27 minutes | Nov 23rd 2020

Episode 54: How to buy another MSP

In this week's episode Did you know one of the quickest ways for an MSP to grow... is to actually buy another MSP? But a lot of people think that buying a business is out of their league; assuming it'll cost too much money or be overly difficult. This week on the show Paul's joined by an MSP M&A (mergers & acquisitions) expert to dispel some myths and help you identify the opportunities, and potential pitfalls Also this week - times have changed and you can no longer rely on just one particular way of gaining new clients. Paul explains the importance of having multiple marketing pillars Plus how to properly brief a Virtual Assistant. If you're toying with the idea of using a VA, in this episode Paul helps you get the most from them Show notes Out every Tuesday on your favourite podcast platform Presented by Paul Green, an MSP marketing expert Find out more about marketer and business consultant Jay Abraham and his books Paul mentioned the brilliant book They Ask, You Answer by Marcus Sheridan Find out more about the brilliant physical time-tracking tool Timeular Paul mentioned the project management software Basecamp Here’s a link to the MSP Marketing Group on Facebook Paul's special guest was MSP Commercial Solutions expert Daniel Welling talking about how best to buy or sell an MSP business in 2021 - check out his website here Many thanks to Chris Timm from Sondela Consulting for recommending the books The Ride of a Lifetime by Disney's Bob Iger and Never Split the Difference by Chris Voss Please recommend a book you think will inspire other MSPs here paulgreensmspmarketing.com/podcastbooks Paul's special guest on December 1st will be Steve Taylor from RocketMSP talking about current trends in MSP marketing Please send any questions, ideally in audio-form (or any other feedback) to hello@paulgreensmspmarketing.com Episode transcription Voiceover: Fresh every Tuesday for MSPs around the world. This is Paul Greens MSP marketing Podcast. Paul Green: Right come on then, let's do it most podcasts for November before we get into the final months of frankly, what's been a crazy year. Here's what's coming up on today's show. Daniel Welling: They need to be aware of your interest at the time when they're ready to sell. Paul Green: I'll also tell you later on about a fantastic free marketing resource that already more than 1000 MSPs are using. We'll have Chris Timm on. He's the PSA expert and he's got not just one, but two books suggestions for you today. Plus, we'll be talking about the proper way to brief a virtual assistant. Voiceover: Paul Green's MSP Marketing Podcast. Paul Green: So, I was talking to a brand new MSP clients I started working with just a few weeks ago. One of my usual opening questions is of course, how do you currently get clients for your business? And, this particular MSP had just one way of getting new clients, which was referrals. And, it wasn't a formal referral system, it was actually a sit back and wait for clients to turn up kind of system, in that they were really good at what they do. Their clients love them. And, it seems that around about every couple of months or so, one of their existing clients refers someone new to them, which is great, except you are not in control of that in any way whatsoever. And also, that's only one way of getting new clients into the business. And, we started talking about something that I learnt years and years ago from a marketer called Jay Abraham. Paul Green: Now, if you've never looked at Jay Abraham stuff, he's worth is very much worth a Google. Jay Abraham is... He might be offended to hear me say this, but he's very much the grandfather of marketing today, of all marketing really that's done by businesses like ours. He taught all of the great, so any great marketer that you look at is either being taught directly by Jay Abraham, or has been taught by one of his proteges. Personally I've spent, Oh, it must be getting on for a 10, $20,000 on Jay Abraham stuff over the years. I've bought loads of his audio courses back when they used to be cassettes and CDs. I once bought his hard drive. It wasn't one that been stolen from, it was like a thing where they were selling the unlimited contents of his laptop. And it was every single course he done, and every single recording. Paul Green: And for a couple of years, there was a lot of audio stuff. I was listening to that in the car, and I learnt so much from that. In fact, just talking about that makes me think I should get that hard drive out again and give it another listen. Because every time you listen to Jay Abraham talk, or you read his stuff, you learn something new, and it's proper, good, direct response marketing stuff. And, one of his basic principles that he teaches is the Power Parthenon Philosophy. Now I'm never going to explain it as well as Jay Abraham does, but essentially if you think of the Parthenon, so you think of a great big, I don't know, Greek Roman building, whatever the Parthenon is, and you imagine that the roof is being held up by one pillar. Paul Green: And, let's imagine that pillar is referrals. Like we were just talking about with my MSP client. Well, that makes that roof rather precarious. You've got that one pillar in the middle, the roof could easily topple over, that's not a particularly good way of keeping it. So at the very least, you want a second way of bringing new clients into the business, and that means you'd have a pillar either side. So now your roof is more stable, but what if you put in another two, three or four more pillars like the Parthenon. You go and Google Parthenon and you see a building with lots of different pillars. And, this is what you need for your marketing. Yes, referrals are great because people turn up almost ready to buy, but you also need to do some list building. You