This episode of Sunny’s Silver Linings showcases IT By Design CEO Sunny Kaila’s conversation with Brian Hoppe, a strategic coach to managed service providers (MSPs). This engaging episode dives into Brian’s entrepreneurial journey, offering invaluable advice for new MSP owners and shedding light on common mistakes in the industry.
Here are the key takeaways from their conversation.
Brian Hoppe’s Entrepreneurial Journey
Brian Hoppe’s story began in the early 2000s, right after college, working in a break-fix IT environment. With the evolution of managed services around 2005-2006, he transitioned to managed services, gaining extensive industry experience. By 2015, he decided to forge his path and acquired his MSP in 2016, avoiding the challenges of building one from scratch. Brian successfully scaled and sold this business by late 2021, a journey filled with learning and growth.
Reflecting on his journey, Brian shared, “A lot of lessons learned in there and, and all of that. But the short story is I left that company in 2015 and in 2016 bought my own MSP because I knew I wanted to build something for myself, but I also knew that I didn’t want to grow it just from scratch.”
Key Advice for New MSP Owners
Brian emphasized the importance of niche focus and selective client acquisition. When starting his MSP, Brian initially dealt with a diverse clientele, including dentists, manufacturers and legal firms. He soon realized that having a vertical focus could enhance value propositions and increase enterprise value. He noted, “It does make for a much better value proposition for your key customers and for your niche. And then it also increases enterprise value when you have a focus like that.”
He also advised MSP owners to be selective about their customers. It’s crucial to evaluate whether each customer is profitable and aligns with your MSP’s ideal customer profile. “Most MSPs don’t take the time to actually figure out if they’re making money on a customer,” he pointed out. By analyzing hard costs, labor costs and the time spent on each client, MSPs can make informed decisions about customer retention and ensure profitability.
Common Mistakes MSPs Make
According to Brian, MSP owners often spend too much time on technical work rather than focusing on business growth. Many MSP owners, especially those with a technical background, find themselves involved in operations, which can hinder growth. He stated, “That’s why I see a lot of businesses stagnate around that one-to-two-million-dollar mark…because the owner is still so involved in the technical.”
Brian also stressed the importance of spending time on sales and business development rather than getting caught up in daily operations. “If they’re spending over 50 percent of their time out in the community developing business and selling, it’s usually a good indication. Yeah, this is going to be a growing successful company over time,” he explained.
Building a Strong Company Culture
Brian is passionate about company culture, describing it as the last competitive advantage. He uses a “culture guide” to define and exemplify core values through specific behaviors. This guide helps team members understand expectations and fosters a strong, cohesive work environment. He shared, “We built a culture guide that really talked about all of those things. Like, here’s how we expect our team to behave with each other, with our clients, and how we work as a team.”
He highlighted the importance of discussing and reinforcing the culture guide regularly, which can significantly boost team commitment and retention. A strong company culture attracts and retains top talent, ensuring that employees are passionate about their work and the organization.
Strategies for Growth and Success
Brian concluded the conversation with three key strategies for MSP growth:
- Join a Peer Group: Connecting with other MSPs for guidance and accountability.
- Implement a Business Operating System: Whether it’s entrepreneurial operating system (EOS), Scaling Up, or another system, having a structured approach to running the business is crucial.
- Get a Coach: High performers in various fields, from business to sports, all have coaches to help them excel. MSP owners should do the same.
Brian summed it up, saying, “Every high performer in the world has one. Business leaders, to golfers, to people who sing, they have a voice coach. And every high performer has a coach.”
Conclusion
This episode is a treasure trove of insights for MSP owners and entrepreneurs. From emphasizing niche focus and client selection to highlighting the importance of culture and strategic growth strategies, Brian’s advice is both practical and inspirational.
