EP38 - MSP Growth Strategies: Maximize Revenue in 2024 - Episode 38

Justin Esgar:

What's up everybody? Justin here, host of the All Things MSP podcast and I want to take a few seconds here to talk to you about ACEs conference. ACEs conference is a business focus conference for MSPs with topics ranging from marketing to management, human resources to business strategy and social media, legal, all of those things that help you grow your business. Now, ACEs conference is strictly content driven. It is not sponsor driven. Yes, we will have sponsors there. You will learn about new vendors and things like that, but it is not driven by them. We want you to grow and elevate your MSP and that's what it's all about this year. ACEs conference celebrating its 10th year and we're glad to be back in person. May 15th and 16th in Salt Lake City, Utah. Tickets are available now@acescomp.com. That's A-C-E-S-C-O-N-F.com and use the coupon code ATMSP to get 10% off. If you have questions, find me on the All Things MSSP Facebook group. That's facebook.com/group/all things msp. Glad to help you out in any way, shape or form. Can't wait to see everybody live in person. May 15th and 16th and Salt Lake City, Utah, come check it out. ACEs comp.com. We'll see you there.

What's up everybody? Welcome to the All Things MSP podcast. I'm your host, Justin Esgar and not with me today, your podcast producer, extraordinaire, Mr. Eric Anthony. Unfortunately, Eric is not here today, so you get just me all alone. Today. I want to talk a little bit about two things. One, I want to talk about the books that I'm currently reading to help increase my MSP offerings and such going into 2024, and then I wanted to take a look at the Facebook group and see, because there's been a poll going on, I want to read some answers. I want to talk about some of the potential solutions that you can start implementing and work on between let's say now and the end of the year, which there isn't much more time if this comes out on time because we're heading into the holidays, we're heading into New Year's, but let's think about what 2024 is going to look like, right?

Because part of being an entrepreneur, part of being an MSP owner, part of being a business owner in particular is to think about the future. You can't always be in the here and now. You can't always be dealing with the current fires. Now that being said, I'm currently dealing with a fire, but you have to be always thinking about two things. You have to be able to split that time. You have to be able to look at both sides of the rainbow, as I like to say the last couple of days. You have what's happening right now and you have what do I need to worry about in the future. Now granted, a lot of the time as entrepreneurs, we talk about the way future. Where do you want to be in a year? Where do you want to be in three years? Where do you want to be in five years?

What multiplier revenue do you want to come over and things like that. But right now, what I want to talk about today is specifically going to be let's talk about the next couple of months. Let's talk about the beginning of 2024. Let's talk about plans, let's talk about other things. So real quick, I have a stack of books right here that I want to show you. My number one book that I'm currently doing right this second is MSP Secrets Revealed episode two by Mark Copeman. We've talked about this on the podcast before. Eric is in this, I'm in this. A lot of other friends are in this. Mark Hoven is a great person. If you don't know him, he works over at Wingman. They're an MSC marketing firm based in the uk. Very, very smart, and this is 254 pages of solid gold advice. So you don't have this, check this out on Amazon.

What I like about this book real quick is that each page here is written by somebody else and it's just like a piece of information about it, right? There's vendors in here, there are other MSP owners in here. Mark has a great head on his shoulders and knew exactly who to get some piece of information, so check that out. I like that one. Another book that I'm reading, and I picked this up actually at an event, it's Level Up by Bruce McCauley, the ultimate MSP Roadmap for improving security operations and Profitability. The reason I picked this up, what I really thought was interesting is that especially as an Apple consultant, we don't do a lot of security stuff. Like I've joked around, a lot of Apple clients are not that particular about their security though they should be. And so there's a lot in here about, let's say passwords and insurance policies doing tabletop exercises for security, things like that.

Now granted, this is written, here's a whole thing about antivirus in Active directory. Obviously I don't care about that, but this is a pretty good solid book. I'm also currently reading a hundred million dollars leads by Alex Azi. Now, for those who don't know Alex Azi, I said this before in the show. I go through these phases of a top level entrepreneur or somebody, some social media star that I like that I'm following along with, right? It started with Gary Vaynerchuk and then I did Lewis Howes. I was into James Alex Etcher for a while, and currently I'm on my Alex Ozzy kick. The dude is, he's just a jack dude. He's like a big dude because his whole thing is he made his money in gyms. He sold gym programs and such for a long time, and by age 32, according to the back of this book, Alex and his wife Layla net worth crossed a hundred million dollars.

