How Smart Businesses Survive After Losing Their Biggest Customer

  • Company:  TotalCare IT
  • Founded: 2007
  • Headquartered: Idaho Falls, Idaho
  • Geographic Market: Idaho Falls, Rexburg, and Boise, Idaho; Southeast Idaho
  • Top Growth Indicator: Recurring revenue
  • YoY Percent of Growth: 2017 over 2016: 34%; 2018 over 2017: 11%; 2019 over 2018: 6%
  • President/CEO: Aaron Zimmerman

What are the top three metrics that you use to measure your business and why?

This depends entirely on what area of the business you’re looking at. At TotalCare IT, we have specific metrics to measure success in operations, sales, marketing, and revenue.

For example, from an operations standpoint, one big metric we keep track of is how many service tickets we get in a day and how long they take to be fulfilled. Our target metrics are 30 minutes for acknowledgment of a ticket received and no more than 60 minutes before an engineer is working on the project. After that, it should take no longer than four hours for a project to be closed, provided we don’t need to order a part or wait on additional information from the client.

There are also various other sales and revenue key performance indicators (KPIs). We measure how many marketing touches we make in a week, how many projects we close per month, and how many first-time appointments — what we call “butt in seats” — we’re able to schedule with prospects.

What is the top lesson you had to learn that allowed you to kick-start your business growth?

Choose the right prospects.

In order to really grow my business, I had to learn how to go after the right clients. There was a time when I was willing to sign anyone who would write me a check. That rarely worked out for the client or my business. Small businesses today need an MSP that can focus on cybersecurity to protect their data, their employees, and their reputation. Unfortunately, many small businesses either don’t know why they need this service or can’t afford the level of service they need. I had to learn to target bigger, more mature businesses that could afford the service they needed to protect their data and IT needs. Once I came to terms with that, we saw huge growth.

What would you say was the single “secret to your success” this past year?

Picking a system and sticking to it.

Whatever internal system you bring in to operate or manage a business, whether that’s a marketing system or a sales system, if you’re changing it every 3–6 months, then you’re always starting over. If you pick a system and stick with it, you’ll start to see results.

Robin Robins’ Technology Marketing Toolkit is a great example. She has a very full catalogue, and if you stick to her system, you’ll typically see results from it. In the past, we took a shotgun approach as we tried to narrow down what worked. For TotalCare IT, we saw much better results when we learned to stick with a system for longer than two months. By learning to stick with the systems on the operations side of my business — the system for sales and the system for marketing — we started to see far better results.

What was the biggest challenge you had to overcome this past year relating to your business and growth?

The biggest challenge we faced this year was the loss of our largest client.

This was both a successful and a painful lesson. It was a success because we’d served this client for four years and did a very good job for them. However, they’d reached the point where they needed dedicated in-house IT support, which is something we couldn’t provide. Though we parted ways on good terms, it was still painful to lose such a big chunk of revenue.

To be honest, there were some sleepless nights. Losing 10%–12% of our monthly revenue like that was scary. We still had to make our financial commitments to our employees and vendors. Fortunately, we made it work, but it was a strong reminder to never rely solely on your biggest client. You never know when you’ll lose them.

Who would you say is the most impactful business leader or business thought-leader whose techniques or leadership style you either try to emulate, follow, or are influenced by and why?

I have three answers for different areas of business.

In marketing, it’s Robin Robins, obviously. I’ve been using her system since April 2013, and it’s completely changed how I do business. She’s taught me not just how to market my business but also how to market myself. I’ve learned how to brand myself, which in turn boosted my own confidence in what we offer as a product.

In operations and sales, I look to Gary Pica, founder of TruMethods. He taught me the importance of numbers across my business, including sales and KPIs. Beyond just recording numbers, Pica also taught me how to interpret the data to look for trends, find areas of improvement, and essentially, how to make my business more profitable.

Last but not least, when it comes to general business management systems, I look to either Gino Wickman of the Entrepreneurial Operating System or Mike Michalowicz, author of “Profit First: Transform Your Business From a Cash-Eating Monster to a Money-Making Machine.” Wickman is all about overhauling the way you run your business to make it more efficient. Meanwhile, Michalowicz focuses on the importance of profit and paying yourself first. He explains why you need to be taking the profit of your business gained from your hard work and effort before paying for your operational expenses. This teaches you to be more mature and responsible with your spending.

What book would you recommend that other MSPs or SMBs trying to grow their business should read?

Make that books, plural. My recommendations are “Traction” and “Get a Grip: How to Get Everything You Want From Your Entrepreneurial Business” by Gino Wickman as well as “Profit First” and “The Pumpkin Plan: A Simple Strategy to Grow a Remarkable Business in Any Field” by Mike Michalowicz.

Michalowicz really focuses on his passion for helping small-business owners get out of what he calls “entrepreneurial poverty.” So many business owners work hard all the time but are still broke. He teaches you how to escape that cycle as well as grow your business, attract good customers, and understand the real value of profit.

As for Wickman, his advice transcends any industry. It doesn’t matter what kind of business you’re in; at its core, every business needs an operations system that works. Once you have a system put in place, you will have accountability, and stuff starts getting done.

I’ve worked in IT for 28 years. Before I started TotalCare IT in 2007, I didn’t have a clue how to manage a company. I didn’t know how to budget for a company, sell a product, or market my business. These are things I had to learn myself. Reading Wickman’s and Michalowicz’s books went a long way to turning me into a CEO with a successful business.

In closing, any specific advice or “words of wisdom” that you would give to other MSPs looking to grow or build a successful exit for their business?

Pay attention to your market. What do you need from that market?

When most businesses open, their priority is to grow their business, so they look for a market where they’ll have enough clients to do that. However, clients aren’t the only thing you need to grow your business. For example, TotalCare IT is one of the only MSPs in Idaho Falls. We have many clients to work with. However, when I put up a job listing to hire a new employee, it can take months before we get a good candidate. There aren’t many people in our market with the skill level we need to give our clients the quality service they deserve. We have to take this into account when looking at our growth potential each year.

It’s not enough to get into a market with available clients. You need to make sure the personnel resources will be there to make your business successful. Otherwise, everything will be just sitting on your shoulders.