Transitioning from break-fix to managed IT services

There's guys out there that are charging 2, 3, 4, 5 times what their existing MSP was charging and they're still stealing the deal from. Am I right on that?

No, that's right. Most of our upgrades have been probably 400% in what we were charging before.

Yeah, that's great. What's up, everybody? Welcome to another episode of your favorite, actually your favorite podcast, building a profitable msp. I am your host, Chris Weiser, here with one of my clients today, Michael Roy Ball. We just were talking about how to pronounce his name. I was like, how do you do that? He's like, I screwed up sometimes too. Good to see you, Michael. How you doing, buddy?

I'm doing good, thanks, Chris.

We got a beautiful winter day here in Austin, Texas. You are in Colorado. What do you got today? Talk to me.

It's about 29 degrees today. It's a little frigid, but no snow, so that's good.

Oh, that's funny. That's funny. Yeah, it's 76 degrees here. So I'm literally like this work outfit, full T shirt, shorts, the full deal. So. Okay, so we got, I think, a really cool episode for you guys today. We've been doing a good amount of, of our clients kind of talking about their success stories. And Michael's a pretty unique one because he was. And I'm going to let you tell a good chunk of your story here, but I'm going to kind of lay the baseline. Michael was a break fix MSP and you were 100 break fix, correct?

That's correct. We had one, we had one client that we were a subcontractor for. It was more like a, like a side gig job almost because they were not, we were not providing MSP services, but I was the full time on call for them. But on the side, we were building up the break fix side of our business for quite a while.

Okay, so, and that's, you know, so up until three years ago, I think you said you were 100% break fixed.

Correct.

Okay. And now you've positioned yourself, obviously named it Colorado. But talk about where you've positioned yourself and what your business looks like three years later. Coming from zero managed services, 100 break fix. And then some of the, maybe some of the challenges, you actually just kind of talk where you are now. And then I want to get into a couple of questions because you got some great challenges that I want guys to learn from.

So where we're at today, we are probably 95% managed services with cyber security. Our break Fix our computer store. It's probably, you know, 1 to 5% of our revenue and honestly we don't even really advertise it anymore. We're just, we get walk in traffic through Google and if it comes, it comes. If it doesn't, it doesn't. I really don't put a whole lot of stress into that part of our business any longer.

So you went from, in three years you went from. I didn't even know this going into this call. This is awesome. You went from 100% break fix to almost 100% fully managed plus cyber security.

Yes. So just one caveat I want to throw into there is at the time when I joined this program, I was doing some subcontract work for a client down in Denver. They were a 10 year old client. I had started with them hourly break fix and really it kind of turned into a full time job. Yeah. So we were losing that client when I came across your program in 2021. So $50,000 a year client and I knew that we had to do something at that time if we wanted to stay afloat because that was a lot of money. They were half of our revenue.

Yeah. So did you end up keeping them or are they gone or what ended up happening with them?

They are gone. We lost them out to a national IT provider because they were purchased.

Okay. So so obviously your expediency or choice, you know, decision making process with working with us has worked. I didn't really know your numbers till today. Do you mind saying where you're at MRR wise? If you don't want to. That's okay, I understand.

So right now we're at about 22,500 mrr.

So in three years went from 100% break fix to 22 500. That's pretty solid. How big is your market? What city are you in? I know it, Colorado is a big, you know, it kind of makes it sound like it's the whole state, but where are you guys at?

We focus our services to northern Colorado. I live in a town called Loveland and we are about 80,000 people here.

I'm going to look where Loveland is here on my phone and I know we were talking a little bit in the green room about some expansion ideas that just I had. You have a couple cities around you. What's that look like?

So we got the city of Fort Collins. I believe they have a population of about 150,000.

Yep, I've seen that.

Greeley, which is over off to the east of us and they're probably another 200,000.

Okay. Yeah. And I'm looking right here on my phone. You guys can see here's Denver and then we got Fort Collins and Greeley right there, right around. So that's a pretty good little metro market. You're gonna be able to build half a million people roughly, probably in a two hour, two hour area. I think you got a lot of really cool stuff coming, man, because. So let's talk a little bit about what your business is like now. Maybe what your personal life, managing your business is like now. Going from 100% break fix, having to kill your dinner every single day. Because I remember those tough. I had a retail store when I first started. That's a tough world to live in to what it's like now having managed contracts and recurring revenue that's under contract. Talk about what the mindset changes or maybe your mental makeup.

