About the Episode:
Today, I am talking straight to the businesses that are service-based. This is what you need to be doing, this is how you grow and expand. Listen in to what my teachings are like inside of my coaching programs.
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- When you are still learning as a leader
- Being reactive and its importance
- Picking for the now
- Money doesn’t solve all problems, but it sure helps
What shakin’. Hey, I’m Rick Jordan, and today we’re going all in. We’re, uh, we’re talking about some stuff today. This is actually an episode that’s, uh, going out to my coaching group as well. So you get the benefit of, as a listener sort of listening in on one of the sessions as I’m actually talking to service-based organizations about some things. So as you’re growing a business or maybe you work from somebody to where it’s your responsibility to, to implement things, especially tools that you use, like software tools or, or other things in, in your company. Or maybe you’re looking to sell something new, launch a new business, launch a new online business, or a digital marketing agency. I’m telling you, this episode is for you, for anybody about making the right decisions at the moment on what it’s going to do for you right now as an entrepreneur. So, this is awesome. All right, here we go.
There are those days and today’s kind of one of those where you’re just dealing with a lot of stuff and this is what happens with MSPs. There, there are some phases, and I like that I’m still operating in MSPs, so I can actually bring you guys the real stuff that takes place as you’re trying to scale. I can bring you guys everything that you would be going through as you’re trying to scale with a services organization. I can bring you actually what happens down in the trenches from, from a CEO’s perspective, all the way down to like your frontline people. I can bring you the perspective all the way down and give you all the challenges that are associated with it. Then, the real talk, everything that actually truly exists. Because one thing is that I’m still in touch with this because I’m actually still operating this, even though I’m not really involved in the day-to-day, it’s still giving instruction, and I’m still learning too, as a leader, and I’m starting to, to recognize putting some things in place, like even going through the next month.
And I’m starting even though it’s, it’s interesting because people will say that you don’t want to be reactive. You shouldn’t be reactive, you know, you should plan this stuff out. And it’s like, I don’t think there’s a point in time to where I ever want anybody that’s working for this organization or, or my company as a whole to ever stop being reactive because we need to be able to, to move quickly and adjust quickly. There. Of course, there’s stuff that should be planned out and projects and, and milestones and all of that. At the same time, I want to continuously improve, and I want to continuously be reactive to things so that we can stay relevant. The only way that I believe that you can stay relevant in any industry, especially a services industry, the only way that you can stay relevant is to actually be reactive.
And that’s taking a look at the marketplace and, and consumer sentiments. And I was telling, uh, an individual this the other day, it’s like the best, still the best industry to look at, I think for consumer sentiment is the wireless industry, cell phone industry. You can see where people’s minds are. You can see where every just everyday people want to buy what they want to buy, and how they want to buy, and you can adjust your sales process to meet them right where they’re at. You can adjust, your services to meet them right where they’re at because how they buy is very much important as what they buy it. It’s just as important though when I’m talking about being reactive and adjusting. There are some things I want to go through because as, as we’ve been shifting with, with reach outs, there’s, uh, in, in our industry, in the MSP industry, you know, everybody in the MSP industry knows that there’s this thing called a PSA, right?
And I don’t even know if many people even know what PSA stands for anymore, but it’s professional services, uh, so maybe I don’t even do that. Pro professional services. I don’t know. Uh, who knows. Administrate automation professional. Thanks, Ryan. He’s actually in the production room, professional services, automation, I even forgot what the fuck. Anyways, that is the system, right? That runs the entire organization. It’s very similar to an ERP in a manufacturing industry or another services-based organization. It’s what we use, right? IT professional services automation handles our tickets, it handles, uh, uh, to a certain degree, finances, it handles supposedly sales, right? As a CRM, there are a lot of things, that are supposedly bundled into one another. And I’m gonna talk about this tonight because I, I’ve talked about it before, and this is any services industry, right? There’s a, there’s a dude called Dan Locke.
And back when the pandemic started a few years ago, he found out as he was looking through to cut expenses, I remember talking with him about this and his number two, Desmond Yung talking with them about all the tools that they use, right? And they were a marketing company. And in my industry, in MSPs, there’s no difference. I mean, he came up with like something like 267 different tools that were being utilized, right? And out of those 267 tools, there was something like 80 or so that were actually being paid for. And I start to examine my own company with this, and it, it could be pretty close at sometimes, even though there are certain tools that people are in a day in and day out, there’s a lot that’s paid for, you know, all the way from, uh, you know, like things to, to push software out to different systems and plug-ins.
