A growing number of MSPs seem to be reaching the following conclusion: Maybe running a successful lifestyle business isn’t so bad after all. Indeed, earlier this decade thousands of VARs jumped into the managed services market with a common goal: Automate operations, drive recurring revenues, and vastly increase the value of their businesses. In some cases the goals are now changing. Some MSPs are deciding it’s time to focus on highly profitable lifestyle businesses rather than hyper-growth, high-valuation dreams. Here’s why.

This blog entry is based on four separate conversations that occurred over the past 18 months or so…

1. March 2011: During a phone call, the CEO of a $1.5 million MSP told me he was stressing out. Internal revenue goals for the year were about $2.35 million, nominal for many MSPs but a big jump for this particular company. The goals are part of a bigger long-term exit strategy for the company, which could be in jeopardy if the goals aren’t met. But here’s the twist: The company has nearly zero debt, zero outside investors, and the “high stress” goals are self-imposed. The CEO is just about ready to adjust the goals slightly downward, I suspect, so that he can spend more time with his wife and two kids.

2. October 2010: At N-able Partner Summit, I caught up with masterIT CEO J. Michael Drake and ETG CEO Mike Jones. Drake mentioned that he agreed with one of my recent articles about Five Year Entrepreneurial Fatigue. While masterIT and ETG continued to hum along, Drake said some of his MSP peers were struggling to generate growth and some were beginning to suffer from fatigue.

The conversation was also deeply personal for me. I arrived at N-able Partner Summit a few days after my brother-in-law died from cancer. I basically broke down during my conversation with Drake and Jones, and they managed to lift my spirits with some key reminders about what’s important in life. Ever since those dark days in October, I’ve reconsidered quite a few things about life, business and the pursuit of happiness. I also started listening more closely to MSPs who opened up a bit about their own family stories — rather than always asking about M&A multiples (which don’t seem to be rising, by the way).

3. September 2010: At Tigerpaw Partner Summit, President James Foxall told me he had some clear goals for the Tigerpaw customer base, which includes MSPs, VARs and telecom resellers. Sure, Foxall wants his customers to be incredibly profitable. But he tossed in this interesting twist: Many Tigerpaw customers are happy running lifestyle businesses, and if Tigerpaw can help that lifestyle business perform better, that’s just fine.

4. November 2009: At an HTG Peer Group meeting, there was heavy discussion about life-work balance. The peer group members — MSPs and VARs — have their spouses fill out a quick survey. On a scale of 1 to 10, spouses describe whether the peer group member is available for family activities, able to unplug from work, etc. Yes, many of the HTG Peer Group members are pursuing hyper business growth. But I suspect some members reconsidered their priorities after reading survey feedback from their own spouses.
Chasing Evolving Dreams

Don’t get me wrong: The managed services dream remains alive and well. MSPs can automate to ensure predictable recurring revenues that let dollars flow to the bottom line. In business there’s an old saying: “If you’re not growing, you’re dying.” But for a growing number of MSPs I hear from, expansion now means low double-digit — or even single-digit — revenue growth.

No doubt, some people certainly find happiness while generating hyper growth. I think the best hyper-growth people are constantly seeking out new challenges on multiple fronts. A prime example: ConnectWise CEO Arnie Bellini. During a January 2011 side conversation, Bellini asked me how I was holding up following my brother-in-law’s death. I appreciated his concern and I gave an honest reply… conceding that I sometimes cope by burying myself in work.

Bellini politely suggested that I find a secondary outlet. He noted that he’s always working on two massive challenges in life — one that’s business related, and one that’s personal in nature. Many MSPs have seen the business side of Bellini. But on the personal side, he competes in Iron Man competitions. And next up, he plans to swim the English Channel.

Read the whole story, written by Joe Panettieri, on http://www.mspmentor.net/2011/03/18/msp-ceos-hyper-business-growth-vs-personal-happiness/

Facebook comments

Leave a Reply

Your email address will not be published. Required fields are marked *