We at TruMethods built a benchmarking platform for our peer group members. It looks at financial data, operational data, sales data, marketing data, and does a bunch of great calculations. We’ve added more ways to view the MSP business over time. More recently, we added some calculations to help MSPs simplify their businesses.
On the platform, MSPs can now calculate professional services revenue per engineer. Each professional services resource should generate at least $20,000 of monthly revenue. So, if you, on average, have $15,000 a month of professional services, and you have three people in that area, you need to ask the question, “What’s everybody doing?”
The second calculation we added looks at the average number of tickets divided by the number of support resources you have available. Each support resource should be able to close 10 to 14 tickets a day. Again, if you have five people closing three people’s worth of tickets, you must ask, “What’s everybody doing?”
Professional services and support need to be efficient, not just for the obvious reasons of leverage and profitability, but also because when they’re inefficient, you can’t have that capacity working on value-added proactive roles, such as alignment, vCIO, and centralized services. And today, that also means that you can’t secure yourself or your customers the way that you would like to.
Many MSPs are working so hard to grow their revenue and profitability. But these two service delivery areas keep holding them back. They create resistance in the business that’s impossible to overcome.
Preparing for Tax Day isn’t only a Q1 activity for World-Class MSPs. For them, it’s practically an all-year event. But unlike them, many MSPs procrastinate filing their taxes, and that’s where they can get themselves into a world of trouble.
MSPs aren’t the only ones who put off doing their taxes. Thirty-three percent of Americans wait until the last minute to do their taxes, according to a recent survey by IPX 1031. But filing taxes doesn’t have to be tedious for MSPs if they take initiative throughout the year.
Here’s what you should do throughout the year to better prepare yourself for Tax Day.
Don’t Ignore Your Bookkeeping
Bookkeeping is one of those things we tend to put off more than we should. Staying up to date with your accounts saves you (and your accountant) a lot of headaches during tax season. Waiting until the end of the quarter (or year) to get your finances in order is a mistake, one many MSPs make, so you’re not alone. If you are doing the bookkeeping yourself, consider hiring a professional to ensure your business accounting is organized come tax season. While hiring a full-time bookkeeper may be out of the question for you, having someone review your books regularly makes all the difference.
Don’t Forget About Your Estimated Taxes
What you may not know is this: The IRS requires you to pay taxes as you earn or receive income during the year. Now, this usually isn’t a problem for someone receiving a paycheck every couple of weeks, but for small business owners, this begs the question: How often should I pay Uncle Sam? Most small business owners pay what is called estimated taxes, which are quarterly tax payments you make throughout the year. “To figure your estimated tax, you must figure your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year,” according to the IRS. Determining your estimated tax is not always easy, so consider seeking help from a professional.
Know Common Tax Deductions
“I’ll just write it off,” is a common phrase heard among business owners, but what does “writing it off” actually mean? If you’re new to the business world, you may not know. You can’t simply write off every business expense, as not all business expenses are tax-deductible. And even if an expense is tax-deductible, there could also be restrictions or qualifications. For example, you can deduct your meals, but only 50 percent. Knowing what you can and cannot deduct matters in the long run. Also, be sure to maximize pre-tax retirement deductions.
Seek A Professional
Ever try reading the income tax code? If so, how far did you get? It’s near impossible to understand, isn’t it? There’s no reason why you shouldn’t hire an accountant to help you with filing your taxes. Your efforts are better used elsewhere. Find an accountant who specializes in businesses, and if you can find a business accountant who also works with MSPs, even better.
Getting yourself caught up in tax issues can lead to big problems. It’s not worth the risk. Do what you can to understand the basics, including basic deductions, but after that, leave it to the experts.
Remember, it’s not how much you make, it’s how much you keep!
This article is intended to help MSPs gain perspective and is not intended as accounting advice. Be sure to consult with a CPA for expert advice on the accounting needs of your business.
Your customer base is like a garden. It needs to be pruned, watered and cared for regularly, or it becomes overgrown and overwhelming.
I recently had a conversation with an MSP struggling with profitability. They were profitable, but they weren’t profitable enough to grow and secure new customers. So, we spent some time on Micro Picanomics. And what did we learn? They needed to charge more. (No surprise there!)
