From 10k to 63k MRR: Mitch Redekop’s MSP Success Story | Building A Profitable MSP with Chris Wiser

I want you to be mindful of watching this. What I get a lot of flack on is, oh, this only works in America. This doesn't work in Canada, it doesn't work in Australia. Everything we're going to talk about works everywhere. It's all about here and it's about execution. Hey there, my name is Chris Weiser. Welcome to the Building a profitable MSP podcast. Have a really cool show for you guys today because I am here live in Fort Lauderdale at the Hard Rock Hotel and Casino at, at our seven figure MSP live event. So pretty cool. We got hundreds of MSPs here, ton of vendors. Also some of my clients here, we got Mitch Redop here from River City, MSP with us. River City, awesome. Where are you guys from, Mitch?

We're from Sasun, Saskatchewan.

Canadian A.

Yes.

I love it. So I'm from, I'm from Wisconsin. You know that we give Canadians a lot of hard time.

Yeah, fair enough.

At least it's cold in Wisconsin. It's cold in Canada too, so got that in common. Okay, so tell us a little bit about your msp. How long you been in business? How big are you? Maybe how much MRR you have for you guys that are watching Brand new, that's monthly recurring revenue. Give us that, Rich.

Yeah. So we've been in business for about eight years. We started as an access development company and then we transitioned into the IT space. In about when Covid hit we actually.

Access Development, that was our main thing first.

Old school, right? It's very. Yeah. So our old owner, he used to be an Access MVP for Microsoft and that's how we all started. But we merged with a different company and then when Covid hit we actually broke off. So whenever that was, we kind of restarted the whole IT thing and, and kind of worked through that year, which was hard. It was tough year to restart a business for sure.

Covid was a tough time. Right.

Clients were not wanting to move with us because they were like, I don't know what's going on. So we, we spent the first year back to like our break fix kind of style. And then that kind of the turn of the next year is when I started understanding what an MSP was. I wanted to read more about it, learn more about it. And then we really took it to the next.

So much more of a consulting shop initially. And then you migrated into B2B IT services effectively.

Yeah, exactly. For sure. So that was a big part of it. And that's kind of when we. So really, I like to say we've been around for three years I guess.

Is okay since how much. So back then you were effectively zero.

Yeah.

All project revenue. Yeah, pretty much 100. Where do you. So we're, we're now what? It's October, end of October 2023.

Yeah.

Where do you sit recurring revenue wise?

So yeah as of this year we're at 63,000 mrr now.

63K mrr, that's Canadian obviously Canadian, which is pretty cool. Now one of the things that I want, I want you to be mindful of watching this. Everything that Mitch and I are going to talk about, what I get a lot of flack on is oh this only works in America. This doesn't work in Canada, doesn't work in Australia. This work. Everything we're going to talk about works everywhere. It's all about here and it's about execution. Right. So what kind of things would you say? First of all how big, how big is your market? Your Saskatoon you said?

Yeah.

How big is that city region?

I think we're just pushing 300000 people.

So not this big giant. No, not, not Vancouver or Toronto or. Yeah, these you know, big megaplexes. 300 000.

Yeah.

Basically range you got 60K plus MRR in Canadian money. Again what, what, how did you do this? Like let's talk about this. Obviously we're going to talk about seven figure MSP a little bit but you know what things in your head made this possible? How did you go from 0 person shop to 60k? And I know that's a bigger, it's a, that's a big question but a couple tips maybe for our viewers for sure.

I mean so other than first understanding what MSP was and I think that's the first step was, was understanding that the whole concept, you know I went through the, the tech drive and all those kind of things like just getting the general idea like what is this? And then wanting to really elevate that more, get off that good model. I knew that there must be something better and that's when you know, found your guys program. That was just about two years ago. So when I, when I first joined we did have a few of those. I was at 10k mrr. So now we're at 63. But a lot of that was just taking those mindsets of, of security first cyber security, the risk assessments. Understanding that client risk is, is so important and it's not just about you know, take my plan, whichever one you like. It's I should be the, the expert and the Consultant and something that I.

Think I noticed in you, you know, we've known each other a couple years now. You were very much I need to establish River City as the expert. And I saw you guys do that because I think and you just kind of highlighted that we had the good, better, best model in MSP or you know, your silver, gold, platinum, whatever, you know. But bottom line is whatever plan that the client thinks they should have. When you just said flip opposite. I'm the expert, we're the experts. Here's what you should have. Let's talk about that a little bit more. What's your thoughts on that?

Yeah, 100%. That's probably the. And it's still, you know, that's why we come back to these events too is try to get that mindset reaffir confirmed. It's the head trash. It's making sure that when I go into these meetings now and I'm talking to the client that they, they understand that I'm, I'm telling them what they need. Just like a doctor would give me the diagnosis. It's. I got to tell them this is what you need. And whether you take it from me or somebody else like this is, this is what you guys need to be able to manage your risks and then give them adoption. Right. This is, this is it.

