He Built to $5M and Exited, You Can Too

[00:00:00] Your business is actually just a reflection of you and your leadership. And so you can be a $500,000 a year leader, or you can be a $5 million a year leader, or if you want, you could be a $50 million a year leader, right? And so you got to decide, is making sure that your tech stack perfect more important than building a sustainable business that creates impact?

[00:00:26] Hey guys, Damien Stevens, host of MSP Mindset, and I am live at the Pax8 event, and I'm so thankful to be talking with Sean Freeman. And Sean, tell us about Impactful MSPs. What is that?

[00:00:40] Yeah, thanks for having me on. Impactful MSP is my MSP coaching business, and I built it because I was kind of, when I was thinking about what to do after I sold my MSP, I was like, what would I need, you know, three, four, five years ago that would help me grow my MSP better, smarter, faster?

[00:00:57] And so I was like, I need a community. I'd love some, a mentor, and just some tools, even, you know, some templates, some really fundamental things to start with. And so I created that. That's what I created Impactful MSP about, and built that up. And we're just helping MSPs in the place I was five years ago. And so that's why it exists.

[00:01:20] Cool. Let's talk about where you're five years ago, because where it is, we actually kind of get a sneak peek. Later today, I think you're giving a talk about how something like the journey to five million? Yeah. So, yeah. Because almost nobody makes it to five million. Yeah, it's pretty remarkable that nobody makes it to five million. But yeah, we were $5 million a year MSP, and we just closed our deal to be acquired in January 2020.

[00:01:48] And so I sold my MSP to a national provider, and I stayed on for a little while. Learned lots of cool stuff there. But yeah, decided to go off and start this. So you sold in 20? January 2020. Wow. Right before. So, and when did you start? I'm just trying to figure out the time frame of how long it took you to get to that.

[00:02:10] Yeah, we started in 2011. So we're just shy of nine years old and built it up. Our team was about 23 people, five million a year, great bottom line. And yeah, the deal just made sense. The number we got was great. The company that was buying us had a really cool vision. And that's what we bought into. And then, yeah, COVID hit.

[00:02:36] So I want to focus on how you got there, but I don't want to skip one point. You said the deal made sense. Yeah. I think that's too easy to miss. And the reason is when things are going really well, sometimes I get a little too arrogant, a little too cocky. And I'm like, what are you talking about? I'd never take more, less than crazy amounts of this thing. Like I can't, you know, I got the Midas touch right now. Yeah.

[00:03:00] And then when things slow down or when they're just not as great as when I'm thinking about selling, which couldn't be the worst time. Yeah. So how did you know this might be the time or the deal? Yeah, good question. So the company that we sold to, we had known for quite a few years. They were in a different city, but, you know, we traveled back and forth and we'd go for drinks with each other and, and we'd share, share some knowledge and help each other out where we could.

[00:03:27] So we were already kind of friends. We respected how they did things. They had a really good reputation. I think the same was true for them. And so, so that all clicked. So, so the thing about being, being acquired or acquiring businesses is planting seeds and building relationships. At the end of the day, the MSP business is about relationships. Yes. Whether it's with your customers or your vendors or maybe potential competitor acquisition targets.

[00:03:55] And so, so that was a really good foundation to start from. And they had a vision of growth that was really exciting. You know, they were, I believe, about 35 million at the time of acquiring us. And we were five. The goal was to be over a hundred and possibly IPO. And so some really cool, exciting things. The other thing too, is that I had a team of people that had been on the, with the company for, you know, three, four, five, six years.

[00:04:23] So some, some senior people on the team. And this really unlocked some opportunity for them as well to grow into more leadership roles. And so, you know, and that, and that was really cool. Part of the deal, they got options in the new company and stuff like that. So it really, that all played a really big role in my decision. So that seems to be kind of rare. It seems like maybe you walk away with the cash all at the end.

[00:04:49] Maybe you do some upside in this existing entity for a while as the owner, but not many people talk about the upside or that there's any stake for the team. And so I love that there's like, you've kind of shattered the glass ceiling, like there's some different upward mobility, but why was it important to you to make sure that there were certain people that had some other incentive? Yeah, for sure.

[00:05:14] I started to think about my MSP probably about three or four years before we sold as something that I would eventually sell. You're going to exit your company at one point in time, whether you plan it or not is a different story. And so I thought of my company as being something that was a vehicle to achieve other means.

[00:05:35] And some of those means were creating impact in my community, impact in my team members, never mind my own life for sure. But I really wanted to align those things. And so that's why it was important to make sure my team had some ownership in the new thing to create that sustainability and that succession. Yeah, that was a huge part of it for me. And that's why I said it kind of aligned and it made sense. And those were things that they brought to the table as a buyer.