I’m talking even just plug-ins too. Like being able to connect one system to another system. There’s a, there’s an intermediary that, that sits there that you pay for on a monthly basis. So there are all these tools that you pay for and there’s, there’s one school of thought, right? That says to make a decision, right? And I’m talking about scaling here and, and growing. Make a decision about a tool that you’re going to use and make it now as if you’re making that decision three years from now. Do you know? So you can set this thing in place, and you don’t ever have to change it again. And you’re thinking three years from now, this is the same system that, that I’m gonna, using. That way I’m set up for, you know, if I only have 20 people right now, or only have two people right now, or only have four people, seven people working for my service organization, you know, it’s gonna work the same when I have 200.
So I’m taking three, three years down the road. I want to, I want to not change. And while that sounds super logical and actually pretty exciting because changing systems is a pain in the ass a lot of times, no matter how big or how small it is, it’s a pain in the ass. And there’s a lot of work that goes into it. I remember when we shifted, it reached out from ConnectWise to BMS. That was, uh, that was like a shoot. How long was that? That was like an eight-month process. And there were some reasons why it took that long. But now we just completed a project to move from CAEA BMS to Autotask as our PSA that I’m talking about, the system that runs everything because we have a new acquisition and we’re setting us up for that scenario to where it’s like three years down the road.
But if I look in hindsight, we shifted these things along the way. We stuck with one for like seven years, a long time because it served our needs. It was great. Never really had any forethought into it. It was just, and here’s the difference that I’m gonna call out tonight, that it was the right thing to do at the time. We didn’t think about seven years down the road when we would have, you know, the triple-digit employees, we didn’t think about even seven days down the road. We just made a decision on what we needed at that time. And that’s one of the things that I want to call out tonight because there are a lot of things as you’re looking at the tools, right? And you’re trying to get things done for one, I don’t want you to be a tool fucker.
I’ve talked this, talked about this before, is that you get so excited about a new tool and you end up like Dan Locke, like that example that I was talking about, where he got 267 different tools that he and his team were using, paying for like 80 of ’em or, so the expenses obviously add up, but it’s like, hey, tr let’s try all these new things and everything. But, uh, some of those things are trying to vet tools that you might need down the road that you might not ever use. You’re trying something out right now, and maybe you are just the one using it because now we’re getting into standards. Like everybody needs to use the same tool, but I don’t think any organization needs 267 tools, okay? I don’t think necessarily any organization needs 80 different tools that, that you’re paying for.
I mean, unless you’re doing like a billion dollars in revenue because not there yet, right? Reach out isn’t there yet. It will be in just a few years at, at our pace that we’re going right now, this will be a billion-dollar company in I’ll say three to four years, okay? This will be a billion-dollar company in three to four years. I’m just throwing that out there. That’s another important thing to do. You know, I actually sidebar, I was talking with somebody the other day and I’m like, you know, five years billion dollars and they’re like, I love how you think too small, Rick. And in, in part of it, they were joking, right? Because it’s like a really big vision that I have. But the other side, it was afterward she was like, you know what, no, I’m thinking like three years. I’m like, you know what?
You’re right. Because why am I limiting myself to that? But when it comes to tools, limit yourself to that shit, okay? 267 tools. You don’t need that many 80 tools that you’re paying for. You don’t need that many when you’re talking about major systems like a PSA, it’s great to try to think, and right now I’m having to make decisions that will have this ripple effect, these major decisions that will have this ripple effect down the road. Because while CAEA BMS was great at, at functioning for service delivery every single day, you know, I can see it functioning very well for an MSP that is doing under say, $3 million a year in revenue, right? I can imagine that back when Reach Out was doing under a million dollars in revenue, that would’ve been a great system too. But we struggled with it when we brought it on board because it just couldn’t do what we needed it to do.
It was very simplistic. This is very similar to other tools that are out there like Synchro, right? That’s another PSA. If you’re in this industry and you’re part of the, group right now, if you’re an MSP, synchro is another PSA that just is not ready for prime time for large MSPs. However, if you’re thinking, oh, I’m gonna buy what I’m gonna buy now so that it’ll serve me three years down the road, I’m gonna tell you this, you’re probably gonna make the wrong choice. You, you absolutely are because, uh, how do you know what your company’s gonna look like three years down the road? You may have a vision, you may have an idea, but a lot of times when you, especially if you’re under a million in revenue right now, you’re just trying, thinking about making a living, right? And the only thing that you should be worrying about, and this is, I’m, I’m pointing at everybody who’s on here, the only thing that you should be worried about if you’re under a million dollars is posting up more revenue.