need to have an email database. Paul Green: You need to be mining LinkedIn. You need to be doing some online advertising. You need to be doing some direct mail. You absolutely need to be doing outbound, telephoning, not telesales, but telephoning. You also need to be doing, They Ask, You Answer, which is the book on content marketing. And, it's the right long-term strategy for your MSP to have an inbound content marketing strategy. It just takes a few years to get there. See, all of these are pillars. They're all pillars of your marketing, because some of these things won't work. You might have a couple of months where your online advertising isn't working. In fact, we've had that recently. We switched to a new online advertising strategy, and our money has not been delivering results for the last month or so. So yeah, we've wasted some money on advertising, and we suddenly discovered some more ways not to do online advertising, but that hasn't brought the business down to its knees in one month, because it's one of just many things that we do. Paul Green: We have many, many pillars. You should do exactly the same thing, so that when one of those pillars goes away, whether that is temporarily or whether that is permanently, it doesn't matter, you've got other pillars to stop the building from collapsing. I mean, just look at COVID. COVID has pretty much wiped out events. Any MSP that I've been working with who was overly reliant on networking, on going to their weekly BNI or whatever meeting they're going to, has found that you cannot get the kind of referrals out of doing Zoom versions of networking, as you can from meeting people in a room. And, that was quite a wake up call for people who are overly reliant on networking. Quite understandably. You can't have just networking as your only pillar. You've got to have multiple pillars for your MSP. So, the first thing for you to do is to figure out how many pillars do you have in place right now? Paul Green: And, having a website is not a pillar. A pillar is proactive action. If you have a human being picking up the phone on your behalf, that is a pillar. If you have someone sending out stuff in the post to leads into prospects, that is a pillar. If you're directly driving traffic, and you're spending either time or money driving traffic to your website, that is a pillar. So, just having a website in itself, isn't a pillar, but proactively driving traffic to it is a pillar. Start by listing all of the marketing pillars that you've got for your MSP. And then once you've done that, you can see if you have enough. Someone's inevitably at some point going to say to me, "How many pillars should I have?" And, the answer is as many strong pillars as you can maintain. We must have somewhere between six and seven strong, proactive, constantly maintained pillars going into our business. And, that's a lot of work. Paul Green: A lot of my team and a lot of my personal time is spent on marketing our business, because that's the right thing to do. If you've only got a couple of pillars right now, you'd be much better off focusing all of your attention on generating four strong pillars than having six or seven weak pillars. So, you definitely want those pillars to be strong. But wherever you do, if you're looking at your pillars and you're thinking, "Oh my goodness, we are very, very reliant on this and on that," and that's it, then as a matter of priority. And, perhaps this is a good January project for you, you should be setting up new pillars of marketing within your MSP. Voiceover: Here's this week's clever idea. Paul Green: Back in episode 41, which was back in August, I told you that I'd got a full-time VA, virtual assistant. Paul Green: It was the same time I was telling you about Timeular, which is the time tracker that I'd been using, and how essentially I'd completely revolutionised my time, and what I was doing within the business. Again, it's one of those lessons that you seem to need to keep learning, or certainly I do. Well since then, I've hired a second VA. In fact, there are now three VAs working within my business, all doing very specific functions. And, it's been wonderful because I've been able to really accelerate doing the things that really only I can do, such as this podcast. This podcast takes me hours and hours to record, and set up the interviews, and all of that kind of stuff. But really, only I can do that. Whereas anyone in the business can answer basic emails, asking for copies of invoices, and answering repeated questions, and all of that kind of stuff. And, that's what the virtual assistants are doing. Paul Green: Now I've discovered since August, how to effectively brief virtual assistants. Because, the people that we've got on board are amazing. They really are amazing. We've been very, very lucky with the quality of the people that we've been able to attract into the business. And I did use an agency, so maybe luck had nothing to do with it. It's just the agency has done a good job, and we've worked very closely with that agency. But, you really do get better results when you brief your virtual assistant properly. And, what I've discovered is that you need to almost over brief them. You see, the problem is when you and I brief someone to do something on our behalf, we, without thinking about it, assume that they have the same information that we do. So, we know in our heads that we want to get something done in a very, very specific way, and there's a specific outcome that we would like. Paul Green: And, because we've had sometimes days, weeks, maybe even months to think about this, we assume that, that full and complete knowledge that's in our head is going to be in their head as well. Because surely it's all obvious, right. Surely everyone should think like us, but they don't. They really don't. In fact, if I was to ask your