[00:06:05] Some of them I didn't even have to ask for. Like they said, no, no, we're going to give all your team options. Like that's a given because they valued. And I think that's where we really connected prior in our relationship is we kind of thought the same way. We were driven by similar value set and that really helped pull it together. I love that they cared about that, right? Not only from the alignment perspective, but like it's not a zero sum game. Yeah. And I think sometimes people think that way.

[00:06:32] And I have a feeling that's going to work out really well, not only for your team members, but for the collective group. Hey guys, Damien here. As I continue to interview the top MSPs in the world, one thing has become incredibly clear. It's time that we let go. Even more than that, every time I focus on my zone of genius and get out of the way and do the very few things I'm good at and delegate to others, I'm ready for that next level of growth.

[00:07:00] One way that I could help you is with servosity. We co-manage more backups and disaster recovery so you can focus on what you do best. Let us do the rest. And then what we do is we test the backups every single day so you never have to worry. If you'd like to engage us or just learn more, click the link below. So now I want to focus on probably what most people want to know, which is what's the path? What are most people missing? Yeah.

[00:07:27] Because as you know, most MSP don't make it to 5 million, which is incredible. It's incredible and incredibly sad because it's not easy. I can tell you myself. Yeah. But it's also just you put so many years in it, right? And there's so many other businesses where you could get to it. Yeah. At the end of the day, it's a competitive industry. You put a lot of blood, sweat, and tears in it. A lot of MSP owners, I find, find themselves with an accidental business, right?

[00:07:55] They had some friends that needed IT support and so they helped them out. And all of a sudden they have a company and they're working 60 hours a week and they don't want to be. So then they got to hire. And so that's the cadence I see a lot of people going through, right? It's not intentional usually, which is part of the problem. But once you realize that you've got yourself a business, you need to kind of upgrade your skill set. And what I mean by that is you're an amazing tech and so it's not about the tech skills. You need to start thinking like a business owner.

[00:08:26] So what's the long-term strategy? What's the leadership that you need to bring to the table to be able to build a business, right? Because we've all seen the leaders hire two or three people and they just get stuck there and they plateau for five years, right? You know, clearly we went... That's a great place to hang out. Yeah, like you can hang out, you can be comfortable, you could be fairly profitable, but that's going to erode, right? Because if you're not growing, you're not able to keep up with the new things.

[00:08:56] You know, over time as a business owner, you just get bored or just like frustrated with your business because you don't enjoy it anymore, right? So these are the things that happen. And so the key to unlocking that is becoming that leader that can keep growing with your business, right? Your business is actually just a reflection of you and your leadership. And so you can be a $500,000 a year leader or you can be a $5 million a year leader.

[00:09:24] Or if you want, you could be a $50 million a year leader, right? And so you got to decide, is making sure that your tech stack perfect more important than building a sustainable business that creates impact? And that's where I try to help people shift towards. So what do you, what do you see as the biggest roadblocks? Like if I were to kind of use inversion thinking, if I were thinking, what are the top things I could do to guarantee I'll never get there?

[00:09:54] Yeah. What are those things? Yeah. I think the biggest thing is just the ability for a person to look themselves in the mirror and accept that they have weaknesses, right? And I think in particular, you know, I've talked, I've met lots of other business owners, but in the MSP space, because we're technical, we're generally very smart people. We're very analytical, you know, and sometimes we're missing that, that leadership side of it.

[00:10:23] We're missing the people that, you know, the extrovert, right? So how do you go from being an introverted entrepreneur tech or business technician to somebody who's needs to like step out of their comfort zone and be a public figure, go out and sell, right? Inspire their team, be a leader. Those sorts of skill sets are completely different. And so if you can't face that as a technical person, you're going to be stuck there.

[00:10:50] And I've seen some people solve it in a few different ways. And one of those ways is just figure it out and, you know, get uncomfortable. The other way is to hire somebody, bring in a COO. It could be a partner. It could maybe just be a hired person. You're going to pay a salary and a really good compensation if they grow the business. But you have to recognize that and you have to do something about it, right? Business, any business, you're 100% accountable.

[00:11:19] It's on you. So if you're stuck and if you can't get past a plateau, you know, we see the stats in this conference, the market's growing, the businesses are exploding, the ones that are doing things the right way and getting out of their way are blowing up. And if you're not doing that, it's on you. Yeah. Really. Yeah. What do you... For everybody who's listening, you're sitting here going, how do I know? And that's me.

[00:11:48] Is there the common plateau? Is there a certain feeling where I'm going, man, this is... I can't crack through this. Like, how do I know when I do need to kind of get that next level of help or get that out of my comfort zone? I think a big part of it is asking yourself how you're making decisions. One thing I like to challenge people to do is ask them, are you making that decision out of fear or out of strategy? Right. Right.

