We can learn a lot from our bruthas and sistas in the fast-paced world of finance and borrow//beg/steal those best practices as we enjoy (yes - enjoy) the final days of 2024. ‘Tis the season to engage in year-end portfolio adjustments. The analogy is solid while the tactics may be different: This might include tax trades such as liquidating losses or locking in gains in equities v MSPs looking to fire annoying and unprofitable clients.
Firing Your Client Funny: Did you know that the first week after the holiday season (early January) is THE biggest divorce week of the year on the personal side after couples “stay together for the holidays for the children.” Happy client divorce often means a happy MSP life. LOL. Most of us get hired quickly by our small and medium business (SMB) clients but fire them too slowly.
Noted author and keynote speaker Dan Martell in this book “Buy Back Your Time” that basically espouses this mantra: “...why the fuck are you doing things that don’t make money.” This has been my north star in 4Q 2024 after seeing him at Chris Wiser’s mindfulness MSP three-day event in mid-October.
New Sectors
Join me in thinking anew on what you can successfully do. Now more than ever there are winners and losers in the economy. Also have been and always will be.
Let’s start with a look in the mirror about the relatively small Managed Services Provider (MSP) segment in the technology sector. Once a week I have confidential conversations with MSPs and thought leaders about the maturity of the MSP field. While Wall Street hits new highs, many MSPs are hurting for certain (call it a Goldi Locks economy). I’ll take some heat for this but core MSPs economic indicators for the small MSPs has stalled. Time to do a sector rotation for many of you. Simply stated. Look to move to or expand into economic sectors that are doing well.
Leading by example, I have come full circle in my life and am expanding back into oil where my career in Alaska began. That journey is profiled in my prior post HERE. (BTW – SMB Nation is still alive and kicking…don’t we all do a couple things these days?)
Sectors I’m watching are:
Energy. Here yesterday, here today and here tomorrow. Not to go down the political rabbit hole but with the new administration coming into power in January, the “drill baby drill” mantra will loom large in the public policy debate in 2025.
Defense. At the end of the day, the societal ethos in the United States is to generously fund defense. Again, set aside your political leanings one way or the other and but this sector receives the largest portion of the Federal budget when national debt service on the deficit and entitlements are removed from consideration. Note that MSPs can/should consider CMMC like San Antonio Texas MSP John Hill did years ago and is not only surviving but thriving. My advice? Make Hill a connection HERE. Go child! BTW- here is an AI-generated definition of CMMC (hey - if you are considering this area, at least educate yourself and know what it means:
CMMC stands for Cybersecurity Maturity Model Certification, a program created by the U.S. Department of Defense (DoD) to protect the Defense Industrial Base (DIB) from cyber attacks.
Building. While challenged with the general level of interest rates, the building sector has some bright spots such as the pent-up demand for housing.
Go Ahead and Troll and Challenge Me and Economic Assumptions
As you strategize your sector rotation motion, take a look at who has the hot hand. Insider the tech sector the conversation has to include AI, Cybersecurity (of course) and other specific nuggets.
Bottom Line: Greed is Good aka the hit 1987 movie “Wall Street.” Watch the Michael Douglas clip HERE.
I guess I started my business career 48-years ago (when I was 14yo) trading stock options on the CBOE after my morning paper route and before the school day started.
Day Job
Here’s where it gets juicy and can be part of your sector rotation strategy. My call with fellow MSP brethren finds that many are looking to get a day job. There are three dimensions here.
- Join your client. Years ago SMB Nation member Lars Andersson in New Canaan, CT pivoted from his MSP practice (called “Cloud9-IT” to join has largest client in the analytics space. Free weekend means one happy Lars.
- I just wanna be a W2 employee. For some of you, take a bow and exit stage right from your independent MSP practice and clock in. I’ve had the conversation several times recently. The challenge for most of us is the Indeed postings and LinkedIn job announcements clutter the job-seeking market place with very low conversions. Rather your next job is likely to be derived from “who you know.”
Job hunting funny fact. One east coast MSP player said it best. In yesteryear job seekers updated their LinkedIn profile by self-identifying as a “consultant” but today the phraseology is fractional as in “Im’ a fractional CMO.”
Happiness
Many of my recent conversations concern folks how just wanna be happy. Look no further than former SMB Nation employee Beatrice Philips (Mulzer) in Florida. After moving on from SMB Nation, Beatrice went on the open a hot yoga studio. Then she moved on to being a peer group coach. Never seen her happier!
Volunteering
One of the best ways to find the next great thing after life as an MSP is to volunteer for a cause that aligned with your beliefs. This can include working on a campaign, where you can meet rich donors (wink wink) or being a pooper scooper at the local zoo.
Timing - end of year is here and now. If you have curiosity on the topic above, be sure to use the fleeting days of 2024 to take stock and make good choices in 2025.
And Happy New Year!