We then talked through their customer base. What became clear was that they only had “feelings” about who was a good customer and who wasn’t — and they were pretty confident in those feelings. Hoping to change their mind, I asked them to watch some specific training in the TruMethods Framework library and do some evaluation on MRR as best as they could.
This led to questions around what customers should be included and what MRR is. So, we went back to Micro and Macro Picanomics, and I explained why we look at the business through this lens. Once they had the first pass at the evaluator, it became clear that their feelings around who was a good customer did not align with the facts.
Within five minutes, they had a better idea of why they were feeling pain and noise in the business. It was not an easy or quick issue to solve, but we agreed on a list of priorities to focus on over the next quarter. They also agreed to review the evaluator every quarter and set new quarterly objectives, including raising prices, digging into the source of tickets for noisy customers, resetting edges, making project recommendations, or even firing a customer.
Every MSP has customers that they may not have sold today based on new standards, customers with old programs or pricing, and relationships that have drifted over time.
If you don’t attend to your customer garden, new customers suffer, employees feel overwhelmed, and, eventually, you get stuck.
Platform enhancements include new product sales certifications and Done-4-U social media services that make it even easier for MSPs to grow profits and expand their customer base
March 17, 2022—Miami, FL — Kaseya®, the leading provider of unified IT management and security software for managed service providers (MSPs) and small to medium-sized businesses (SMBs), today announced significant upgrades to Powered Services Pro. The sales and marketing enablement platform helps MSPs to better overcome sales objections and earn new business through new enhancements like product sales certifications, the Powered Services Supercharge Forum, Done-4-U social media services and the addition of the TruMethods framework to the platform.
“As the former CEO of an MSP, I understand the challenge of creating effective sales and marketing campaigns while juggling technical troubleshooting and client needs,” said Dan Tomaszewski, SVP of Channel and Community at Kaseya. “These new features give MSPs the tools they need to sell and market more effectively and provide them with a support system to achieve their business goals. We’ve quadrupled the size of our team in the last two years to provide top-tier guidance for MSPs looking to take their business to the next level.”
While MSPs are experts on the technical aspects of their solutions, they often struggle to communicate their value proposition to end users due to a lack of sales and marketing training and constraints on their time. MSPs can better navigate the sales process with Powered Services Pro’s 14 new sales certifications designed to help close more deals—with more to come over the next few months. Additionally, the platform now offers Semel Systems compliance training from industry expert Mike Semel to help organizations build a profitable compliance-as-a-service business.
The industry-leading TruMethods framework has also been added to Powered Services Pro to help MSPs with operational efficiency, pricing and packaging, business planning and more. Gary Pica’s time-tested framework has allowed thousands of MSPs to thrive and will continue to be enhanced with new content and resources through the Powered Services Pro platform.
Additionally, Powered Services Pro has enhanced its one-on-one coaching program Goal Assist with new Partner Plans that allow MSPs to set an overarching sales and marketing strategy with guidance from a dedicated Channel Enablement Manager. The platform also now offers Done-4-U social media capabilities that simplify social media management for time-stretched MSPs—ensuring they can focus on other priorities while taking advantage of new leads generated through social channels. To help further support users, Kaseya created the Powered Services Supercharge Forum as a resource for MSPs to share their best practices and challenges with thousands of like-minded business owners around the globe while interacting with coaches on the Powered Services Pro team.
Kaseya is the leading provider of unified IT management and security software for managed service providers (MSPs) and small to medium sized businesses (SMBS). Through its open platform and customer-centric approach, Kaseya delivers best in breed technologies that allow organizations to efficiently manage, secure, and backup IT. Kaseya IT Complete is the most comprehensive, integrated IT management platform comprised of industry-leading solutions from Kaseya, Unitrends, RapidFire Tools, Spanning Cloud Apps, IT Glue, ID Agent, Graphus, RocketCyber and TruMethods. The platform empowers businesses to command all of IT centrally; easily manage remote and distributed environments; simplify backup and disaster recovery; safeguard against cybersecurity attacks; effectively manage compliance and network assets; streamline IT documentation, and automate across IT management functions. Headquartered in Miami, Florida, Kaseya is privately held with a presence in over 20 countries. To learn more, visit www.kaseya.com.