staff, "What's the number one frustration in their lives?" They would say, "It's when you get annoyed with them for not doing something you haven't asked them to do, and you didn't tell them how you wanted it to be done." We all do this as business owners. We're absolute nightmares. We're monsters to work for. We really are. So, when you brief a virtual assistant, I believe you need to do that brief in two or three ways. And yes, this will seem like overkill, but I promise you, this gets the best outcomes. Paul Green: Well, it gets the least number of questions and it gets the best outcome. So, when I'm going to brief a virtual assistant, I will, first of all, sit down and figure out exactly what do I want them to do, and how do I want them to do it? And, I actually sit down with a piece of paper, you remember paper, and a pen, which is like an inky thing that you used to put marks on paper. And, I've just found it easier to sit down and kind of dump my brain onto that piece of paper and think "Right, when I do this job, or if I was going to do this job, how would I do it?" "What would I do?" "How would I set that out?" "What order would I do that?" I dump all the things down on a bit of paper, then I sort of move them around, I order them. I will number them in sequence until I've got a very, very clear idea of how the job should be done. Paul Green: Then I will write a specific brief, and that specific brief starts with some context. Now the context is absolutely everything. So, let's imagine, for example, I'm briefing my virtual assistant to send a specific letter to a specific client in a specific way. Just pick that one as an example. So, I will start with a bit of context and I will say, "Hi name, this is an exercise that we do once every month in the business, because..." And, I'll explain why we're sending the letter. So, it could be that this is a sales tool, or it might be a follow-up piece, or it might be a customer satisfaction piece or something like that. But, I'll tell them in quite a lot of detail. Paul Green: And remember, this is a written brief, exactly what it is we're doing and why we're doing it. Because I've discovered, in fact, this goes for any staff, when you give context and you explain why we're doing something, and why is that critical word, they really understand the importance of it, and they understand why it needs to be done in such a specific way. So having set out the context, I then set out the outcome. And, I'll say that the outcome for this is that this letter set out in this particular way, arrives at this specific client on this specific date. So, they now have an understanding of exactly what it is that I want, and they have an exact understanding of what I consider success to be, what the outcomes should be. This is a major achievement. If you could do this every single time you brief anyone to do anything, that would be a very, very powerful thing. Paul Green: Then I list the steps in order. And I will literally, there might be five or 10 different steps, but I will lay it out in order. It's not quite a checklist, but it's a numbered set of steps. And, there's a level of detail that you don't need to get into. So if, for example I'll say, "Log into the CRM." Then, if I know that they know how to log into the CRM, I don't provide extra instructions. If it's something that they haven't done regularly, or they've never done before, then I might link that to a separate standard operating procedure which tells them how to log into the CRM. What you don't want is to have every single step explained in every single way, because that's just too tiring. But, I'll make sure there's enough detail in each of those steps that they can literally follow that through step-by-step-by-step-by-step, and they will reach the outcome that I have asked for. Paul Green: So essentially, I'm taking away the thinking work from the VA. Now I'm not doing that for any offensive reason. These are very intelligent people who are very good at what they do, but I don't want there to be any ambiguity whatsoever. I want this job to be done in a very specific way, the way that I want it to be done. Now the next thing I'll do, and this seems overkill, but trust me, this really makes a difference, is once I've reviewed the set of instructions, I'll then film video of me doing the instructions. So, I will literally go through my own instructions, recording my screen, and talking about what I'm doing and go through the instructions. Now I realise that at this point you might be thinking, "But Paul, this is going to take so much time, maybe I should just do the job myself," but you're missing the key point here. Paul Green: They're going to go and do a brilliant job first time without coming back to you with any questions, because you have briefed them thoroughly. And obviously, this works really well when it's a repeatable tasks that someone's doing again and again. But even if it isn't, even if it's just a one-off task, it's just not something you personally really need to be doing. Videoing yourself going through those instructions adds more context, it gives them more confidence and you'd be surprised how often you get to one of those instructions and you realise that you really haven't explained it as well as you could have done. And, it's only in the video where you can actually really truly explain it. Now, I only personally put all of these briefs into our project management software. We use something called basecamp.com, which is quite a lovely piece of software actually, and very affordable. But, which ever project management software you use, or even if you just pop it into one note, you can do a brief like this where everything just goes into one place. Paul Green: It's a very, very powerful way of briefing a virtual assistant, or in fact, any member of your resources team to get stuff