So I mean it's definitely a lot less stressful. It's nice to know, it's nice to know what our minimum numbers are every single month. You know, I don't have to worry about budgeting so much. You know, what we're going to be able to take home versus what we got to use to, to pay our subcontractors or to pay our bills. A lot less stress. It's still a little hard because I am still considered a one man shop. So I'm still putting a lot of time in. But I know that at any moment that I can, I can sometimes I can, you know, hand that off to somebody else.

Yeah, yeah. So thinking about all this, and this is a great story and for you guys listening, I know we don't have a huge monster MSP on the line, but that's okay. Like Michael, I'm super proud of you. To go from zero to where you're at now as a still single person shop, you realize what, what those kind of numbers are for somebody with a job like, you know, you're making 10, $15,000 a month that you can take home. That's pretty damn solid, dude. Like, I mean everyone is going to be happy with that in their life. What's your thoughts on scale or growth and where, where is your head at there? I know we were talking in green room about the Greeley and Fort Collins stuff. What's your thoughts on that?

So I mean we probably need two more solid contracts to where I can hire our, our first full time tech. So I mean I can see it right? It's the horizon is right there and I Can see it happening probably within the next quarter. And I think once that happens, that is really going to free my time up to continue doing sales and marketing to a point where I can get out of that as well and I can start watching.

Yeah, I like that. One of the things that I gave Michael in the. In the green room was I think you should establish an office like right now, beginning January 2024. We're on December 12, 2023, guys right now. So you know where we're at. So I think what you should do. And this is just Chris, entrepreneur, brain. Find a co working space in Greeley. It's gonna be like a hundred bucks a month to establish an office there. And you just. They have an address, they have location. Do the same thing in Fort Collins and start laying the groundwork for SEO and get it out there and get it going. Because then when you're ready, you could start to mark it down. Do you have any niches that you focus on that you'd like to work with?

We have really been working with bookkeepers and CPAs, mostly bookkeepers. They seem to be the ones that are a little more afraid of what could happen to them with the FTC safeguards.

Yeah, yeah.

A lot of them feel like they're already being protected, but it all comes down to education. So we're educating them together because they work closely together, I think.

Man. So look how this is already kind of coming together. You build a little, you know, build a couple of offices. Sorry for. You can hear my dogs on the street apparently. But you could build a couple of co working spaces, just have a mailing address and be able to establish an office because Google now makes you actually have a physical office there in order to be in Google, my business. So that's kind of why you do that. Then you start to advertise, build a list of CPAs. Only bookkeepers, only in the Greeley Market, in the Fort Collins Market. And you start to push out that stuff to those people that same. And pretty soon you're going to. And you know what's cool about our process, Michael? You have a built in, fully remotable sales process that you can run soup to nuts. Right? What's your. What's your thoughts on that whole thing? I'm going to hold you to this whole thing because I just built. We just built this on the.

I mean, I think it's a good idea and honestly, I hadn't thought about it. I thought that I was close enough to Fort Collins and Greeley That Loveland could still be our headquarters. But I think it makes some sense to put a presence in those towns. You know, I have, I've never looked at the pricing, so I really don't know what we're looking at.

It's not expensive, man. Like literally I have multiple physical offices that are just like that. Basically co working spaces that you can just do it. So that's really cool. I would try it. Worst thing that happens is you have headquarters and I would keep Loveland as HQ and just have sales office here. Sales office here. That's fine. Companies do that all the time. What it used to be was a rep's house. Now you kind of can't do that anymore because you can't have a physical location, but you can easily do a co working space. I was, my headquarters was a WeWork for five years. All right, now we're in physical location. Okay, this is awesome. I love that. So cool stuff that we just built on the fly with Michael. I got a couple things that I want to get from you. So obviously you took it from the break fix $0. You had a computer store kind of thing place all the way to, you know, multiple clients, tons of recurring revenue. All this different stuff is a one person shop. What's a couple of tips you can give the msp, that's either the startup MSP or the smaller guy that's out there listening that says, oh, I can't do this. I'm a one person shop. And you get all this, you know, Cindy Phillips is our head sales trainer here and she calls it head trash. You get all this head trash around. I can't do this. I can't do this. I can't do. What's your thoughts? How did you do? How did you do it?