By now, you’ve heard about Russia’s invasion of Ukraine. This war is being fought on multiple fronts, one of which being cyber. Russian hackers are launching an all-out assault on key Ukrainian government, banking, and infrastructure targets. Experts expect that these attacks will escalate in Europe and in the U.S.
I spoke with Jim Lippie, the CEO of SaaS Alerts (they monitor more than 120,000 users across 2,100 SMBs for 400 MSPs), and he said that his company is already seeing an upward trend in attacks.
Cyber attacks can take on a life of their own. In 2014, when Russia last attacked Ukraine, they used a cyber bot in their attack. The bot ended up rolling across Europe, creating more than $10 billion in damages (this was just an unintended consequence of Russia’s attack).
Russia’s capabilities are far beyond 2014. In fact, we will see a lot more of what they’re capable of in the coming weeks and months, so what does this mean to us as MSPs?
Well, obviously, there’s an increased risk for us and our customers. You need to use this event to further communicate to your customers that we live in an assume breach world. You need to be discussing why they need business impact assessments (BIAs).
BIAs are a key to incident response planning. It means that every customer needs an incident response (IR) plan and you need to perform tabletop exercises.
I suggest you listen to this recent CyberCall session, where we spoke to the two MSPs that I had on stage at Right of Boom. They were both victims of an RMM breach. We did a survey on the Cyber Call and found that more than 80 percent of MSPs on the CyberCall have not yet done an RMM tabletop — that’s alarming.
This is a chance to get on the same page with every customer to add processes and roles to your offering and increase the value of your services.
I recently attended a cybersecurity conference for MSPs in Tampa, FL called Right of Boom. It reminded me a little bit like Schnizzfest, in the sense that it was the result of grassroots efforts, and everybody felt connected by a common purpose.
The idea for this event began more than 18 months ago when Andrew Morgan approached me and Wes Spencer with an idea to start a cybersecurity podcast called The CyberCall. Our goal at the time was to raise the cybersecurity poverty level for MSPs.
The first week of the podcast, we probably had less than 100 listeners. Fast-forward to today, there are more than 4,000 subscribers to The CyberCall. The podcast has also reached more than 10,000 MSPs. To be honest, I don’t think we realized the impact of The CyberCall until we got to Right of Boom and saw how people reacted (I eventually lost track of how many people asked for selfies!) We’ve come a long way — that’s for sure.
The CyberCall community has attracted some great people, many of whom joined us at Right of Boom. Many MSPs and industry thought leaders attended the event, including Sounil Yu, author of “Cyber Defense Matrix,”.
Even though Right of Boom showed me how much progress MSPs have made on the security front, there’s still a long way to go. I learned that we need to have common terminology as an industry to communicate with customers and team members. Most of all, MSPs need to be able to communicate cyber risk to each customer in a simple and non-technical way.
At the event, I moderated a panel of two MSPs, both of which had been breached. It was an eye-opening experience for me and many of the people in the room. If you sat in the room for an hour and listened to the two MSPs talk through their experiences of having each one of their customers breached, you would change your talk track with your customers today.
The two MSPs discussed the math problems that were created by having to deal with so many customers, users, and servers at same time; the misalignment in expectations they had with many of their customers; and all the things they wish they would have done, planned, or documented for themselves and their customers.
Both of these MSPs now charge their customers a lot more — and the good news? Their customers are happy to pay, even the customers that pushed back on them in terms of spending before being breached.
I now have a deeper understanding of how hard “Right of Boom” competence is, so much of detect, respond and recover is people in process. This is the main challenge that you need to make progress on this year. Use the Cyber Defense Matrix, and order Sounil Yu’s book explaining it. It’s a great way to have your team and your customers visualize cybersecurity risk in a clearer way. If your customers care about how much you charge them, they don’t understand their risks — and that’s on you.
This is the year we need to get our arms around these concepts. To be clear, we’re not cybersecurity firms. Our role with our customers’ security is going to change over time as technology advances. Cybersecurity needs to be a part of our offering, delivery, and process. Just like the other things we do for customers.
Our primary role has always been to understand our customers’ businesses, reduce their risks, and help them capitalize on opportunities. This has not and will not change.
