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MSP Business planning workshop
Gary Pica, President of TruMethods
Copyright 2011 TruMethods, LLC
On today’s Webinar
Presented By:
Gary Pica
President, TruMethods
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Copyright 2011 TruMethods, LLC
Your 2014 Business Plan
• Session 1: Business plan workshop
• Session 2: The commoditization life raft
• Session 3: Keys to selling recurring revenue
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Copyright 2011 TruMethods, LLC
World Class MSP?
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Copyright 2013 TruMethods, LLC
Average MSP
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Inconsistent MRR growth
AISP under $100
Leverage of $100,000 / employee
Under 10% net profit margins
Create very few jobs
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Best-in-class MSP
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Add some new MRR most months
AISP $100 - $110 range
Leverage of $125,000 per employee
14% - 16% net profit margins
Create a few jobs
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© TruMethods, LLC. 2013 - All rights reserved
World Class MSP
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New MRR at the right price EVERY month
AISP $120 - $160 range
Leverage of $150,000 or higher
25% - 35% net profit margins
Create opportunity for all employees
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© TruMethods, LLC. 2013 - All rights reserved
5 Qualities of a World Class MSP
#1
Business
Planning
#2
Packaging
and Pricing
#4
Be process
driven
#3
Sales
Focus
#5
Command
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© TruMethods, LLC. 2013 - All rights reserved
Your 2014 Business Plan
• Having a business plan does not ensure
that you grow faster or make more money
• Most companies that achieve growth and
profitability have an actionable business
plan
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The Business Planning Process
Audience poll:
Do you have a current Business Plan?
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The Business Planning Process
Vision
Target
Plan
Action
• 10 Years
• 3 Years
• 1 Year
• 1 Quarter
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Your 2014 Business Plan
Top Excuses
• I am already working as hard as I can!
• I am buried with reactive work
• I don’t have the time or resources to take
action on my plan
• I need to finish a few things first
• My company is small and doesn't need a
written plan
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Your 2014 Business Plan
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Review 2013 results.
10 year vision for your life.
Do some soul searching.
Why did you get into business?
Have your expectations changed?
Put a price tag on your life's vision.
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A.T.D.I.Y.P.B.A.
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Liquid Net Worth
$1,500,000
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Liquid Net Worth Goal
Exclude the value of your business and home
Consider life events
Determine annual post tax dollars required
(10 year time horizon)
___________
$150,000
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Annual Income Goal
$150,000
• Annual income goal
• How much additional annual income do you
need to generate $150,000?
• Divide $150,000 by 0.65 (35% effective tax rate)
__________
$230,000
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MRR Goal
$230,000
• Annual revenue required: $230,000 divided by
18% net profit is $1,275,000
• Recurring revenue goal: $1,275,000 X 70% is
$892,500
• Divide $892,000 by 12 for MRR Goal
_________
$75,000
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MRR Goal
$75,000
• Set a time frame to reach your MRR goal:
3 Years
• Determine your 2014 MRR goal (Divide MRR
Goal by Time Frame)
• Add sales activities required to your plan
_________
$25,000
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Business goals
MRR Sales Goal Calculator
Input your goals:
Annual MRR goal
Average Contract Value (MRR)
Close ratio
$25,000
$2,000
20%
Monthly MRR goal
New Customers per Month
New customers needed Annually
$ 2,083
1.0
12.5
Building your playbook (summary)
MRR needed on Pipeline
# of Prospects on Pipeline
Appointments needed Annually
Appointments per month
Appointments needed per week
Contacts per week
Dials per week
$ 8,300
4.2
60
5
1.2
30
140
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Putting it in perspective
18% net profit
10 yr. liquid net worth goal:
$1,500,000
Additional post-tax income required:
$150,000 / yr.
Additional income required:
$230,000 / yr.
Additional revenue required:
$1,275,000
Recurring revenue required:
$892,500
New MRR goal:
$75,000
New MRR / yr. goal:
$25,000
New MRR / mo. goal:
$2,083
Appointments needed per week
1.2
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Two key factors
1. Operational Efficiency
– Net profit %
2. Sales Trajectory
– Net MRR gain
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Profit and Leverage
• Profit is determined by leverage
– Leverage = Amount of service revenue / employee
You need higher profitability;
you DRIVE leverage
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Measuring Leverage
Number of Employee’s:
Annual Service $:
Leverage:
Average MSP
TruMethods Target
6
6
$600,000
$900,000
$100,000/EE
$150,000/EE
Unrealized Profitability: $300,000
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Unrealized Profitability
What is your unrealized profitability?