So leading with cyber security I think is a really big key.

Yeah.

Now we're going to have and I get a lot, I get a lot of like kickback from people. We're going to have people in Canada say oh you can't lead with cyber security in Canada or we can't lead with the cyber security in a small market. What's your take on that?

It's, it's been unreal. I mean we have had hit or misses with you know, some clients aren't into it, but even you know, a two person financial firm in Prince Albert, Saskatchewan that's you know like 20,000 people, 30,000 people, very small, two personal financial firm. And they wanted the full package, like 500 a seat is what we sold them at. So they get, they get it, they got it. Was so excited. She's like, I've been waiting for someone to come by and like give us this kind of stuff. Cuz she's a financial firm, she has tons of clients. She's like I really need someone to secure my stuff. And that's, that's number one to her. And it's. When you get there's people like it's, it's a mixed bag right? There's either people that get it or don't get it. It's your job to try to educate them as best you can, but they still might not go for it.

But a really. I think a really important thing that I just heard is your job to educate them, not bend.

Yeah.

Not fold to what they want because you're desperate to get a deal 100%. It's, here's my offering. Here's what it is. I'm educating you as to the why. If I'm off base on this, feel free to chime in. But I'm educating you as to the why. And here's my. Either take it or you don't.

Yeah. And that's. That's a big part of it. And that's where we started. Right. Is you. When you don't have the MRI to begin with, you get a little bit greedy. You get a little bit like, I'll do whatever you want because I want this. But now we go in there with confidence, and it's like, this is it. This? Take it or leave it. Like, you guys need this. And we're confident in what we do. And I think that will translate in the meeting, and they'll see that.

So I think. You know what I just heard a little bit there was, we actually have a sales process now. We follow the sales process, and if anything deviates, we bring them back. And if they don't like it, too bad.

Yeah.

Okay.

I really like that. I love that. Yeah.

So I want to pivot a little bit here. We got. We went from zero for project shop. Zero mrr.

Yeah.

To now 66,000.

You said 63.

63,000. Mrr. What have you changed? How have you changed as an owner? Because were you. You mentioned kind of earlier that you weren't. So you kind of didn't know what MSP was. What was your role initially? We've never talked about this, so I'm very curious.

Yeah. I mean, so for the eight years, and how I started was. Was doing it, school, and the guy that started the company was my teacher. He quit. Okay. To start the business. So when I joined, you know, I had a year of schooling, then all of a sudden it was like, learn access. And then it was.

You were basically a dev engineer kind of.

Yeah, I kind of went through, like, all that kind of stuff, and then we did a little bit of it. So my technical skills weren't always great, but I was the technical person when we're running the company, and it was just me. Like, he was kind of doing so.

Now you've migrated from. So you migrated from tech guy effectively to. Are you the. The main decision maker? Owner.

Yeah. Owner. Yeah. And that kind of thing. So I've passed that rule on to.

How much tech do you do now?

Nothing.

Do zero. This is for you guys that are like, oh, I have to be the tech. I have to be the engineer, or we'll never grow.

Yeah.

How do you deal with that? Like, how do you work with. I mean, I know we have to hire people. I know it's hard to hire people, but what's your approach? I really want to hear your take on that.

Yeah. And maybe it's a mixed opinion on that one, but for me, I think the best thing I ever did was hiring my business partner, Eric, and he takes over the CTO role. He also helped me buy a deal owner, get a little bit of the stake in it. You know, I'm still a majority owner. I make all decisions, you know, that kind of thing. But having him control all that kind of stuff. He takes over the tech side. He handles the techs. I do the sales and marketing. And just having that kind of thing, you know, it allows me to come here and not even open my laptop for the week, and I know everything's fine.

Well, you could focus on your business and running the business.

Yeah.

Because I, you know, we see a lot of stuff. And I know, you know, you've been around seven figure long enough that you've seen enough naysayers that are like, oh, I have to be the tech. I have to be in the trenches. I have to control all this. But I am very much of the belief that you have to run your business. You have to think about revenue, you have to think about cash flow. Do you feel that's been a proponent to you or. You know, I understand you kind of moved out of the tech and you do have somebody to handle it, but. Yeah, where's your head at with that?

Yeah, no, exactly. I think a lot of people maybe get lost in that, too, is when they're handling the tech, they don't understand there's so much more you could be doing. Like, you know, I'm still busy every single day, and I still feel like I need help. And imagine having tech.

But you're working on the business. Not.

Yeah, exactly.

Trenches, really?

Right. We're making plans. We're trying to get the pipeline moving. We're always making the sales calls and following up. You got to go visit your clients. You got to do, like, all these things.