[00:12:14] Like, are you not hiring or not doing the sales or not investing in marketing or not thinking about strategy because of fear that you have that you don't know what you're doing or imposter syndrome or any of those things? Because if you're operating in fear, then you're just in a scarcity mindset and you're going to just be super conservative. You're going to hang on to your clients. You're going to get really competitive and you're not going to collaborate with anybody. Right.

[00:12:41] So if that's what you're doing, I'd say try to switch that mindset. Right. More abundance. Ask for help. If you're not good at something, ask somebody. Right. A fellow MSP owner or a mentor or somebody in the channel. It's a really friendly channel. The people that are doing a great job are happy to share their stories of how they got over, you know, being introverted or how they did X in the business or hired somebody or

[00:13:08] fired somebody or raised their prices or fired a client. Right. They're happy to share those stories. And so that's kind of what I like to lean into because, you know, we're just at the end of the day, we're humans. Right. And there's the basic emotions and fear is one that drives a lot of our decisions. And as soon as we can start to realize that, then we can deal with it. How about you, Sean? Were you born knowing all this? Oh, no. No, I was an inflection point where you sat there and said, man, I am hitting a wall. Yeah, for sure.

[00:13:37] No, I mean, we grew fast, but doesn't mean we didn't hit walls. We just got to figure it out quicker. Right. In today's age, you have to move faster than ever. Right. Yeah. Um, and so I think that's the, that's the key is get curious about yourself. Right. Your own leadership abilities. The other thing too, is that don't hesitate to involve your team. You know, go to them and say, look, you know, I'm seeing we're having this problem.

[00:14:03] We haven't added a client in six months or, you know, we're not getting new revenue out of our existing clients or, uh, we can't do this or, you know, we keep dropping the ball here. Like, what do you guys think we should do to solve this? Like involve your team. Um, if you have a team, right. Uh, because you know, being an entrepreneur, being that leader at the top of a business, uh, if, if you just try to solve the problems yourself, um, and not involve your team or people in your network, uh, it's really lonely.

[00:14:31] And everybody has solved most problems that you're having, uh, or not everybody. So somebody out there has solved most of the problems you're having. And so finding out who that person is, you know, maybe getting free advice to solve it, or maybe paying for that advice. Right. Sometimes it's just like, if, if the thing you're trying to solve is valuable enough, just pay to shortcut that solution, right. Just get to the other side of it and then off you go. Right. Um, you start adding more profit to the bottom line.

[00:14:59] Um, and, and you need to, to be able to do that. You have to get out of that scarcity mindset, that fear driven mindset, because you need to start investing in yourself. You need to start making uncomfortable decisions. Uh, and you need to, you know, stop looking at everything that you're buying as an expense. Right. Yeah. You know, a lot of people have a hard time, you know, getting marketing going and, and doing, you know, sending gifts to prospects and like things that cost a bit of money,

[00:15:27] but they just don't see the longterm ROI on it. Right. So you need to shift that mindset out of, Oh, you know, can I save a buck on my tool stack here? And that saves me a bunch of money to like, no focus on the things that you can invest a dollar to get 10 back. Right. In six or 12 months. Right. So you mentioned scarcity or fear mindset. Um, why do you think that seems to almost be the default, right?

[00:15:55] It seems like it's like, Oh, I've got to protect this or I only have this much of this. Yeah. Um, and why, why do you think that is? I think it's because we're humans. I think we're, that's the way we're wired. Um, we are imperfect, right? Our, our brains are trying to keep us alive and it, and our brain can't tell the difference between a client canceling, uh, and you know, getting chased by a lion. Right. Like that's kind of the mindset you're in if you're making decisions on fear.

[00:16:24] Um, and that's part of being a good leader is being able to recognize that and deal with it and, and, and still make the decision that's hard and is creating the fear, right? I'm taking the leap. So what do I do with that? How do I move out of this scarcity mindset into an abundance mindset? Yeah. I think you have to just take action. I think the number one thing is identify the, the things you are doing or not doing based

[00:16:50] on fear, um, and then take action on them as little as it is, right? You can take one step and see progress and say, Oh, that wasn't too bad. Right. Like, you know, it doesn't need to be a big giant leap. You don't have to jump off a cliff, right? All these analogies. Um, but you can't just stay stuck, right? Uh, cause if, if your business is stuck, it's, it's cause you're stuck. Yeah. Yeah. I love that. I think that's very, right. If the business is stuck, it's cause you're stuck. Yeah.

[00:17:19] So what should I be thinking through when the business is stuck and I'm stuck? Like, what are the things, what are the practical pragmatic steps? Like step one, this step two, this step three, this, like what, what should I do? Cause the other thing is it can feel so lonely because you as the owner feel like you have to fix it, especially if you don't have a business partner. I'm speaking about myself. Like as a business owner, I feel like I've got to fix it. Sometimes it feels like, who do I go to? I don't know who's got this issue and what do I do? Yeah.