While TruPeer may mean something different to each one of its members, members who get the most out of TruMethods’ most popular peer group find that they’re strategically aligned with TruPeer.
“TruMethods and 2Fifteen were closely aligned from the moment we were introduced to Gary and his team,” said Ed Lukacs, CEO of 2Fifteen Tech, a Salt Lake City-based MSP. “Gary spoke to us about the TruMethods framework, and everything resonated so soundly into what we were already doing. The subsequent benefit was that we were about to join a peer group that spoke the same language and had the same initiatives. We felt like the addition of TruPeer into our strategy would benefit everyone at 2Fifteen, not just our leadership. We couldn’t be any happier with our decision to join. It’s paid dividends to date.”
During our interview, Ed shared how his business has benefitted from TruPeer, how TruPeer is different than other peer groups in the industry, and what he’s learned from fellow TruPeer members.
A lightly edited transcript of the conversation follows.
How have you benefitted from TruPeer?
By applying the framework and being held accountable by our peer group, we have benefited significantly from the advice of Gary and his team, as well as the advice of other TruPeer members. We have also benefited from the guidance of our peer group and the TruPeer team to address similar issues that others have already addressed. A significant benefit is that we have been able to see growth quicker by learning the principles taught through the modules, office hours, and quarterly meetings.
How is TruPeer different from other peer groups you’ve participated in?
TruPeer closely aligned with what we were already doing. However, we didn’t have the framework defined, nor did we have access to the wealth of data and processes that TruPeer provides. Of the peer groups that we have participated with previously, they lacked the organization and content that TruPeer provides. TruPeer aligns well with MSPs, understanding their challenges and then providing modules, webinars, projects, and office hours to learn and discuss from its peer members and its leadership. Other peer groups that we have participated in have delivered only a fraction of those lessons, and little of the value.
What have you learned from a fellow TruPeer member that you continue to implement to this day?
A lesson we learned from a fellow TruPeer member that we still implement today is the need to work on your business, not in your business. As leaders, we feel we have to do everything. But as we talk through the framework, engage in each meeting, and analyze our data, this is what they call working on the business. This has been a valuable lesson that each day, we work closer and closer towards.
What does TruPeer mean to you?
TruPeer means opportunity and growth. Each valuable lesson, whether from a module, a webinar, a project, office hours, or a meeting, puts us one step closer to achieving our vision.
In case you haven’t heard, one of the unexpected consequences of the COVID-19 pandemic and associated economic disruption has been a massive number of people quitting their jobs. Dubbed the “Great Resignation,” this mass exodus in the workforce has led to labor shortages in many sectors along with rising salaries.
Some of this activity is directly related to the pandemic—workers in the service industry that have been displaced by shutdowns but buffered by pandemic assistance payments, have been able to delay their re-entry to the workforce and look for different or better jobs. However, in other sectors, these resignations seem to be driven by a general mass re-assessment of work by employees that have been working from home or have been furloughed.
According to Fortune, the quit rate has hit an all-time high, although this trend has not affected every sector equally.
All this turnover exacerbates an already big workforce gap in the cybersecurity sector. The U.S. Commerce Department estimates there are about 464,000 U.S. cyber job openings, but not enough new, qualified workers to fill them, according to an article in the Washington Post. Moreover, with cyber-attacks increasing significantly during the pandemic, the need for qualified cybersecurity staff continues to grow.
Staff turnover has also generated new vulnerabilities, as many companies find that former employees have left with company data or may still have access to password-protected applications or networks.
For MSPs, this creates opportunities for business growth while also posing some hiring challenges.
MSPs that provide security services have already seen first-hand how small and mid-sized businesses have struggled to face new cyber threats with an IT staff that has been stretched thin. Unfortunately, current employment trends are only going to make that problem worse.
While large companies may be able to handle their security needs internally, other companies will increasingly turn to vendors to provide automated security tools and services like XDR (Extended Detection and Response) and MDR (Managed Detection and Response). As a result, SMBs will need a managed services provider that can help them utilize these tools and educate their staff.
MSPs can also help companies with a high degree of staff turnover to better lock down their infrastructure during the onboarding/offboarding process.
MSPs are also going to face their own hiring challenges. Like their clients, they will be competing for a shrinking pool of qualified candidates. There are few opportunities to expand the field of potential new hires that could be beneficial moving forward.