So if that's true, when it's just not some bss or he's just making money, I'm buying his books, lost my page there. That's where it's also notice I keep a pencil with my book for those who are watching on YouTube. The reason is because I actually will write notes in here and underline certain things that I want to get into. And then the last business book that I'm currently going through is, this is an older one, and I found this on my bookshelf when I moved and I had done a couple things and then I got through a couple pages and I stopped and I got through a couple pages. Then I stopped, and I really want to get through this one again, is The Entrepreneur's Book of Actions. What I like about this book, this is by Rhet Power. All of these have found on Amazon.

What I like about this is that every day gives you another thing. So here I am on week 15, which keep in mind it's not the 15th day six successful people connect people, and here's the whole thing about making introductions to other people and things like that, and you're supposed to just do one little thing a day, right? If you can make this part of your daily habits, obviously the number one thing was supposed to be read this book every day, but I haven't done that. But this is a really interesting look, and again, this isn't geared towards MSPs, neither is the Alex Azi book because even though you are an MSP and you think that if you learn the next technical thing, if you learn how to deal with entra conditional access or understanding the difference between a E one license versus an E three versus an E five and the nuance of how to run audits and stuff like that within your Microsoft tenant, that's going to make you a better business owner.

It's not right. It's not going to make it a better business owner because what's going to happen is you're not going to learn the tips and tricks you need to learn to actually run a business. You're going to learn the tips and tricks you need to run technical stuff. And as we've talked about before, you don't want to be in the business all the time. You want to be working on the business. And so taking time out to Read and learn is very much about on the business side of things. Don't just read books about MSP stuff, read other books. One book, when we hire a new employee, every new employee gets a virtual hoodie and gets a copy of the Phoenix Project, which is a great book. Granted, it's about DevOps, but you can extract the lessons from that book and put it into your own company.

And then of course, you always need a book for fun. I really like following this guy on TikTok. His name is Anton Warman. He's a Norwegian I think, and he wrote a book called Free Houses in Japan because his whole thing is that he renovates rundown. Apparently there's a lot of abandoned houses in Japan and he buys them and renovates them. So I'm excited to read his book as well. So those are my current books that, and lemme tell you something I'm going to preface this with I'm not the best reader and so therefore it takes me a while to get through a lot of these, and I wouldn't be surprised if next year at this time when I do the, Hey, what am I reading? I'm reading the same four books. So what are you reading? Tell me what you're reading. Drop us a line in the Facebook group, Facebook slash facebook.com/groups/at all things groups slash all things or drop a comment on the YouTube youtube.com/at all ThingSpeak.

Eric Anthony:

Hey folks, producer slash editor Eric here. I wanted to interrupt Justin. I mean, I really wanted to interrupt Justin while I edit this week's podcast to remind you about our premier sponsors. Super ops.ai is an AI powered PSA dash RMM platform designed for fast-growing MSPs that is built for the future and built for growth. Having both of your most important tools as an MSP built as one has advantages over others that are simply integrated. Whether you're shopping for a new PSA or RMM or you're just getting started, you should check out Super ops.ai. If you aren't looking, I still recommend you check out their new community full of information about this industry from some really awesome industry leaders. Use our link, ATP link slash super ops to find out more and check out that Community Move Bot is an onboarding tool that many MSPs are missing from their tool chest. Moving client files and email can be tedious, time consuming, and a little dangerous. Move Bot helps you prepare, execute, and monitor a wide variety of migrations from a growing list of data sources. Use our link, atsp link slash move bott to find out how to minimize migration stress, and elevate your client onboarding experience. Thank you so much to these sponsors for their support and commitment to the All Things MSP community. You can find links to their websites in the description of this podcast. Back to you, Justin.

Justin Esgar:

Alright, so I want to talk about, I'm in the Facebook group, this is why I'm looking off to the side for those who are watching YouTube and our good friend Eric, miss you, man, put out a poll last week and the poll was, what is your plan for revenue growth in 2024 and 47% of you said add more clients. 22% of you said increased prices. 12% of you said add new services. 6% of you said package services for specific verticals and 2% of you said add security services and then the rest were all of the above or whatever. Somebody wrote organized crime. That's a good one. Good job, Dave Clark.

And so there's a lot to be said here because everybody thinks that you can grow your business or you should grow your business by adding more clients. But what we're not taking into consideration is the exponential time a new client will take when you get a new client, or even if you have a new employee at a client, the amount of time that that client is going to take is not going to go up by one X or two x, it's going to go up by the power of two because there's exponential more problems here. You don't know who this user is, you don't know their skill level or whatever it is. You don't know whether or not they're a chatterbox and the second they get a problem, they tell someone else and then there's everybody in the office has that problem, that kind of thing.