done, so that you personally don't have to do it. Voiceover: Paul's blatant plug. Paul Green: More than a thousand MSPs are already part of this community, and you are very welcome to come and join them. It's the MSP marketing Facebook group. It's my group, which I've been running for a number of years now. We hit a thousand members earlier on this year and that's a thousand MSPs, because this is a vendor free zone. It's where MSPs can come and talk about marketing, and growing their business in a very safe environment. I'm there every day with loads of advice and information, and free resources to help you grow your MSP. So, come along and join. All you got to do is fire up your Facebook, type in MSP Marketing up at the top, go onto groups and you can apply to join for there. There will be a short delay as my team vets you, and checks that you are an MSP, and not a vendor in disguise. But once you're in, it's an amazing resource. And, I'd love to see you there, and have a chat with you about growing your business. Voiceover: The big interview. Daniel Welling: I'm Daniel Welling, former MSP business owner turned consultant to the stars and most recently M&A expert. Paul Green: And, that's what I want to talk to you about today Daniel, M&A or mergers and acquisitions, put another way, buying someone else's business. Now, just before the interview, you were telling me that there are loads and loads of MSPs looking to buy a competitor right now, but there are only a small number of MSPs that are actually up for sale. Daniel Welling: Correct. And that's the log jam in the market. Paul Green: So, are you seeing right now lots and lots of buyers going after those small number of people who are ready to sell up? Daniel Welling: Absolutely. And, I think the challenge for those wanting to buy is actually identifying who might be for sale. And of course, within that, they have to identify the MSP market to begin with, within their chosen geography or market sector. Most MSPs listening to this conversation will probably have had some kind of approach recently from another MSP, or someone represented an MSP looking to acquire. Paul Green: But, do you think this is a good time to acquire? Because obviously, we're in the middle of COVID. We can all see that there's going to be a disruptive economy next year. If you were running an MSP again right now, would you be looking to grow through acquisition? Daniel Welling: There's never a good or bad time, I would say to consider an acquisition. There's been impacts to the market, both positive and negative. The MSP sector, I think collectively considers itself very lucky during 2020, that it's been one of the more resilient of industries. Those businesses that are surviving and thriving all need IT, management, support, guidance, change to adapt their business. So, the MSP has become as indispensable as any other service provider that they work with. Paul Green: So, you've advised a number of MSPs through identifying a target and then acquiring that target. Start at the beginning and tell us, how do you go and find someone that could be up for sale? Daniel Welling: The method I would use is very similar to acquiring end-user clients. So, identify what your niche is. Consider the geographical location, is probably the primary, as the buyer will be considering the practicality of integrating their business with the target. So, being close by has an advantage to that. They're then going to consider the size of the target. Realistically, there will be some constraints around the funding they have available, or the finance that they can raise to fund the purchase. So therefore, they don't want to be talking to a five million pounds MSP, if they can only afford a 500,000 pound MSP. And therein lies the first activity, is to effectively profile the businesses within those constraints. And, that's good old fashioned desk research, as there are very few data sources that are complete and sufficiently targeted to start from. Paul Green: So, I guess from what you said there, then it's a case of looking to see who's out there, and then approaching them. And, I guess you're trying to find people who are at the right point at which they want to get out. Maybe the business isn't doing so well, or maybe they're ill, or there's a divorce coming up, or something like that. Do you tend to see it's those kinds of triggers that make people sell the business, or is it typically a planned event? Daniel Welling: I would say in the larger end of the market, it's very much a planned event in the most part. So, they have probably more than one shareholder that effectively their balancing the needs and desires of all the shareholders in terms of the number they want to exit with, and the point in time that they want to exit. Very often driven by other lifestyle factors, such as retirement or wanting to live abroad, for example. At the smaller end of the market, it is going to be probably less planned, more emotional, more volatile. So, you probably won't have a, "Yes, we can exit definitely in month six of year five". It could be any point or never in reality. But yeah, the lifestyle event will dictate the exit at the smaller end. Paul Green: So, what are some of the most common mistakes you see MSPs making when they do look to acquire a business? Daniel Welling: Probably just misunderstanding the sales process. And as I alluded to earlier, that this is effectively lead generation. So, you don't know when a target client, end-user client is necessarily going to look to change their MSP. It could be triggered by the incumbent dropping the ball, in the way as an M&A opportunity might be triggered by a divorce or a life-changing illness, for example. Daniel Welling: So effectively, the first mistake is not being in it for the long-term or the long game, I should say. Having profiled who you might want