Plain and simple. Sure. You have to be able to deliver your services and you need to automate everything as much as possible. I mean, even shifting with our acquisitions right now, there are things that we’re having to think about, right? Because I don’t know what you use ’em for payroll. Maybe you, if you have employees, maybe you use Intuit. A lot of small businesses use Intuit, reach out, and used Intuit at one point in time. We’ve used Paychecks, we’ve used Gusto, right? All of these companies are out there, and now we needed to make a shift to ADP because ADP is the one that can handle ingesting all these new people from, our acquisitions, from other service com, and from MSPs that we’re buying. And, but then you look at this, and I’m taking a look at some of our acquisitions and it’s like, geez, so much was done manually, you know, and it took up so much time.
So now it’s figuring out how we automate as much as possible so we can stay lean as we continue to grow. Because I don’t want all this overhead. So there are things like 401k because we provide our, employees with 401k, they can, they can deduct as much as they want off the check for 401k, but reach out matches 100%, up to 5%, which is amazing, right? Because most companies are like two or 3% or something like that that they’ll match, but reach out goes all the way up to five, and it’s also from day zero. There’s no waiting period or anything. It’s a good benefit that we provide to our people. But when you look at these things out there, like these small brokers that are around, I’m like, screw it. I don’t want to deal with it. So there was a tool and a system that we put in place called Guideline, and it’s out there, it’s a major one, but Guideline integrates with like Intuit, with Gusto, with ADP now to where it will actually take the payroll data and automatically create the deductions, automatically deduct your, your payroll bank account for that amount and manage the portfolio upon what you as your trustee of that portfolio, that 401k.
Or maybe you have an accounting person, I don’t know as much as you dictate, but it’s just automated. There’s no figuring out the amounts, no uploading information, there’s no manual anything. And that’s the only thing that I’m going to tell you that should be part of your decision. When you try to choose what do I need to do right now? Because you can plan all you want, and I’ve talked about Walt Disney before and how I have this thing in my head, but you can plan all you want and talk all you want at some point. You just have to freak start doing it because you can get yourself stuck in that rut of trying to choose the systems that you want to put in place to help you get the job done, to help you post up more revenue. Because if you’re under a million dollars, if you are under a million dollars in revenue, your only role as an owner as a c e o, as a president, whatever you call yourself right now, is to post up more revenue, is to gain customers, to gain clients.
Everything else does not fucking matter. So whatever you’re stuck on with systems, if they, if you’re looking for systems help have them help you generate more revenue or have them help you to take time off your plate so that you as the owner, as the CEO, as the president, can just spend your time on posting up more revenue. You know, everybody says it’s like money doesn’t solve a lot of problems, but you know what? It still helps, it doesn’t solve all the problems, but you know what, it sure helps. I’ve never seen a poor person who doesn’t want more money, okay? I’ve never seen a rich person that, uh, for that matter, doesn’t want more money because they have a different mindset and they can actually put more towards things, but it actually takes just as much effort to make the money as it does to keep the money. No bullshit, just as much effort, sometimes more to keep the money because you can blow it very quickly if you don’t put it in play. This is why private equity is out there. You actually lose money because of inflation. The dollar today is worth less than a dollar. 10 years from now, if you don’t do something with the riches that you’ve gained, that you’ve worked hard for, then that money value just goes away.
If you’re under a million dollars right now, the only thing to focus on is to post up more revenue, and whatever tools you decide, don’t start planning for three years down the road as far as how to deliver your operations. Just do what you need to do right now and keep it simple. Keep it as simple as possible. I’m not saying, you know, like go through and monitor how much you’re spending because if it does two things, there are two criteria as you’re looking at tools. If it frees up your time so you can go post up more revenue, it ta it, it, this is a connect booster in my industry, right? We were already doing automated payments. I was processing the payments manually myself and QuickBooks. Our customers were on auto-pay. I’m using air quotes on that. But really the auto pay was we would gain their information, QuickBooks, stored it securely, you know, it was fully PCI compliant, whether it was ACH or credit card, and then it was every single month, right?
Click receive payment, submit, right-click, receive payment, submit. That would take me about an hour and a half worth of time every single month when I was personally processing invoices. So from our customer’s perspective, they were on quote-unquote autopay just because they submitted an ACH authorization or a credit card authorization. But really there was nothing automatic about it in the back office. That automatic was me on a mouse clicking through and receiving payments in QuickBooks. I brought on a company called Connect Booster that would connect to my PSA, that tool that I was talking about, and automatically process those payments. People are like, oh, it only takes me an hour and a half. But this is the first reason why you should consider a tool is that it freed me up, even just an hour and a half a month to be able to go out and generate more revenue.
