Derek Anderson, Owner of Biztek Solutions, Inc. was able to grow his business 30% YoY and closed 400% MORE in new business WITHOUT needing any more leads! Below he shares some of the strategies behind that success.
What are the top three business indicators you use to measure your MSP business and why?
- “Our monthly recurring revenue is our biggest indicator of growth. It helps us with forecasting because we know what to expect for revenue coming in month over month.
- Next is net profit. This helps us make sure we’re keeping costs in line and being prudent in our MSP business and it ensures the business is healthy because, in the end, we’re here to make money and be profitable. (Editor’s note: Derek increased his net profit by 972% between 2020 and 2021!)
- The third indicator is what I call our Labor Efficiency Ratio. This is to help ensure that our labor costs are in line with our revenue, which also contributes to making sure our net profit is in line. Because labor tends to be the highest cost so keeping track of that efficiency ratio helps us make sure we’re keeping our net profit in line.”
What is the top lesson you had to learn that allowed you to kickstart your MSP’s business growth?
“I had to learn how to put a sales system in place. For more than the first couple of years, I didn’t have a sales process and so I approached every new opportunity differently. I quoted and proposed differently each time. Over the past couple of years, because of COVID-19, we had to really define a sales process, something that could work virtually. That system is still working to this day. Now we’re able to take our prospective clients through the same repeatable process to learn about their business, share who we are as an MSP and what we’re about as a company, and then consistently present our services and value.
With this system, we can do our sales presentation almost 100% virtually. Sometimes we do get on-site for meetings and assessments, but it’s also really helped us speed up our sales process to get clients to buy when they’re ready. As a result of putting this sales system in place, we’ve increased our conversion rate from 10% to 49%.”
What is your single secret to success this past year?
“In the past year, we doubled down on digital marketing with a heavy investment in pay-per-click advertising. That combined with our sales process allowed us to capture qualified leads and convert those sales leads quickly. That was a great combination that allowed us to capture a lot of new clients.”
What would you say is the biggest challenge you had to overcome this past year related to reaching that growth as an MSP?
“Finding and hiring quality candidates and keeping them so we can continue to grow our team and keep up with delivering our services to all the new business we’re bringing in. We’re in constant hiring mode—constantly receiving applications and interviewing and looking for top talent. Because there is a shortage of talent out there, we’ve had some key people leave because there are other offers out there that we just can’t match.”
What partners or tools helped you along the way?
“Datto is a big partner. All of our clients’ servers are protected with a Datto backup and disaster recovery appliance and then we also use the Datto Backupify, which backs up and protects SAS application data. We primarily use that to protect Office 365 data because we’re moving a lot of our clients to the cloud, so as we’re getting servers out of the office and putting data into the cloud often times it’s heavily into Office 365 and so we’re utilizing that product to back up that data.
Last year, we also migrated our RMM to Datto and changed our documentation platform to IT Glue, which is a Kaseya product. We use Autotask for our PSA ticketing. With that combination between our Datto backup, IT Glue, and Autotask, now we have this nice seamless integration between these products. They all integrate and work well together, so data flows nicely between them and that’s really helped us save time and deliver support for our clients and make sure that our data is consistent between these different portals.”
Who would you say is the most impactful business leader whose techniques or leadership style you try to emulate in your MSP or are influenced by and why?
“I’ve been following Darren Hardy for a long time. I love that his message is always positive and uplifting. He provides simple, easy-to-implement strategies that can make an immediate impact, not only in business but in your personal life and relationships. Even though it is really business geared, if you look, this applies everywhere in life. He’s personally created and led several successful businesses and through those, he’s had the opportunity to interview practically all the top business leaders. He shares what he’s learned from them along with their insights into strategies and what drives them and then that really positions him to provide insight and share it with anybody who’s following him and reads his books. He’s also got a daily message that he calls Darren Daily, which is a daily inspiration and not only insight from him, but other key leaders.”
If you were going to recommend a book to other MSPs or SMBs trying to grow their business, what would you say they should read?
“I have two favorite books, I always recommend. The first one is The Compound Effect by Darren Hardy because I am a Darren Hardy fan, and he talks about how small, incremental improvements over time yield big results. And the second book is Never Split The Difference by Chris Voss. That helps you learn how to listen, communicate, and negotiate, and these are all tools that are key in daily activities with your team, your clients, and even personally.”
What words of wisdom would you give to other MSPs who are looking to grow their business or build a successful exit?
“You must focus on building a strong team and track your numbers. You can’t build a great company and grow unless you have great people because you definitely can’t do it alone. And then you’ve got to take care of your people and build a strong culture. One of my key points as the leader of an organization is that I serve them, and they serve the company. I think that’s really key to being able to grow and keeping people happy, which then will keep your clients happy.”