to buy, you then have to begin to approach those targets. Ideally engage in discussion with them, perhaps even not immediately around the topic of M&A. Similar to the opinions on LinkedIn connections, that you shouldn't LinkedIn to someone, and then immediately start selling to them. The same is true here. They need to be aware of your interest at the time that it's right for them to consider an exit. This is not a, I think I'm going to go out and buy a business. This is a, how are we going to over the next one, two, three, four, five years, build ourselves a pipeline of M&A opportunities, and ensure that we're sat in front of them when they're ready to sell. Paul Green: I love this, because it's a marketing approach. It's a marketing approach to mergers and acquisitions, because you're essentially looking to build a database of people that could sell at some point, build a relationship with them, and then be there at the exact moment that they're ready to sell. And, that's the exact three-step system that I recommend to MSPs for their marketing. Build a database of prospects, build a relationship with them, and be there at exactly the right moment that they're ready to buy. Daniel Welling: You're quite right. And, therefore it's got to be a consistent process. And, you could probably then look to either hints and tips around how you would normally advise your listeners on client acquisition. So, it's being consistent, it's educating, building the relationship and making sure that you do keep the process going. If you consider the ways in which you approach end-users, if you can mirror that as close as you can to the M&A process, you'll probably not go far wrong. So, a blend of education and relationship building. Paul Green: And, I guess we've got to remember that in the same way that people buy from people, not businesses, at the kind of level that we're talking about here, people sell to people. In fact, I remember when I sold my niche healthcare marketing business back in 2016. We had three offers, and the offer that I picked wasn't actually the financially best offer. It wasn't the one that put the most money in my pocket. It was actually based on the relationship I'd built up with the guy who wanted to buy my business. And, the overall package was better. The money was a little bit down. It turned out I was wrong, but I believed he would be a good custodian of my business, and he would keep it going, and look after my team, and look after the clients and all of that kind of stuff. So yeah, this makes absolutely perfect sense Daniel. Tell us where we can find out more about you, and get in touch with you. Daniel Welling: So, my website is wellingmsp.com. As you'd imagine plenty of calls to action on the site. And you'll often find me, especially once we're allowed to, at the bar at MSP events, and always happy a for a beer, or a coffee if it's the morning with anyone that would like to talk. . Voiceover: Paul Green's MSP Marketing Podcast. This week's recommended book. Chris Timm : Hello, my name is Chris Timm from Sondela Consulting. I'd actually like to recommend two books if I can please Paul. The first one is The Ride of a Lifetime by Bob Iger. He's the CEO of Disney Corporation. And, the book goes through kind of how he started right at the bottom, and worked his way all the way up to being the CEO of the most successful entertainment company. During his tenure companies like Lucas films, Pixar, Marvel, those kinds of things were acquired during his tenure. Its a really, really good book. And, the other one I'd like to recommend is Never Split the Difference by Chris Voss, one of my favourite books of the year. All about negotiating as if your life depended on it. So, two really good books. Hope that helps. Thanks. Voiceover: How to contribute to the show. Paul Green: Every week I get a couple of emails from people who've been listening to the podcast, and often they're people I've never heard from before. So, if you've been a long time listener, or this is your first episode, and you want to just have a quick chat with me, literally just a hello, I thank you for the podcast on email, or ask me a question about growing your MSP. I'll be delighted to talk to you. You can get hold of me at this email address, hello@paulgreensmspmarketing.com. Voiceover: Coming up next week. Steve Taylor: As crazy as that trend sounds, there's a lot of MSPs don't know how to market. Paul Green: That's Steve Taylor from RocketMSP, and he's joining me on the show next week to talk about some of the MSP marketing trends that he's seeing out in the marketplace right now. We're also going to be talking about how to tackle the unique problem of your technicians asking you stupid questions. They may be very competent at what they do, but perhaps don't have the confidence or the ability to just crack on with it themselves, how do you train them and help them understand that the answer is within them, without getting annoyed with them, and without wasting your time. Paul Green: I've got a very clever method for you, which I'll explain in next week's show. We're also going to get, not dark, but a little bit realistic by talking about how many weeks you have left on this planet. I'll give you a sneaky preview of that. It's a roundabout 4,000 weeks. And a couple of weeks ago, I bought a poster which now sits up in my office, which reminds me how few weeks I've got left of my life. Especially as I get to the end of another week, and I fill in another box, and I realise another valuable week has gone by. Its an utterly, utterly sobering way of living your life, and I'll tell you next week all about it, and how you can get a poster just like that as well. See you in next week's show. Voiceover: Made in the UK for MSPs around the world, Paul Green's MSP Marketing Podcast.  
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