And it's the same thing when you add new clients. If you add a whole new organization to your book of business, you're going to run into that same problem. What are the nuances that need to be dealt with here? Maybe they're more needy than your older clients or maybe they have different security needs that don't go with your current known tech stack and you got to learn a whole new thing, which yes, learning is good as we said, but if you have all of your clients on Meraki firewalls and this client needs to use a FortiGate for whatever reason, your ability to help them has diminished because you're like, I'm a hundred percent skilled with Meraki. I know everything there is to go. I can reboot all them. I can do everything I need to do. I can do updates, I can do blah, blah, blah, whatever.

And now you're like, oh, but what do I have to do to get this FortiGate to work? So you have to take that into consideration when you think about adding more clients. This is why I think the other two largest one of increased prices and add new services makes more sense and even combined, that's only 34%, so we're less than adding more clients for the people who responded. And the reason I like those two answers is it's easier to make more money from the clients you currently have. And yes, I also know the expression, it's like squeezing blood from a stone. However, if you increase your offerings, if you increase your tech stack, if you increase your toolbox and you offer new things to clients that will do things for them, not just put money in your pocket, remember you're selling them a service to something to do for them, you're going to have a much easier time making that sale because again, they should already know you and trust you as the trusted IT person and you can roll that out to everybody.

It's a lot easier to add a new product, like for example, VEON, which is a product that we've been looking at rolling out and we're slowly doing it for some clients. I think it's great, but it's a lot easier to roll that one product out to our 500 endpoints than it is to go pick up another 30 person office, plus the amount of training that needs to be done. I have to train my team about one new product and granted it works for all 500 endpoints, problem solve, then picking up this new client and worrying about all of the intricate details that need to be involved with them, right? You understand what I'm saying here? It's easier to sell to the people who already know you. This is why when you go buy a car, they try to sell you all the other packages on top of it. They've already got you. They know you want the car right now, we're going to sell the bells and whistles, and that's what you should be doing also, because it's a lot to sell bells and whistles and new products and new services to existing clients. Like I said, the other thing is increased pricing, which look, I'll be frank, the world's a mess right now.

You know that meme of the dog, this is fine. Liquid death, hashtag not a sponsor. Still everybody's hurting and we can feel bad for our clients and understand stuff, but they also have to understand that we're hurting just as much. This is why you should have in your contracts with your clients, a percentage increase year over year for what's the term. Now I'm going to go look this up and I apologize. This makes really good content when I'm supposed to know what I'm talking about, right? The term is cost of living. That's it. Cost of living. I'm sorry folks. It's late and I'm doing this one solo. Otherwise, Eric would've jumped in and told me what the word I was looking for. Yeah, you should have a cost of living percentage increase already in your contract, and to make sure you don't forget about it, you should have it on the calendar that if they sign on the 12th

A year from now minus 30 days, so if it's December 12th, when you're hearing this, November 12th, 2024 is when you tell them, by the way, your contract is going up by 5% in 30 days. They don't have a choice. It's in their contract and you increase their cost, their 5% on your services, not on the retail stuff, not on the stuff you're pushing through. So if you're pushing Office 365 licenses through, you keep that price the way it is because that's not under your control, but your services. So if you're charging 180 per device and you're getting increased by 5%, you're now 180 9, you're adding nine bucks per machine. You got a 20 person office, you add $9 per machine, you just increased the total amount by one whole device. So it's not like we're talking about a lot of money here, but if you were able to do that, you just added an extra $2,000 over the course of the year 5%. It's not that much. Now, some people in different areas might think 5% is a lot or less. I wouldn't go less than three, and I probably wouldn't go higher than seven. And because

I don't know who's listening. If you're in New York City, five to 7%, if you're in la, five to seven, if are in Luxembourg, I don't know what the rules are, 3% probably cost of living is cheaper there or wherever. So think about that. Think about your audience. Now, what you do if you increase your pricing, that's a much easier way to grow your revenue if you increase your offerings and you sell a new product. Let's go back to the Veon example for a second, right? veon, complete Protect full price is $10 and 20 cents a seat, right? Let's just call it $10.

The wholesale price that you can get from Pax eight is somewhere between five and seven. So let's talk about that same office, 20 people, 20 licenses. You've already upped them by 5%, so you're making that extra $180 a month. Now you have 20 times, let's say $3 in margin. So that's another $60. So now you're up two 10 a month and you've increased their security. You've increased their protections because AON is anti phishing out, anti-malware. Aon has shadow it so you can see if there's anything else. Hey, look, oh, I see you got an email from Zoom. You guys don't use Zoom. Can we talk about Zoom? Maybe you take over their Zoom accounts and you put it through one of your technology brokers like Tolos or Sandler Partners, right? You do things like that, and then of course you increase all the stuff that goes with it.