Number of employees * $150,000
minus
Annual Service Revenue
=
Unrealized Profitability
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Annual Service Revenue with 12 employees:
Average MSP
Best-in-class
World Class
$1,200,000
$1,500,000
$1,800,000
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Impact of Efficiency
18% net
30% net
$1,500,000
$1,500,000
Additional post tax income required:
$150,000 / yr.
$150,000 / yr.
Additional income required:
$230,000 / yr.
$230,000 / yr.
Additional revenue required:
$1,275,000
$767,000
Recurring revenue required:
$892,500
$537,000
New MRR goal:
$75,000
$45,000
New MRR / yr. goal:
$25,000
$14,000
New MRR / mo. goal:
$2,083
$1,250
1.2
0.7
10 yr. liquid net worth goal:
Appointments needed per week
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Impact of Efficiency and Trajectory
18% net
30% net
$1,500,000
$2,486,250
Additional post tax income required:
$150,000 / yr.
$248,625 / yr.
Additional income required:
$230,000 / yr.
$382,500 / yr.
Additional revenue required:
$1,275,000
$1,275,000
Recurring revenue required:
$892,500
$892,500
New MRR goal:
$75,000
$75,000
New MRR / yr. goal:
$25,000
$25,000
New MRR / mo. goal:
$2,083
$2,083
1.2
1.2
10 yr. liquid net worth goal:
Appointments needed per week
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Copyright 2012 TruMethods, LLC
Operational Efficiency
How to increase leverage
1
Roles &
Responsibilities
2
Delivery
Process
3
Revenue
Base
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Sales Trajectory
How to increase MRR
1
Sales Plan
2
Sales
Process
3
Accountability
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Your 2014 Business Plan
How will you and your team be held
accountable?
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Discipline: Quarterly action plan is the key
Metrics (SMART Numbers)
Rhythm
Culture
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Summary
• Vision-Target-Plan-Action
• Set 2014 goals for MRR and
activities
• Calculate your unrealized
profitability
• Focus on trajectory and
efficiency
• Put accountability in place
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Free Webinar
Get the TruMethods webinar:
“Increasing recurring revenue Sales”
Hand me your business card
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The FormulaWon Program
Why TruMethods?
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Proven business transformation process
Generate more leads
Consistently build recurring revenue
Dramatically increase profit margins
Ready to achieve financial independence!
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Copyright 2013 TruMethods, LLC All rights reserved.
The FormulaWon Program
Fueling MSP Growth
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8 week onboarding process
Live “New Comers webinar”
Detailed training process
4 scheduled one-on-one review calls
Weekly homework
8 hours of videos
Support resources:
• Packaging and pricing checklist
• Sales goal calculator
• Sales playbooks
• Step by step sales tactics
• Lead generation plan
• Business plan template
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Aligned packaging and pricing
with World Class standards
Detailed sales plan
Lead generation plan
Completed business plan
Quarterly action plan
TruMethods SMART numbers
review process (QBR)
A plan to increase service
delivery efficiency
Higher expectation about what’s
possible
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The FormulaWon Program
Fueling MSP Growth
• 2 live webinars each month
• Over 90 hours of additional
sales process and business
improvement content
• “Ask TruMethods” Q&A
• Quarterly Business Reviews
• Accountability tools
• Member to member Forums
• Weekly motivational audio
messages
• Annual member conference
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Business planning discipline
Sales process
Service delivery efficiency
Tracking of SMART numbers
Support
Motivation
Accountability
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Copyright 2013 TruMethods, LLC
The FormulaWon Program
Fueling MSP Growth
Starter Kit is $2,295 NO CHARGE Growth Tracks is $399/month $349/month
Special Offer: Expires 2/24/14
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TruMethods Promotion
Write “promo” on the back of your card
SPECIAL OFFER:
Expires 3/12/14
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