split is way better than 50/50. At the end of the day there are some decisions that have to be made, and there needs to be a final authority.
The problem with the 51/49 split is that everyone wants to be the 51%.
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@scottalanmiller said in How to Grow from a One Man Operation to Two:
The problem with the 51/49 split is that everyone wants to be the 51%.
Right. If you own 100% because you are a one man shop, I would argue that you don't need someone at your level, you need someone entry level at first. Even years down the line, you may need someone at your technical level or higher, but as the business owner, you need to work on the business, not in the business.
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@mike-davis 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:
The problem with the 51/49 split is that everyone wants to be the 51%.
Right. If you own 100% because you are a one man shop, I would argue that you don't need someone at your level, you need someone entry level at first. Even years down the line, you may need someone at your technical level or higher, but as the business owner, you need to work on the business, not in the business.
Right, I was thinking more of the "merging with someone else at your level" which is a handy option as they can bring their own customers and work with them. But you get the conflict of everyone wanting to be the boss.
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A small "MSP" has the chances a rock band has of both sustainability let alone large scale success.
Its got me thinking, and maybe a good topic for another thread, what is the "hot business" now that is accessible for a small startup. Something where customers are actually seeking out solutions the way small offices needed a server, email and netowrk help in the late 90's and early 2000's?
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@bigbear said in How to Grow from a One Man Operation to Two:
A small "MSP" has the chances a rock band has of both sustainability let alone large scale success.
Its got me thinking, and maybe a good topic for another thread, what is the "hot business" now that is accessible for a small startup. Something where customers are actually seeking out solutions the way small offices needed a server, email and netowrk help in the late 90's and early 2000's?
If we only knew.
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@bigbear said in How to Grow from a One Man Operation to Two:
Something where customers are actually seeking out solutions the way small offices needed a server, email and netowrk help in the late 90's and early 2000's?
Small businesses still need help with networking, wireless setups, and email. (mostly in the form of o365 migrations.)
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Yeah but I was around at the beginning of this, when we were teaching people what email was and replacing banyan vines with PC's and token ring or ethernet.
The money onboarding a new customer just isn't there. In fact, the cost to acquire an IT customer on a consistent basis is enormous compared to the good ol days.
It is difficult for veterans of the industry to accept, but with the passing of one thing there must be something on the horizon that is accessible to a small business owner.
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@mike-davis said in How to Grow from a One Man Operation to Two:
@bigbear said in How to Grow from a One Man Operation to Two:
Something where customers are actually seeking out solutions the way small offices needed a server, email and netowrk help in the late 90's and early 2000's?
Small businesses still need help with networking, wireless setups, and email. (mostly in the form of o365 migrations.)
And to your point, I know there is revenue and opportunity but it is a trickle compared to the early days of internet and private networks, SMB particularly.
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Curious on everyone's thoughts on how skilled this first employee should be, and how much they should get paid. Are you cheap like the typical SMB and get someone for $40k? or do you pay for actual talent at $70-100K?
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@irj said in How to Grow from a One Man Operation to Two:
Curious on everyone's thoughts on how skilled this first employee should be, and how much they should get paid. Are you cheap like the typical SMB and get someone for $40k? or do you pay for actual talent at $70-100K?
I would say that if you don't want a rotten apple, you don't go to the barrel, you go to the tree. I've hired high school and college students. I'll pay them minimum wage and give them raises as they earn it.
As part of the hiring process, I explain that I can pay them what they are worth as they can do more advanced tasks. One reason I left corporate IT is that in a small company you can hit the ceiling pretty fast. As an MSP if you master the daily task, you have an incentive to automate things.
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With that said, if a skilled employee left, you wouldn't have much of a choice but to look for a skilled employee.
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@bigbear said in How to Grow from a One Man Operation to Two:
Yeah but I was around at the beginning of this, when we were teaching people what email was and replacing banyan vines with PC's and token ring or ethernet.
The money onboarding a new customer just isn't there. In fact, the cost to acquire an IT customer on a consistent basis is enormous compared to the good ol days.
It is difficult for veterans of the industry to accept, but with the passing of one thing there must be something on the horizon that is accessible to a small business owner.
It's true. Acquisition used to be trivial and the amount of work needed was high. Today, cost of acquisition is enormous and customers need almost zero work.
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@mike-davis said in How to Grow from a One Man Operation to Two:
@irj said in How to Grow from a One Man Operation to Two:
Curious on everyone's thoughts on how skilled this first employee should be, and how much they should get paid. Are you cheap like the typical SMB and get someone for $40k? or do you pay for actual talent at $70-100K?
I would say that if you don't want a rotten apple, you don't go to the barrel, you go to the tree. I've hired high school and college students. I'll pay them minimum wage and give them raises as they earn it.
As part of the hiring process, I explain that I can pay them what they are worth as they can do more advanced tasks. One reason I left corporate IT is that in a small company you can hit the ceiling pretty fast. As an MSP if you master the daily task, you have an incentive to automate things.
I'm 100% with Mike here. It's rare that I want to hire someone mature in the field. It happens, the right person is the right person. But especially when looking for someone that will change roles over time, getting students or pre-pro level staff means that they grow with you, grow specifically with your needs, grow up in your culture, etc.
