While MSPs first starting out have a lot to learn, their chances of succeeding increase significantly if they start small and follow the TruMethods framework.
“Don’t try and do it all on your own,” said Darryl McAllister, Managing Director at NetCare Technology. “There’s safety in numbers. Go into business with a partner, or even better, a team of like-minded individuals you work well with. The business can grow quicker because responsibilities can be shared out.”
To survive, new MSPs must do two things: start small and embed the TruMethods framework in their cultures from the onset, he said.
“Dare I say this: They’ll be Schnizzin before they know it,” he said.
I spoke with Darryl about his journey as a TruMethods member, the evolution of his business and industry trends he’s following.
A lightly edited transcript of our conversation follows.
Why did you decide to become a TruMethods member?
We’ve been following TruMethods from the sidelines since I saw Gary Pica present at a 2012 event in Las Vegas. We signed up as a member in January 2018. Our operations manager came back from vacation saying he’d watched a TruMethods video and that we had to sign up. The timing seemed perfect — though, looking back, we should have become a member in 2012.
We’d been running a successful MSP for many years — doing a great job of looking after about 100 customers, but we knew something wasn’t right. Every time we took on another $10,000 in MRR, we also needed to hire another engineer, so we had what I called “profitless growth.”
I now know that we were experiencing the “reactive spiral of death.”
What have you learned from TruMethods? How did you evolve your business?
Well, we’ve learned a whole new set of descriptive phrases — including SMART Numbers, RHEM, Technology Alignment and Picanomics — but what we’ve deeply learned is the TruMethods methodology behind these phrases, and we’ve now embedded them into every aspect of our business, our processes and our culture.
We achieved this by committing to the process 100 percent and making time every week to watch and discuss the awesome collection of training videos that Gary and Bob have published over the years. It’s brought many positive, measurable improvements to our business, including less noise, better employee leverage, significantly higher average AISP and an awesome sales process based on Technology Success.
What does Technology Success mean to you?
Technology Success allows us to clearly differentiate our IT service offering in the marketplace. It has given us the opportunity to go back to our existing customer base and explain to them how and why paying more for Technology Success makes great business sense for them.
More importantly, it’s given us the confidence to significantly increase our pricing when talking to prospects, and, amazingly, our success in closing these sales — at a higher AISP than we previously had the confidence to ask for — has increased also.
What are some of the challenges you’re facing? How are you overcoming them?
We had challenges before TruMethods. Our prices were too low; we were always scrambling behind the scenes to maintain our high levels of service delivery; and we were often frantically closing projects late each month in order to make budget. Those days are now behind us, and we don’t have any major challenges at this time.
One issue we haven’t fully resolved yet is what to do with current loyal customers and also referred prospects that don’t fit the Technology Success model. We have reduced the number of service plans from four down to two, and we’ve created clear proactive/reactive separation between the two remaining ones.
How are you planning for 2020? What are some trends you’re paying close attention to?
Our number one priority for 2020 is to move from an owner-led sales approach to a world-class sales process. There is definitely a trend with prospects contacting us because their existing MSPs are letting them down due to on-going issues relating to technology misalignment and by only providing Virtual Captain Obvious strategic advice. This is not only providing new MRR customers at the right seat price, but we have growing suspect, prospect and warm lists that will enable us in 2020 to build an inside sales team, followed later in the year by our first full-time salesperson.
