MSP - What to do when you are busy but cant hire?

[Edge Tech NY]

Hey Guys,

Yea I didnt explain right lol sorry

Everything is MSP and I only have all you can eat clients. Only projects and disasters are billable hourly.

I barely work throughout the week. I am deff not too busy and my question on the first post was a "future" question. I have a lot more room to grow as a 1 man band. I was just worried about servers pretty much. I resolve any type of workstation ticket within 10 mins 99% of the time so im not worried about being backed up that way. I just worry about 2 severs going down. Luckily I charge for disasters and all day projects so I can contract someone and not pay out of pocket.

What also helps my stress is having hosted exchange. Takes away the big emergency call "EMAIL IS DOWN" and hell breaks loose.

I need to start handing out business cards again and stop sitting back and collecting checks. I have to admit I been lazy the past few months after I got 3 new referrals and upped my monthly income a few G's (2 small business 5-8 pcs 1 server and 1 lawfirm 20+ pcs 1 server) earlier in the year.

Does Adwords help out for you guys?

 

[frederick]

Honestly, hired a junior tech. Lvl 1 if you will. We gave him the small stuff only, which allowed me and my partner to be more free. If you can take a hit on what you bring in to expand your reach, then worth the investment.

Another option is to contract with someone.

 

[pceinc]

Hey Guys,

I am slowly approaching the time where I'm getting worried about 2 servers going down at once and me being a 1 man band..

I don't make enough to hire yet (less then 7K/month) but I do manage about 140 PC's and 14 servers. (some clients were my first ones and I had to cut prices to get them years ago)

When some of you more successful guys were in my position, what did you do? I don't make enough to hire but I don't wanna lose a client either when I do get busier..

I feel your pain. Makes it difficult to go on vacation too doesn't it? Find someone in your area that is like you and use each other for backup or hire someone. I didn't actually go MSP until I had employees so it was a little easier for my company.

 

[nlinecomputers]

"(some clients were my first ones and I had to cut prices to get them years ago)"

And you haven't renegotiated your rates? If you are too busy but not earning enough money to hire help then you aren't charging enough. Time to consider changing all of your rates.

 

[nesrinamb]

well think about your work load, lots of it is probably really simple stuff. I would hire a level one guy. But contracting at least for now seems like a good idea.

I would also take a look at your clients and the amount of money they bring in and time you spend with them. If one client is taking up 10% of your time and brings in 2% in revenue theirs something wrong their. I would also consider cutting some you don't like that much. You might take a hit in cash say from 7 to 5. but if suddenly you have 50% less work you work less for more money. I bring this up because you said you had to cut prices for some a few years ago.

But for your whole server issue it's contract someone or hire.

 

[seedubya]

Do as nesinramb says AND as nline says - review your pricing and your customers. Definitely consider a price increase - handled right that could give you a lot of the cash needed to go ahead and hire. Once you hire, train the guy the way you want him and then let him do his job. Use the free time to find more customers. Rinse and repeat.

 

[carrcomp]

Agreed, you need to figure out why your price is so low you're not making enough profit.

 

[trevm999]

And click some links in the signature above this post

 

[Edge Tech NY]

I'm worried a price increase may cause issues if they disagree for whatever reason (cheap) and now I may lose them because of it... Should I not be worried about that?

Keep in mind im not busy at all right now, my thread was a rhetorical question. I work maybe 10 hrs a week tops at the moment because everything has been smooth the past few months luckily.. so i may not be undercharging being i work so little.

 

[nlinecomputers]

I'm worried a price increase may cause issues if they disagree for whatever reason (cheap) and now I may lose them because of it... Should I not be worried about that?

And you are sure to keep them as a customer if you get caught having two disasters at the same time? Unless you totally suck as a tech then you must have demonstrated your value to them. Now it is time to demand what you are worth. You will make lots more money raising your prices and frankly it sounds like you need to get rid of a few clients. If one or two drop you and you keep the rest then you'll still be making more money and not be as overworked. That will let you spend time on hiring and training a tech which will free more of your time so that you can land even more clients at your new rates. Cheap clients are bad clients. And you are seeing why. You are doing too much work for too little funds.

 

[carrcomp]

Let's be honest here ....

As you gain experience and get to the point you're at now (too busy to take on more clients) this is the perfect time to increase prices.

