7 Things I learned from running and selling my business

Last week I received an email from a friend, Brad Wilson of IRIS Solutions, telling me they had just finalized the sale of their business and told their employees.

I asked him if he had any business lessons to share. He had this to say:

"You know David, that's a good question. Over the years I have juggled multiple roles, including Tech, Supervisor, Manager, Engineer, and Business Owner. I should also include Business Partner in that list.

After 17 years at IRIS, I probably have a hundred business lessons I could share with you. At the moment, however, there are a few that stand out.

Here are the 7 most important things I have learned during this process:

1. Hire for what you don't know

I am a good tech. I can adapt to changing situations. I develop reliable, scalable solutions that positively impact our clients. I am comfortable and effective in pre-sales. However, I am sort of limited when it comes to marketing, employee goals and plans, business accounting, and knowing the best way to operate efficiently.

A good MSP business can make money. We can make it by quoting one price and performing the task for less. Often we are able to do tasks for a consistent ~X% of quoted price. When you make money, you can sustain the growth of the business.

Yet each jump in sales adds to the level of complexity. I learned I needed outside counsel to meet the growing needs of our business. I was fortunate enough to be able to hire some excellent consultants to help.

In this order I would recommend the following types of consultants (with a shout-out to the ones we worked with):

  • Efficiency and Operations - You need someone to help you build a standardized process using your tools to make you the most efficient way possible. Sea Level Ops was our go-to in this area. They have MSP service delivery down cold. 
  • HR and Employee Productivity - Don't think that employees will just blindly follow you. They leave each day knowing they have a job to come back to. You need to have them leaving each day hungry to achieve their goals. MANAGEtoWIN was an essential ingredient to our success in engaging our people. 
  • Marketing - Simply put, hire somebody internally that you trust to do the work who has the experience, or outsource it. Don’t try to learn this portion of your business. You can do it but you don't want to learn a skill where you are not able to maximize your time. 
  • An Ethical Accountant - They can prepare tax returns for you, but it is your name on the bottom line. 

2. Focus on the business and the goals.

My goal was always to grow the business, but there is more to it than that. I thought for a long time that growing meant signing more clients. In reality, growing the top line is not as important as increasing the bottom line. The last full year before we sold the business we jumped 9% in profits. We did this because we created goals that were based around efficiency and not just more clients. We became a better company because we stopped chasing our tails.

We learned to create goals for the company from the top level, and make sure each individual has goals that support the company goals. 

3. Not everyone is going to have an ownership culture

Try as you might you are an owner and you look at things differently. If a potential client calls in at 3PM on a Friday, you think about how to capture the revenue. Employees typically think about how to capture the revenue on Monday. It is the nature of the game.

You have to learn how to promote the company brand in such a manner that allows employees to have an impact. To do this, we created a group bonus based on service revenue. Another option is to create profit-based goals.

Good employees are easy to come by, while great employees are hard to find. But all employees can be motivated to support your business if they are incentivized properly.

Extra tip: Build goals for each person that they can see their career path.

4. Learn to ask questions and listen, not direct and expect

My biggest lesson was that not all people think like me. I was expecting them to be my clones, a kind of “Mini-Me,” and then was disappointed when they were not.

Now I have learned each person has behavioral patterns that they follow based on habits and values. We have learned how to work with people differently based on their profiles, particularly in the way we communicate through written, verbal or non-verbal language.

If you have not taken a MANAGEtoWIN Talent Assessment, stop reading right now, do not pass go and do not collect $200. You can email Dave for a free one. Just go get this test and take it, and consider having each of your employees take it too. The assesments were extremely helpful in helping me learn this particular lesson.

We had a team discussion a few weeks back where a junior supervisor said to another employee, "Well, just tell me how to tell you when you make a mistake."

I just stopped him cold, because it was obvious he had not studied the employee's assessment summary report MANAGEtoWIN provides. If he had, then he would have seen the statements highlighted by the employee to explain their communication preferences.

The supervisor took a step back from the conversation and studied the employee's assessment summary. He learned that the employee in question communicates well when he is presented with questions or comments in advance of a conversation.

The result? The two of them agreed to meet in two days. The supervisor said he wanted to discuss five specific things. He gave the tech time to review the material and formulate a response. When they had the meeting the tech was able to articulate clearly what he was thinking.

5. Learn to love the Metrics

How can you expect a tech on the help desk to go faster if he does not have a goal? How can you expect an inside salesperson to sell to more clients without some type of measurement?

You should learn to love the metrics of your business so you can effectively influence the others around you. Of course, we all want more, but sometimes more can never be reached, or at least not today. If you want the help desk to move faster, they can, but does that really help if they start to miss items?

A popular metric in our business is "time to touch" and "first touch resolution." We have metrics for these items and when they start to fall out of standards we find out why. If we exceed standards we might have Whiskey Wednesdays at the end of a business day. 

Just wanting more always leaves you wanting more, but it doesn’t change things. Setting a clear, measurable goal and achieving it is how you get there. Recognizing success as a team is fun and encourages more success. 

6. You need a backup for your backup

NOPE, not data backup. You need to recognize your key positions and have backup plans for them.

You need to learn what the different functions of your business are and how each person can do them. If you are large enough (>10 people) you will have attrition. When people leave there will be a gap in the work that they were doing. You need to plan on them leaving and who can fill their shoes.

In reality you can probably do the job yourself, but you should be focus on running the business not doing all the task work. Spreading yourself thin is not scalable.

I learned this the hard way when our senior project manager had a death in the family and for two weeks I had to fill in. Nobody else could do the work because they were not trained in the process.

You should know how to do most all the roles inside of the company and as you grow you hire people to do them for you. Just keep in mind that you should have some cross training to confirm more than one person can do any role. Otherwise in a crisis you have to carry too much on your own.

7. The business acquisition process is complicated

The process of selling our business was long and complicated. You should reach out to a business advisor.

There are firms who specialize in seller and buyer representation and you need someone in your corner. Our purchase agreement had over 65+ pages of legal-ease and, to me, it read like gibberish. I could much easier understand PowerShell scripting.

We worked with George Sierchio at Cogent Growth Partners. I would recommend them to anyone.

Conclusion

It’s been a good run.  I’m very thankful to Chris, my business partner; Sarah, our CFO; every person who works at IRIS Solutions, and those who have worked for us in the past."