I SET A BOLD BHAG (big hairy audacious goal) for my team in 2018: grow to a $20 million MSP. Getting there would require a combination of organic growth and acquisition, strategic marketing, and the ability to manage hypergrowth, which includes solid processes, accounting discipline, and keeping a watchful eye an KPIs.
I was no stranger to hypergrowth. When I started my enterprise architecture consulting business, Cogentes, in 2007, we grew from zero to $3 million in about 18 months, then went back to zero even faster as a result of the financial crisis of 2008. We refocused on the SMB market and began the transformation to managed service provider. Referrals and word of mouth fueled a very slow, methodical growth, with a roller coaster of ups and downs.
A local telco, Pineland, offered to buy my MSP in 2017. While I wasn’t ready to sell, I did pull together some numbers and didn’t like what I saw, forcing me to look at my business in a new light.
First step was to get serious about marketing. We joined Robin Robins and landed some big customers with the first few campaigns. That effort catapulted our organic growth from just over $600K to almost $1 million in about nine months. After I saw the potential, I set our BHAG, and followed the principles of the Vision/Traction Organizer, a tool that’s part of the Entrepreneurial Operating System, to plan our strategy, which included acquisitions.
That drove my decision to sell my MSP to Pineland in 2019 and merge it with their other MSP, which gave me the resources to turn my goal into reality as chief revenue officer of the later rebranded Responsive Technology Partners, an independent company with two telcos as shareholders. Since 2019, we have acquired four other MSPs, giving us 10 offices in four states.
Here’s some tips for managing and fueling hypergrowth:
Choose the right acquisition. The MSP must be in one of our geographic service areas, profitable (we’re not looking for fixer-uppers), operationally mature, have a good customer satisfaction rating, have synergy with our verticals, show growth potential, and fit our culture. The same PSA and RMM platforms that we use are “nice to haves” but there will be migration work even so.
Put business processes in place. Growing fast strains every part of an organization. So, we appointed a chief of operations and created processes that would enable us to work across state lines and share resources. Then we revisited and revamped them to scale up.
Use metrics. We measure and monitor KPIs for signs that things aren’t working so we can make adjustments quickly.
Ask for help. None of the leaders of the acquired companies had run a large managed services organization, so we engaged a ConnectWise consultant to help us implement the processes within ConnectWise PSA to help us scale.
Build an accounting team. With multiple locations it’s critical to have a system to track inventory, and in our case because we’re owned by telcos, prepare for yearly audits.
Move forward when everyone else is pulling back. In early 2020 we noted how the pandemic would impact the supply chain and started buying refurbished equipment to sell to our customers so they could move to remote work. We let them use our RMM and worked with our voice partner to offer free VoIP service. We reached out to all the chambers of commerce in every market we serve, offering our resources. Our efforts reaped tremendous organic growth, which also gave us the confidence to acquire three MSPs that year. This year, rolling into a potential recession, we are making plans to capitalize on opportunities created by competitors pulling back.
Double down on marketing. We continue to employ Robin Robins’ marketing platform and added what we call “360-degree touch marketing” to increase the number of times and ways we reach prospects using phone calls, email, social media, and search engines. It’s really driven the response rates up.
With these measures in place, we stand a great chance of hitting that BHAG at the end of this year. And I’m enjoying the ride!
Photo: Justin Evans