Then what you'll see is this :

Customer's who see your worth will pay the new rate.

Customer's who won't pay the increase are generally the same ones that don't value your time as it is. You've probably already had to give up free services because "This should have been covered"

As long as you don't have a larger base of those customers than you do the "good" customers, what you'll see is the couple of people you lose won't lose more money than you gain with the higher price.

Get a tech, get more customers ... make more money.

Have fun!

 

[Kaizen]

I agree with the concept of raising prices to weed out the least valuable customers. But making 84,000(after expenses?) for 10 hours a week seems pretty good. That to me implies his prices are not low. Multiply that by three and one person is doing over 250,000 of income(expenses?). I come from a break fix background and those numbers are great. I suspect MSP done properly gets a better return, but still I can't imagine a single person billing out over 300,000 in a year without help.

 

[carrcomp]

$46 an hour in most places is low, which is what he's making at 8k/month working 10 hours/week (8000*12/52/40 is 46.15 .. round it up)

So no, I disagree.

 

[Kaizen]

$46 an hour in most places is low, which is what he's making at 8k/month working 10 hours/week (8000*12/52/40 is 46.15 .. round it up)

So no, I disagree.

Your math has him working 40 hours/week, he said he is only working 10 hours/week. His hourly is $161.

What we bill out and what we clear hourly are two completely different numbers. Our shop has an hourly rate of $79, plus we do flat rate. If at the end of the year after paying expenses: employees, advertising, rent, and many others, if I am able to clear $100,000 taxable income, which is $50/hour(based on a 40 hour work week), I would consider that a great success (that goal is getting closer every day).

 

[nesrinamb]

Ok im confused now please clarify somethings

1. How many hours are you billing per week?
2. How much are you working that is non billable?

I was under the impression that you were working a lot and billing a decent amount.

But that a lot of your time was also things you can't bill for like accounting and advertising and such, basic administrative stuff.

Ok let me tell you that 80% of what you make is brought from 20% of your clients.

If you spend 10% of your time on one client that client should be 10% of your revenue or at least as close to it as possible.

I would really look at your clients and see which ones spend tons of your time and have very few billable hours. I do that for all my clients and I did find a few that spent about 3 hours of my time for an hour of billable and at least for me that's not okay.

Also remember to try and upsell things that they need.

Got rid of a bunch of clients a while back that I felt were not really bringing in what I was spending with them. Yea I took a 20% hit but I also had half the work I normally did, all the extra time went into finding better clients like the ones I have now. I still make more money and work less.

Lets say you work 40hrs per week and you end up only billing 10 because everything else is going to networking events and following up and accounting and other administrative stuff.

Take a look at your client base and chances are you will find 4 or 5 clients that use up a lot of your time and yet none of those 10 billable hours were sent to them. Get rid of those clients but do it nicely and you may find yourself working 30hrs per week and not find that you actually went down in cash.

Or if you did you maybe lose 2 billable hours but suddenly you are only working a total of 25hrs per week.

Personally I would rather work 25 hours per week and bill 8 hours then bill 10 hours and work 40.

20% of your clients use up 80% of your time and 80% of your revenue is from 20 percent of your clients the idea is that you want those two to match up nicely. If you're spending 80% of your time on clients that bring in only 20 percent of your revenue your leaving the good clients neglected. You want to spend as much time on those few clients that bring in the big bucks instead of those that just use up the time.

 

[Edge Tech NY]

Yea I didnt explain right lol sorry

Everything is MSP and I only have all you can eat clients. Only projects and disasters are billable hourly.

I barely work throughout the week. I am deff not too busy and my question on the first post was a "future" question. I have a lot more room to grow as a 1 man band. I was just worried about servers pretty much. I resolve any type of workstation ticket within 10 mins 99% of the time so im not worried about being backed up that way. I just worry about 2 severs going down. Luckily I charge for disasters and all day projects so I can contract someone and not pay out of pocket.

What also helps my stress is having hosted exchange. Takes away the big emergency call "EMAIL IS DOWN" and hell breaks loose.

I need to start handing out business cards again and stop sitting back and collecting checks. I have to admit I been lazy the past few months after I got 3 new referrals and upped my monthly income a few G's (2 small business 5-8 pcs 1 server and 1 lawfirm 20+ pcs 1 server) earlier in the year.

Does Adwords help out for you guys?