Newsletter 2.05 – Are you treading water or moving forward?

Back in June of 2013 I was participating in a triathlon in the little town of Buffalo, MN. For those of you who don’t know me very well, I’m an endurance athlete. A fat and slow endurance athlete, but nevertheless I love that sort of thing.

Before the race we had a unique opportunity. At this triathlon we had a judge from the Guinness Book of World Records. The goal was simple: get over 450 people into a 60 degree lake and tread water together long enough to make it official. So off we went, listened to the guy on the megaphone, made sure everyone was deep enough, and we did it. We entered the record book.

Treading water, in that moment, was the whole point. We won by staying in place.

The more I talk to MSP owners, the more I think a lot of them are treading water too. The difference is, in their business, staying in place isn’t a win.

When you start your MSP you have a vision. Grow the business, make some money, maybe even have some fun along the way. You know it’ll be a fair bit of work, but you’re an entrepreneur. That comes with the territory.

You sign some clients. Things get busy. Before long you’re stuck doing all the things. Because you’re capable of doing nearly every task in your business, the natural tendency is to just handle it yourself. The problem is it’s hard to get out of your own way when you’re the one blocking the path.

Every minute you spend on tasks that don’t move your business forward is a minute you’re treading water. You’re burning energy just to stay in place.

So what’s the fix?

Start by figuring out where your time is actually going. If you feel like you’re treading water, track what you’re doing throughout the week. Write down every task you work on and be diligent about it. You might need to do this for two or three weeks to get a real picture, because one week doesn’t always tell the whole story.

Once you have that list, break it into four categories. Note that a task can land in more than one:

• List 1: Tasks you love to do
• List 2: Tasks you hate to do
• List 3: Tasks that truly only you can do
• List 4: Tasks that can be handed off

Now review the lists. Pay close attention to lists 3 and 4. Some things you must do even though you hate them. Some things you love doing but probably shouldn’t be the one doing them anymore. Both of those are worth sitting with for a minute.

Then really dig into list 4. Group related tasks together and ask yourself whether that bundle of work represents a full time hire, a part time hire, or a contractor or outside service. You may find more than one role hiding in that list. The tech who handles your client work probably isn’t going to do your bookkeeping, for example.

For me, bookkeeping and invoicing are the clearest examples of treading water tasks. If I were starting an MSP tomorrow those would be the first two things I’d hand off. There are good, affordable options out there for both, and every minute I spend reconciling accounts or chasing invoices is a minute I’m not growing the business.

Does the math work?

This is where a lot of folks get stuck. The cost of hiring feels very real. The value of the time you get back feels theoretical.

Here’s a simple way to think about it. Take what you earn as an owner and divide it by the hours you actually work. That’s your effective hourly rate. If you can hand a task off for less than that rate, the math already works in your favor on paper. Dan Martell dives much deeper into this concept in his book, “Buy Back Your Time” – it’s an excellent read if this topic resonates with you.

The more interesting question is what you do with that recovered time. If those hours go toward sales, strategy, or anything that generates new revenue, you’re not just breaking even on the hire. You’re investing in forward motion.

For a technical hire specifically, a reasonable benchmark is that a tech should be able to support roughly 3x their salary in billable work. If that math holds, the hire pays for itself and then some.

The goal isn’t to build the biggest team. It’s to stop being the bottleneck in your own business. Every task you’re holding onto that someone else could handle is another minute in the water.

At some point you have to start swimming.

Recent Content

My videos have been a little sporadic as of recent, but I have a number of new videos and blog posts that you might find helpful.

• Building a Referral Engine for Your MSP: Blog Post | YouTube
• Your Biggest Client is Leaving… Now What?: Blog Post | YouTube

Also, I’ll be at Pax8 Beyond next week and hosting the Pax8 Peer Groups from Salt Lake City. I have two sessions that I think are worth checking out at Pax8 Beyond.

Session 1 is called Shadow IT Unleashed where I’ll talk about how Shadow IT has shifted in the age of AI. Session 2 is called What is Gross Margin and How Do You Control It? I’ll talk about one of my favorite topics: Gross Margin. I’d love to see some friendly faces in my sessions!

Thanks for inviting me into your inbox,

Adam