For example, companies could institute training programs to help create a home-grown team of cybersecurity experts from different departments within the organization. Likewise, MSPs can help their employees learn new skills to address this rapidly expanding market opportunity.
There could also be an expansion of diversity in the hiring base¬—that includes reaching out to a wide variety of educational institutes and hiring employees with a more diverse set of backgrounds and technical skills that may be applicable in cybersecurity. This has the additional benefit of bringing a fresh perspective to security challenges that could help improve responses to these rapidly evolving threats.
Many of the employees who have recently resigned positions were mid-career professionals. According to the Harvard Business Review, there was a 20 percent increase in resignations by people between 30 and 45. In addition, hundreds of thousands of women also left the workforce over the past year. These former employees are typically looking for new opportunities for growth that they could not find in their previous positions.
This is a vast pool of potential employees with a professional background that can leverage their soft skills in cybersecurity positions, according to Forbes.
Savvy MSPs can seize this moment. Help clients weather workforce upheaval by providing the automated software and managed services they need to keep data and applications safe, even when they may be short-staffed in the IT department. MSPs can also help grow the pool of available cybersecurity talent by investing in their employees and hiring/training professionals from non-traditional backgrounds.
It isn’t clear how long the volatile labor market will last, but MSPs can now take advantage of the opportunity to grow their businesses and workforces.
Nathan Bradbury is Senior Manager of Systems Engineering for Barracuda MSP, a provider of security and data protection solutions for managed services providers.
No matter what business you’re in, you should have an attorney review your contracts. If you don’t, one small mistake could cost you millions of dollars, which, more than likely, would put you out of business. But if you don’t have an attorney, what should you look for in one?
If you don’t know any attorneys, use your networks to find one. For example, if you’re a TruMethods member, ask around your TruPeer group. Someone should be able to assist you.
Avoid cutting corners when hiring an attorney. Your attorney should have experience with IT support agreements and cybersecurity. In my experience, this is extremely important, and it’s not something you should overlook.
Your attorney must also stay up to date with what’s happening in our industry to protect you from the ever-evolving landscape we operate in. Does your attorney read our industry’s trade publications or sit in on webinars hosted by vendors in our space? What about your attorney’s understanding of what you do and the services you provide, and how you differentiate yourself from your competitors? If your attorney has no interest in the MSP space, you may want to find another attorney.
In addition to drafting and reviewing contracts, your attorney should review your master services agreement (MSA) every year. That’s right — every year! Not every five years or couple of years — every year. Having your attorney do this is worth every penny.
Your MSA is one of the most important documents at your disposal. Ultimately, your MSA is the framework of your relationship with a client. Additionally, it highlights when and how you get paid, response times, hours of availability, a termination clause, and more. An attorney who has worked with MSPs before more than likely has an MSA already drafted.
Other qualities you should look for in an attorney include availability, rapport, responsive communication, and dedication.
If you don’t already have an attorney, you should consider getting one immediately — but before you do, ask your peers for attorneys they’d recommend. You will want someone with experience in the MSP space, who has drafted MSAs, is dedicated, and communicates effectively.
Recently on The CyberCall, we talked about dataflow diagrams with Brian Blakley. If you’re not familiar with Brian, he is the founder of Cosant, a cybersecurity firm, and works primarily with MSPs on their cyber strategies. According to him, most MSP customers are not able to attach proper risk to their data unless the MSP starts with a business conversation.
You can’t just ask customers, “What data is critical?” You must have conversations about their businesses and work backwards. For example, “Mr. Customer, you said that 70 percent of your money comes in when your product or service is delivered, but what happens before that?”
Then, you trace it back as far as you can. You ask questions about who is involved at each step. This will help you uncover what is critical, where their data is, and how or what (think APIs and collaboration) touches it. Then, you can help the customer attach a value to protecting the data and understanding the process.
But here’s my thought.
Not only is the business conversation required to build a dataflow diagram, but it’s required to offer any real strategic technology advice to customers. TruMethods has been pounding this drum for a long time — but now the stakes are much higher.
For 2022, your top goal is building more strategic business relationships with every customer. Measure your success based on this. Make decisions and set priorities that make your vCIO process more strategic.