Your time is worth whatever your top-line revenue is, divide that by the 40-hour-a-week mark. Okay? So if it’s whatever it is on an annual basis, the number is actually divided by 2040, that’s the number 2 0 40 2040 hours. And that’ll give you the number of what your time is actually worth right? Now, I figured this out for myself the other day, and an hour’s worth of my time is like $8,000 because of the top-line revenue that Reachout currently produces. It’s like, now it makes sense, right? Because if I’m gonna spend $150 on a tool that frees up an hour of my time, I just saved or made $7,000. So the first reason to actually even consider a new tool is if it frees up your time as a CEO or an owner, especially when you’re doing under a million dollars of revenue per year so that you can go out and generate more revenue.
The second reason to choose a tool is to actually generate revenue for you. Now, there are a lot of things out there that could do this. If I speak about a service industry, you know, I’ve said on previous calls to where you should be releasing a new service as a service company, once a quarter, you should be adding something to your stack and your services at least once a quarter. In my industry, there are a lot of vendor shows, there are a lot of road shows. You go there, there are always vendor sponsors. You walk around, some of the bigger shows literally have like 200 different vendors there that all want your business as you’re going around to look for stuff. Don’t be a tool fucker and just get it because it’s cool, okay? Because it’s new and shiny, it has to meet one of those two criteria for you.
Either it frees up your time or it will generate more revenue for you. Frees up your time or generates more revenue that will help you make the decision by qualifying a new tool that way help you make a decision for what is the right thing to do. Right now, different decisions will be made when you’re bigger, like as, uh, as I said, as reach Out is continuing to scale. We move to Autotask just recently from ConnectWise or from Kaseya BMS because Autotask has a financial background. As we continue to push forward as different stages of a public company, there are different financial data we have to get out. We have to report certain things to the s e c. Our needs have changed. I never would’ve been able to guess that a couple of years ago when we were considering moving to Kaseya BMS, I never would’ve guessed that when we were on ConnectWise just wouldn’t have known.
There’s no way for me to know. So right now I’m doing what we need. Hopefully, this decision will help us last forever. But who knows, maybe we get so big, and then Autotask, we outgrow that in like three years. I, I got my people in the back, right? Especially Ryan who’s on like, starting to cringe because he’s still active in the operations too. It’s like we just made this big switch, but who knows? Maybe it’s Zendesk at some point. I don’t know. I don’t care. That’s the point is I don’t care because Autotask will allow us to do both of those things. It will allow us to free up our time for our people. That way we can import our acquisitions, and the data quickly, much more quickly. And then the second thing is, it will actually allow us to generate more revenue because of some of the ways that we can tie in some of the other things that we’re doing. It actually fits both criteria. I got a weird hair hanging in front of my eye right here. I think it’s time for a drink. Are that cheers? Okay, I’ve been talking for a long time. This is on my second sip. Geez, come on now. I better get out. I cheer for you. Whoever’s on. I see you. Let’s, let’s cheer together. Toast. So I hope you got a drink.
I hope this clears some things up for you today cuz uh, we’ve been going now for, geez, about 25 minutes already. I don’t have much more to give you tonight, but this is one of the biggest things I am as you’re choosing tools right now, don’t worry about three years down the road, if you’re in a service industry anyways, like I am as an MSP, if you’re in a service industry, it doesn’t matter because your industry’s gonna change. Like no joke you’re in, you can count on. I mean, that’s one thing about change, right? That you can actually count on it to happen? I mean, and especially if you don’t change <laugh>, it doesn’t stop change even if you don’t change, change still happens around you and then you’re just stuck and then you go out of business, especially as a service-based organization.
Now, in the future, as you start to choose these tools, just do what you need to do right now with some kind of maybe foresight of the future, right? To, sort of push it out just a little bit. But still don’t get caught up so much on that decision. Especially if it falls under those two criteria. It’s an okay decision for you right now today. If it frees up your time as an owner, as a CEO, and as a president, that tool is a good tool for you. It’s going to have good ROI to free up your time so that you can get out there and post more revenue, gain, more customers, and sell more shit. The second one is actually generating revenue for you. If it is if a tool will allow you to bring a new service to your customer base or to your prospects because that’s something more to sell. So of course it’s a good idea if you’re going to bring that on. And again, that’s a good idea to do it once a quarter. Don’t stress or fret over choosing a tool right now that might be the same tool that you’re going to use cuz you’re trying to make it the one that you’re gonna use five years from now. You just will not know if it meets those two reasons, that’s the way to roll. This was an amazing night. I hope you had an awesome time. Fricking Go ALL IN.