So my biggest, the biggest thing that kept me from growing at first was thinking that I could not increase our prices to our existing customers. You know, I've kind of called myself an MSP for five to six years. We had very few people on month to month contract. None of them were on an extended, you know, 12, 24, 36 month contract. So I basically told them, you know, we talked about cyber security, the things that are changing, what they're going to need to do to start protecting themselves and what it was going to cost. And I was afraid it took me five or six months to close our first. No. Or our first client because it took me that long to finally decide I need to talk to them about this and I need to be honest with them about it. So be honest, you know, charge what it's worth and don't be afraid to put people on contract.

Yeah. Do you think, and this is a little bit of a shameless plug here. Do you think that our process helped you to convey that or where's your head on that? We've not talked about this, so I'm curious, do you think you could have done this on your own or were we an accelerant or did that help?

I definitely 100 put all of our growth into this program because I was, I had no ideas. You know, like I said, lost. We were losing that one client who was half of our revenue. I was scared, you know, to lose $12,000 a month in revenue.

Yeah.

Wing that there was that I probably couldn't pay myself for a while.

Yeah.

I had to put whatever I could into. Into play.

Yeah. It gets real scary real fast. Right. And you know, I think one of the things that I'm, and I'm going to give you guys a second thing that I watched Michael do over the last couple three years here, you had discipline. There was a lot of I'm going to work on this on my own. How many clients do you have that you went through with our program like that you actually ran the play on?

So total. So we currently have 22 on full cyber security. I think we started with about probably nine.

Okay, so what Michael did then is he went back to his existing nine clients, ran the seven figure msp, what we call run the play. Correct me if I'm wrong in any of this. I'm kind of assuming a little bit of these things. But you went back, ran the play on these existing clients and at the same time it taught you how to you practice and you learned how to sell the right way to the new guys. And now cybersecurity is your differentiator going in. Am I off base on any of that?

Not at all. Yeah.

Okay. So that's our kind of, our standard thing that we do. Guys that are listening to this, that's awesome to hear, man. I'm so stoked about that. That's exactly what our goal is for the program. What other thing would you say? You know, we got the dis, we got the raise your prices and trust that you can do that to your clients, but you got to have a way to do it, which I think we give you that accelerated way, shameless plug again. Second thing is that discipline that you had to actually do that across because we definite have people in the program that are like, oh, I don't want to talk to my clients. I'm scared to have this conversation. I can't charge them or even in the program, there's people that are scared to do that because it seems like this giant monster that they don't want to deal with. How do we get past that? And then I got, I want one more tip from you. How do we get past that giant monster?

In your own head, I think you just have to do it. You know, you upgrade one client to the new stack to the new cyber security protocols and it's going to more than cover whatever you might lose.

Yeah.

To the other customers that just don't want to change. And there's, there's going to be people who don't want to change. Right. They just, they don't see the value sometimes in what we do until they get hacked. Right. But when you show them what their risk is, you know, their eyes open up. Yeah.

Well, we're changing, we're changing the discussion from it just being about tools and tech and installs and support to you're going to get hacked. What's your plan?

Right. Yes.

Yeah, I like that at all. I like that a lot. So what do you think? And I think, I think your mindset of you just got to do it is a really good one for you guys. That and Michael, I will tell you, there's people that I can sit there and tell, they just got to do it all day. It doesn't matter. Because the, the fear of change is great. Way more than the fear of what might be maybe. So they're just not going to change. So you got to really just push yourself and say, I gotta make a change. Because the thing, guys, this change is we're coming further down the cyber security road, further down that everyone's going to get hacked road, further down the. Your competitors are going to walk in the door and talk side. Michael's going to walk in the door of your client and talk about cyber security and you're going to get hung up to dry because he's going to kill you in terms of, you know, deliverable and charge two to three times more. Am I right on that?

No, that's right. You know, we've. Most of our upgrades have been probably 400% in what we were charging before.

