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Have You Asked Yourself Why You Want to Grow Your IT Consultancy Business?

June 08, 2012 | Comments: 0 | Views: 160

In my day-to-day Consultancy role offering advice to IT companies and Managed Service Providers (MSP's), when I first start working with a new MSP client I always ask the owner what their goal for their business is.

Invariably the answer will come back "I want to grow the business".

I then ask them what business growth looks like for them. If they are a one-man-band they will often say "Take on two employees in the next twelve months".

If they are a small MSP they might say "Increase turnover to $500,000". Slightly larger MSP's might tell me they want to "Improve Service Delivery".

My next question to them is then... Why do you want to do this?

A Few Examples

This question often stumps people, but it's the most important of all for any goals you set for your business - why do you want to achieve this goal?

Scaling the Business

Take the one-man-band in my example. The owner says he wants to "Take on two employees in the next twelve months". Why is this?

After discussion we find that it's not that the owner has an overwhelming desire to employ people - it's that he wants to ease some of his responsibilities within his business, leaving him more time to concentrate on the things within his business that he enjoys.

With many people I speak to in this situation, handing off responsibilities does not necessarily have to mean taking on employees. I help the owner to examine their current workload and highlight the jobs they don't want to do themselves. We often end up setting a plan to outsource administration and credit control, automate repetitive jobs like client backups and patching, and bring in help for that web-site upgrade.

Taking these steps brings the same results as bringing on employees, but more quickly and with less overheads.

Increasing Revenues

In the example of the smaller MSP I mentioned, increasing turnover to $500,000 seems a reasonable goal. But why does the owner want to do this? Firstly - there is the old phrase "Turnover is vanity, Profit is sanity". Anyone can increase turnover - just trying selling $10 notes for $5 and you'll find no end of customers! But it's not profitable. Therefore any goal based on turnover is flawed.

Similar goals that are based on the number of employees a company wants to bring on-board also don't hold up well under scrutiny. As somebody who has been there, I can tell you that I'd much rather be the owner of a 5 man business that pulls in a $100,000 annual profit, than a 20 man business that pulls in a $50,000 annual profit! 20 people are a lot more difficult to manage than 5...

Back to our example, and upon further examination of this particular business owners goal, the owner said that the figure of $500,000 turnover came after he calculated that at this turnover the business would be able to afford a full-time sales person which he believed would help take the business to the next level.

It turns out that this particular business owner felt hugely uncomfortable meeting new clients in a sales situation. He figured handing over that responsibility would make his life easier. I assured the owner that this feeling isn't uncommon. We discussed this situation and agreed that rather than work towards him abdicating the responsibility for sales, we set a new goal of the business owner learning new techniques to become more comfortable when meeting with prospective new clients.

Improve Service

Finally, the MSP owner from my example who wanted to improve Service Delivery. Why? It turns out the owner was sick of clients telephoning him at all hours to chase outstanding support tickets where the client wasn't sure what was happening with their problem.

In this example, the goal was in the right area - but improving Service Delivery is such a wide ranging topic that it's hard to measure whether you've succeeded or failed. Improving Service Delivery might reduce the number of tickets you log, or improving Service Delivery might decrease the time to closure of tickets, but will it reduce the number of clients telephoning the business owner to chase outstanding support tickets? Maybe - but setting defined targets for the Service Delivery team to communicate with clients who an open ticket to set their expectations and to keep them informed seems much more specific to the problem at hand.

Know Why You Want to Grow

In all our examples, without examining and clearly knowing why you want to do something, it rarely happens. Once you've got the "why" clear in your head, you can tackle the "how" specifically - and a specific "how" is often a lot simpler and more powerful to achieve than you first realise.

As the former owner of an award winning IT Managed Service Provider, Richard Tubb works with MSPs to help them increase sales, take on employees and build up relationships with key industry contacts. You don't have to do it alone any more - contact Richard and have a chat about your needs and how he can help you.

Follow Richard Tubb on Google+ ( ) and for more news and advice for MSPs subscribe to Tubblog ( )

Source: EzineArticles
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