Oh, you want unconditional access? You got to get that from entra. That's an extra $7 for MSRP, but the margin on it is another dollar or two. So now we're going to go up. Now we've gone up, instead of $9, we've gone up almost 12 to $15. So now you've just picked up an extra $300 a month and you haven't added any more clients or more work yet, really. You may have added a new product, you got to learn it, but that's what I'm talking about. It's a lot easier to take these smaller steps to increase your revenue than it is to go and say, I'm going to land a new 50 person client at $180. Well, yeah, a 50 person client at $180 will net you $9,000 a month, significantly more than $300 extra for that one client we talked about. But if you have, let's say, I dunno, 150 clients and you've increased 150 endpoints, sorry, 150 endpoints, and you increase each one by $15, that's $2,250 that you didn't just have four seconds ago per month, right?

You just added almost $25,000 to your top line revenue by adding a new product and adjusting and adding the cost of living 5%. So don't always think that adding more clients, then yes, you do need to add more clients, but that's only to, I would say, make up for churn. If you lose clients, you want to add more clients and for another level of growth, I think that the problem here is that the order is wrong. I think you should make sure that you are adding new services and increasing your prices to your current clients first, and then whenever you have a new client, they get the new pricing plus the added those new services also. So that new client, instead of 180, is coming in now at 200.

Make sense? If you can increase your stack and build it up and have it ready to go this way when that new client comes in, boom. Now you've made even more money on them and they're still going to get hit with 5% down the road. So take these things into consideration. Think about how can you get more from what you have. Take a look at every client. I know a lot of us talk about doing business reviews, whether they're quarterly or annual or whatever it is. Just do it internally. Don't even share with the client if you need to just do it internally and look at your top five clients and say, okay, what do they all have? What are they all missing? What do I know that is the hot new thing that needs to be installed? Whether it's the sexy new firewall or the more robust Hulk like antivirus and anti-malware or anti phishing and anti-this and anti that, whatever.

Do it internally and then figure out what your plan is. Because if you do it now, you can send them an email before the end of the year and say, Hey, come the new year, I want to talk to you about what we're going to do in 2024, and you come to them and say, we're going to increase your security. We're going to increase your compliance. We're going to increase this. We're going to increase that. We're going to increase that. And a lot of them are going to say like, whoa, whoa, whoa. You're increasing a lot and you're going to say, I'm protecting your business. I'm protecting you, and I'm protecting your data, and I'm protecting your business because otherwise by 2025, you might not exist. A little bit of a scare tactic, but you get what I'm saying. So think about that. The next time you jump in and say, I'm going to add more clients, because it's a lot harder to buy new than it is to get from what you already have.

Everybody knows this. It's like the golden rule. So I want to know what you're doing for the next couple of weeks. Tell us your plans. You don't have to share all the details, but what's your plan here? Do you have a plan? If you don't have a plan, tell us you don't have a plan so we can work on a plan. Check us out on the Facebook group and ask questions. dmm, Eric, dmm, me. I'm here for all of you. That's why I'm here. That's why. Hello. That's why I'm here doing this show. I'm not here just to hear myself speak. I'm here to help you. We bring on guests that bring information to help you. Eric and I talked about stuff that's going on to help you. We are here for you. Our plan for 2024 is to do better for you. I know, I think I've said this every episode, like we'll try to do better next time, like 2024 for our plan is going to be to do better for you, so ask questions.

Tag us if you want us to talk about it on the show, for sure. Tag us facebook.com/groups/all things. MSP is where you're at. Drop us a line, leave a review, check out the YouTube, leave a comment there. Rate us. I dunno, somewhere along the line, we'll get monetized. I'm not really worried about that though, but do hit us up because that's what we want to do. We want to be able to help you. We want to be able to take actions to get you leads, to help you level up by giving you secrets. You see what I did there? For those who aren't watching, go to the YouTube. See what I just did there? That was little. I think that was awesome. It's like, I can't end this in a better way. Check us out on all the socials on your favorite podcast apps. The Drill. Also hit up Liquid Death and tell 'em that we drink their stuff on the show all the time. I want to see how well we can do with that. That's it for us. That wasn't Eric. I'm Justin. Hope you all have a good day. Bye.

Eric Anthony:

From your host, Justin Esgar and myself, thank you for listening to the All Things MSP podcast. Join the All Things MSP Facebook group or follow us on LinkedIn, Instagram, and YouTube. The All Things MSP podcast is a biz POW LLC production, and even though we drink a lot of it, this podcast is still not sponsored by Liquid Death.