Yeah, that's great. Have you gone into any existing clients or not? Any brand new clients for you that had existing it and you charge them more?

Most of the clients, no, I have not taken anybody away. Most of the ones that we've come across have been. They've been new to manage it.

Okay, okay, yeah. It's just an interesting question because we are definitely, and I know you're in our coaching a lot and you see there's guys out there that are charging 2, 3, 4, 5 times what their existing MSP was charging and they're still stealing the deal from them. So. Okay, so I want one more. We're coming down to the wire here on time. I want one more brilliant Michael Roybal idea that we can give our listeners and viewers that will help them make their MSP more profitable.

I think the biggest factor that we've had in the last six to nine months is putting our face out there on social media, LinkedIn, Facebook and just sharing what we know. We don't need to sell anybody, but if we share what we know about cybersecurity, people are going to ask themselves, do I need this and am I doing this? Yeah, yeah, they're not. You know, they're going to pick up the phone and say, let's have a quick chat.

Yeah, I think that's key. One of the things that we just did a road show in Los Angeles last week and one of the guys was there and he said, I am here at your event because you give away all this great free content and you for free content, is this good? I can't imagine what your paid content is. So for you, give them checklists, guides, self help stuff. Here's why you need to do, here's how you could do a cybersecurity, self assessment kind of stuff like that, give them all this. They're not going to do it, guys, they're not techs. They need your help and they don't have access to the tools you have access to. So give them everything. And Michael, me to you, whatever you think of in terms of I need these templates, bring it to me, bring it to Lindsay, bring it to our team. We'll create it for you. Like that's Lindsay's like a Canva master. So just create all the content you need and then you get out there and you educate like crazy. Man. I love that so much. That is such a good tip. How did you personally get over that? And I don't know if you had this, but a lot of people have this. I don't want to put myself out there. I'm uncomfortable. I got imposter syndrome. There's everybody better than me. I don't want to be on live videos, I don't want to be on webinars. How did you get past that. You just did it again, didn't you?

Yeah, I did it, but I had to do it. Right. I was in a. In a financial position that my life was about ready to change so drastically that it was going to hurt. Right. I'm in a position now where I can see that we're. We're getting debt free as a business and as an individual. Right. So that I can grow this business. Right. Fear was my number one holdback, and I know that. And you know, it takes a lot to get me to move. You know, my wife tells me that I don't. I don't start moving until I start feeling pain.

Yeah.

Now I'm trying to create that. Not the pain, but the pleasure. I need to understand that if I.

Keep doing this, I'm not going down this road with you, man.

If I keep doing this program the way it was designed, I'm just going to start growing exponentially at this point.

Yeah. Yeah. Okay. So. And I will tell you, there's not much more powerful than an entrepreneur that's got to feed his family. There's not much more powerful than that, I think. Okay, Michael, really great story. Any, Any parting words from you today because this has been awesome little chat.

I will say that whatever investment that you guys are going to put into your msp, this is one of the few that has paid off for me.

Well, thanks, man. I'm glad to hear that.

Would I invest into this program? Because I've already got it back tenfold.

That's amazing. That's. And you and I know each other in person. You know, we've not like, spent a massive amount of time together, but we've met and hung out. I think, you know, I really care and I really want you guys to grow. So that makes me. That's why I do this, is to make sure you guys obviously makes a good living for me. And some people are like, you're all about the money. Hey, money's great. I'm awesome with it, but I want to see my people succeed. It doesn't do me any good if people don't succeed, so.

And you're hands on. And we appreciate that. Thanks, buddy.

I appreciate that, man. Okay. Michael Roybal it, Colorado. Great job. Really proud of you. I'm gonna hold you accountable. And I'm going to say it is December 12, 2023. By March 12, 2024, I'm going to come back on another episode and talk about your two new sales offices in Greeley and Fort Collins, Colorado, and how much you're kicking ass. Okay. That I love it. All right, guys, great episode today with Mr. Michael Roy from IT Colorado. We'll see you guys next episode. If you're watching on YouTube, any of our visual channels, it's great to see you. If you're list out Spotify, Apple, podcasts, Siri, xm, etc, all that other stuff, great to listen to. You would love to have you watch because we're full video, full audio. Good to see you and we'll see you guys next time. Have a great day.