You just like what you just said, there is such a big factor and for you guys again that are watching this, I want you to be very mindful of the fact that Mitch is talking about pipeline and cash flow and revenue things that business owners and again I'm not saying that you're not a business owner but you're focusing on things that are revenue generating activities versus constantly chasing and putting out fires.

Yeah.

So that's been a pretty big difference maker for you.

100%.

Yeah, it's huge. And do you feel, do you know what actually do you know what your per seat kind of average is now? Do you know what those numbers are at?

Yeah, per se average. I'm sure most of our sales are in the 220 to 250 range.

Okay, so you're doing 220 to 250 give or take per per endpoint.

Yeah, yeah.

At every client.

Yeah.

So do you feel that that kind of profitability numbers because you're definitely seeing some margins. We in seven figure MSP we actively talk about goaling towards an 80% gross profit margin.

Yeah.

So do you feel that's enabled you to hire staff and build your tech stack better or, or what's, what's your partner's approach on that whole thing too?

Yeah, no, for sure. It really does give us that, that kind of cushion. Our cash flow is amazing now. You know it's having, having those profit. Even the profit first thing I think you just talked about with Michael, it's like that's one of the big things that we follow as well, the profit first methodology. So it's definitely opens that up. It gives you a better sense of where your business is at, what kind of things you can invest in like more techs and better training and, and different tools of the stack.

Just instead of like running this like you're just constantly desperate for cash and constantly desperate for closes.

Yeah.

You can actually run it like a real business, 100%.

And like everything I've learned in the program even just from, from starting with the MSA and the statement of work and having things like pre authorized payments on the 1st like I know what's coming out on the 1st, what kind of cash I'm going to have for the rest of the month and yeah, that is just such a difference between chasing money. Right.

It's. I remember when I put in I transitioned kind of from. I don't say I was break fix msp but I was pretty similar to that doing managed services out of the BO. Now this goes back to 2004, 2005. But I remember when I transitioned the mindset of everyone sending me a check towards everyone being on autopay. Ach. Kind of. I just like that cash flow. Yeah. I mean, if you've ever had your bank account, like, bordering on, oh, I don't know if I can pay these numbers, you know, like. And most of you probably know, like, I think every business owner has known that, but, man, what a difference in feeling.

It's. It's 100%. Yeah. Way better.

So from your standpoint, when I kind of get towards wrapping up the episode here, from your standpoint, what kind of things should the average MSP be doing? A couple of things we covered anything we didn't cover that you think they should be doing to try and get themselves to that point.

Yeah. I mean, number one, try to let go of the tech. I think that's a huge part of it, especially if you're a business owner. And, you know, maybe I can't say that for everybody. Maybe they have more passion for the tech than I do, but I still.

Think in that case, somebody's got to be running the business, though.

Someone does, right?

Yeah. I don't know that you can juggle both.

Yeah. They got to make that decision for themselves, I suppose, what they want to do. But being able to let go of the tech, have someone else that you trust and take it over. I mean, you know, it's got to run without you. And I think that's kind of the key is do those little tests of, like, going away for three or four days and see how it handles.

Yeah.

And keep extending it better.

Maybe. And be willing to let go of some of that control.

Yeah.

Okay, so thing one is, try and get yourself out of the tech. What else you got?

Yeah. Focus on, I think, the cash flow. Like I said, cash flow is king. Right. It's the biggest part for me, making.

Sure this all the time. Cash flow. Cash flow is absolutely king. Right.

Yeah. Don't chase. Don't chase leads either. Don't. Don't sell yourself short. Don't give in to what they want. Don't bend over backwards. It's. You're the boss, right. Like, you are the expert. You tell them what they need.

Act like it.

Act like it. Yeah.

Act like the expert. Don't chase leads.

Yeah.

Like, I like that. Okay, and let's hit third one. What's your other thoughts here?

What have you got here? Cash flow. That kind of stuff.

Pull out of the tech. Cash flow is king. Don't chase leads.

Yeah.

What else you got?

Self belief. I mean, just coming from Saskatchewan itself and everyone's saying, you know, you can't sell that kind of stuff in the prairies or small towns or anything like that. You can. It's, it's honestly all about doing stuff like the risk assessment and showing them this stuff. Right. Don't, don't say it can't be done. It can be done.

Yeah.

I love that.

I love that, too. So.

Yeah.

Okay. Well, I, I just want to tell you, me, you, I've never actually told you this. I really appreciate you being a seven figure client. It's awesome to watch your growth and watch your evolution. We don't get to see you. We see each other quarterly. Yeah. If you can make it.

If I can make it.

Yeah. It's really fun. So again, Mitch Reddicop, River City. What's your exact company name?

River City Tech.

I massacred it and I come to River City msp. But that's all right.

It's all good.

So. Okay, awesome. Great to have Mitch on with us today. Again, my name is Chris Weiser. Thanks for joining us on the Building a Profitable MSP podcast. We'll see you guys on the next episode.