We recently heard a fantastic episode of the podcast, Confessions of an IT Business Owner, hosted by Ryan Goodman. This episode was all about the benefits of joining a peer group and featured an interview with Dennis O’Connell, the VP of Taylor Business Group. All we can say is, wow! It was awesome to hear about the growth that an MSP business can experience by being part of a peer group, and we wanted to share some of the takeaways with our own Atera family.
How to Choose the Right Peer Group
The right MSP peer group should be made up of a small group of business owners, preferably those who are not in direct competition with one another. For example, going into a peer group with the IT guy who lives and works in the same location might not be the best idea. However, you also want to make sure that your peer group has people who work in a similar area to you, and isn’t simply a generic business-owner group. Think about the realities of joining a group as an IT business owner, and the other participants are bankers, dentists, and landscape artists. You may be able to discuss certain issues that go across industries, such as the practicalities of owning a business. However, once you start talking about remote access requirements with a dentist, or data compliance, he’s going to feel the same way you would if you were asked your opinion on root canal treatment!
You may also want to set benchmark financial metrics that your peer group should keep to so that you’re all in a similar place in your growth. If it works for your group, you could have standard benchmarks that all participants should meet, and then what O’Connell calls “profit masters”, a high-earning sub-group that members can aspire towards.
What are the Benefits of a Peer Group?
Who hasn’t been to an amazing conference or talk, where you chat to other MSPs and have fantastic conversations. But, then what? Often, it doesn’t get to the right level of depth, or you go your separate ways and that’s the end of the connection. A peer group allows you to take it further, to create real relationships with the people that you see on-stage at conferences and trade shows, and learn from their success.
Whatever you’re struggling with, it’s guaranteed that a member of your peer group will have some insight on how to get around your challenge. Better still? You’ll have some insight on whatever their latest problem might be. One MSP is struggling to hire effectively, while another has a management challenge or a problem with a particular long-standing client or vendor. Everyone has their own ceilings that they are grappling with, but as the expression goes – a rising tide will lift all ships. The ethos of a strong peer group should be, we’re all going to help one another, and in that way, we’re all going to get better.
The Importance of Honesty in a Peer Group
We loved hearing O’Connell talk about the most common challenges he has when talking to people about peer groups. He most often hears, “I don’t think my business is ready for a peer group.” He believes that this is the completely wrong perspective, and his advice is, “Come as you are, and your peer group will help you to grow.“ The same is true for people who say they don’t have time for a peer group. The truth is, you don’t have time not to join a peer group, because it’s a real investment in your business.
Of course, you need to be ready to hear the uncomfortable questions from people who have been there before or can see your business clearly from the outside. Sharing your financials, and being asked questions such as “are you paying yourself consistently?” or “why are you sticking with that client?” These can be hard conversations to have, but without the dancing around, and by truly wearing your heart on your sleeve in a group of people who are all doing the same, that’s where the group dynamics change and you start to see growth.
The Advice of a Peer Group
By being honest with other MSPs about the important stuff, and not skirting around the edges, you can grab some fantastic takeaways that make a measurable difference, and are already tried and tested on other more experienced MSP businesses. One example O’Connell gave that we see a lot with customers when they move over to Atera is the struggle of the first year of business. In the first year, you’re getting to grips with costs, you’re realizing that you’re losing money on products and that you need to be focusing on services, and you’re learning how to drive your numbers internally with operational efficiency. It’s only once you get to year 2, that you can start thinking about getting better clients, growing, making smart decisions about your business. This mentality was exactly why we built the Atera pricing structure the way that we did, without making MSPs commit to a full year of service when they are at their most vulnerable, and charging you per technician so that you’re not ‘punished’ for your own success.
O’Connell ended the interview with some fantastic advice, on running your business as if you’re going to sell it tomorrow. Even if you’re planning on staying in the industry until you retire, which may be decades away from today, you never know what will happen tomorrow. Ill health, a new opportunity, a change in the market… anything. Aside from that, running a business like you’re getting ready to sell it has its own benefits, it means that you always have your ducks in a row. It stops you from becoming the sales engine for your business or being too linked to its success, and it helps you keep your financials in order – as if you were ready to show this to an investor or a buyer at the drop of a hat. Simply put, O’Connell believes you’ll make smarter business choices living by this motto.
Here at Atera, we’re no stranger to the benefits of peer working. We know that collaboration is King, which is exactly why we’re always looking for ways to share, communicate, and grow with one another, from our Shared Script Library to our thriving Facebook group.
Do you use a peer group to improve your business, help others with their pain points, or share experiences? Give us your input!