[00:17:49] And, and I mean, like I said at the beginning, you know, I built impactful MSP to create something that I wish was there when I was trying to figure that out. Right. So we have a free community. So join that, get help there. Ask questions. What does that look like? What is the free community made up of? Yeah. It's online. You just, you log in. We've got lots of free content modules, you know, really to provide you some solid value to start a foundation off of. All the people in the community bring value as well.

[00:18:19] So if you're struggling with something, go and ask and you'll probably get some advice that'll help you move past and take that next step. Um, and then the other thing too is involve your team. Right. So, um, bring, bring your team to the table and say, Hey, here's the top two things I think that we're struggling with as a company. Let's figure it out together. Right. I think the fallacy of you being the owner and you have to figure it out and solve everything is more of an ego thing. Right.

[00:18:48] You're saying, well, my ego won't let me admit that I don't know the answer to this. And so I can't take it to my team. Right. And I think that's a super important thing to realize. Um, you know, if you're not involving your team, then they're not actually going to be that engaged in the solution either. Right. And so getting their feedback, getting their input, um, you know, if, if you, the other thing too is MSPs, you know, their first hire is tier one, second hire is another tier one.

[00:19:19] And I say that's the worst thing you can do. Right. Why is that? Like try to hire people that are better than you. Yes. Because then you could delegate things. You could trust that they know what they're doing and you can go focus on the strategy. And that's all about leveling up your leadership. Yep. Hmm. So what's before I was, we kind of wrap up, what's one negative wisdom for everybody that's struggling? You, you, you, you've built your business. You, you've, you coach so many MSPs, you have the community.

[00:19:48] I'm sure you have a different view than others. What's something that others could think about and go, well, a question that they need to ask themselves or something like that. Yeah. Um, you know, a lot, a lot of MSPs have all these assumptions in their head. Yes. Um, you know, one is just around price, right? Oh, can I raise my price? How do people charge 300 a user? Uh, how do they get new clients?

[00:20:18] And they assume there's some magic, right? Right. But they never like dig into it. They never learn. They never figure out like, how does that work? Um, and there's a lot of things like that in our business, right? A lot of MSP owners, they don't know. I'm like, what are your book, what are your numbers for last month? And it's, you know, the, almost the end of that month. And they're like, Oh, we don't get our books till the end of the quarter. Like, what? You don't know your numbers. Yeah. Right.

[00:20:45] So you need to like take accountability of every part of your business. Um, it, there's a lot of work to build a business. Yes. There's a lot of hours, but at the end of the day, it doesn't matter. If you want to be in the business, you have to do it. That's right. You've got to put the work in until you can afford to hire somebody to do the work for you. Yeah. Right. And so that's part of level, leveling it up. Get curious about the things that you're questioning. Well, how do they do that?

[00:21:15] Like, okay, well, why don't I learn instead of just say, well, I'm going to charge a hundred a user when I know I could charge 300 if I did the right things. Yes. Right. Because honestly, running a business that's charging two, three hundred a user compared to one that's charging 50 to a hundred a user is a lot easier. Actually, it's easier to be in that top level. It's easier to sell to people with money than it is to sell to people that don't value what you do. Yes. Right.

[00:21:38] I think that's the trap people get stuck in is they don't dig enough and you've got to keep digging until you know and you can implement. And sometimes you've got to pay people to fast track that digging. Right. But yeah, I think I think the mistake a lot of business owners make is they don't they don't own those outcomes for their own and for their self. And they and they just they have those self-limiting beliefs and and they just keep believing them. Yeah.

[00:22:09] Yeah. Yeah. I think we all do. At least I do. Oh, me too. Right. And some I don't even know I have. Right. That's that's the key. That's all human. That's where our community and coaching, I think, is so valuable. I have spent a fortune and continue to and I highly recommend it. Sean, how could folks find you, your community, your coaching and when's the right time to like if for folks are listening, how do I self-identify? Yeah, for sure. Yeah. I think if you if you're looking at your MSP and saying like, I think I could do better,

[00:22:39] I could do more with this and create more impact. I think that's a good place to start from. Go to impactful MSP dot com. You can join the free community. You can book a 30 minute call with me, you know, bring your biggest problem and we'll try to work through it, figure out what next steps look like for you and no sales pitch at the end. You can take that and run with it and hopefully do amazing things. And I'm on LinkedIn. You can find me there as well. Yeah.

[00:23:07] Make sure to take Sean up on that. Sean, thank you so much for being on MSP Wynce today. Thanks for having me on. Absolutely. Cheers.