Building A Business That Is Not Dependent On You

Welcome to the Rialto Marketing podcast. Today's episode is a revenue acceleration series interview where we talk to seven figure B2B professional service firm owners that are actively trying to grow their business and get to the next level. We talk about the good, the bad and the ugly so that you can learn from their experience.

Join Tim Fitzpatrick and Paul Berndt for this week’s episode of The Rialto Marketing Podcast!

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Building A Business That Is Not Dependent On You

Tim Fitzpatrick
Welcome to the Rialto Marketing podcast. Today's episode is a Revenue Accélération Series interview where we talk to seven-figure B2B professional service firm owners that are actively trying to grow their business and get to the next level. We talk about the good, the bad, and the ugly so that you can learn from their experience. Hi, I am Tim Fitzpatrick with Rialto Marketing, where we believe you must remove your revenue roadblocks if you want to accelerate growth, and marketing shouldn't be difficult. Thank you so much for taking the time to tune in. I am super excited to have Paul Barant from NetVPro with me today. Paul, welcome, and thanks for being here.

Paul Berndt
Thank you, Tim. I'm excited to be here.

Tim Fitzpatrick
Yeah, me too. I'm excited to dig into this. Before we jump into the heart of the interview, I want to ask you a few rapid fire questions, if that's okay. Are you ready to jump in with both feet?

Paul Berndt
I'm ready.

Tim Fitzpatrick
Okay. Very quickly, what do you do, and how long have you been doing it?

Paul Berndt
The simple answer I always say is I fix computers, and then I judge their reaction to how deep I go beyond that, because people tend to go, Oh, okay. Or they lean in and they want to know exactly what we do. I've been running my MSP for 14 years. I've been doing IT for 34 years. So I always say this is all I know, otherwise I'd be a bum.

Tim Fitzpatrick
Yeah. Well, so 14 years is a long time. In those 14 years, what's the most important lesson you've learned?

Paul Berndt
Cash flow.

Tim Fitzpatrick
Super important, right? There's plenty of people that are growing the business. They feel like they're profitable, but cash is not coming in as it should.

Paul Berndt
It's not just profits. Profits are important. Can't be wrong. And we'll jump to that. It's the highs and lows and having cash reserves, whether the influx of business or the dry spells. That's key. So cash flow, cash reserves, cash is king.

Tim Fitzpatrick
Super important. Look, we all know growing a business is hard, Paul. I mean, otherwise everybody would do it. Do you have any mantra or something motivational you say to yourself or share with your team to push through those times when you run into challenges?

Paul Berndt
I just have grit. I will never give up. When they do a personality analyzer, I'm one of those people that they say, You don't want to get in these people's way, and that's me. You don't want to get in my way. It'll make it happen. You don't want to know how I got it done. Just, I got it done.

Tim Fitzpatrick
Do you feel... This is a side question, but do you feel like people just either have grit or they don't, or can they acquire it or learn to have more grit?

Paul Berndt
I think anything can be fostered, but I get what you're saying there. And yes, the answer is some people quit very easily, and some people just go on and on and on. And I have a buddy who just ran 100 I think what he said, he ran 100 miles, and he's 54 years old. He's like, he just wanted to challenge himself, challenge his body to see if he could run 100 miles nonstop. That's just insane. I think grit is one of those things that you have it, you can foster it. But, boy, if you don't have it, it's hard to foster.

Finding Ways to Leverage Time with Fulfillment

Tim Fitzpatrick
Yeah. I tend to agree with you on that. So we talked about a lot of stuff, Paul, in the pre-interview, and I'm excited to dig into this because I think there's a lot that people can learn from your experience. But one of the things that we spoke about initially was your company is based out of Minnesota, and you now live full-time in Florida. So you've obviously put some things in place for your business to be able to do that. Can you tell us more about how you did this and how this all came about?

Paul Berndt
I really designed my business as a DR, as a service business, and then we added management services after the fact. And I was never the direct person to do the work. So that got me hands off. And a lot of owners have a problem of letting go. Well, I never had direct control of that work anyway in the first place. And when you say put things in place, I always enabled my team. I always believed in enablement, training, not just straight up training, but I mean is coaching and correcting and making sure that it is a continuous path, feedback path. Like, Hey, you did that great, or, Here's what you did wrong in this one, and we can do better next time. And really enable them to make decisions without me. So I'm not a roadblock. I don't slow people down. And I moved to Florida, and I thought I'd be going back a lot more often. They just don't need me. They need their paycheck, and they need strategic direction, and they're off to the races. They're a fantastic team. And that's what I put in place as a team.

Tim Fitzpatrick
So you were, from the outset, or at least early on, you were not involved in the fulfillment of the service itself?

Paul Berndt
Not all the services, especially on the help desk level, on the day to day stuff. No. I was really more on the presales, on major projects. And when, I'll say it, shit hits the fan, I'm there. My team knows that.

Tim Fitzpatrick
Got it. But that was because you were not involved in the fulfillment, from an early point in the business, you had to hire those key people that were handling fulfillment, which really took you out of a lot of the day-to-day challenges that a lot of business owners face.

Paul Berndt
Correct. It enabled me to scale because I'm not My time isn't sucked up doing stuff that somebody else can be doing. I'm always focused on what only I can do and try and always remember that. What can I be doing for the business that only I can do? And then focus on that.

Tim Fitzpatrick
I've interviewed other MSP owners who weren't technical, and every single I know one of them was in a similar situation because because they weren't techs, they couldn't get into the fulfillment. They were forced from the beginning to find key people to handle that. And I almost see that. I mean, it's a benefit, right? Because they don't have that crutch that they can rely on and go, oh, well, I can help with that. But as business owners, if we want to grow something that can run without us, we have to we get out of fulfillment as quickly as we can, or we have to find ways to leverage our time with fulfillment, right? And with MSPs, it's difficult to find ways to leverage your time in fulfillment, I think. You got to find the key people, which you've done, and that's enabled you to get out of that. You're off the treadmill, to put an analogy there. Most MSPs are on the treadmill. They're running every day.

Paul Berndt
Yeah. And then they have to learn a new skillset of being a business owner versus the lead tech, the senior tech, the go-to guy that brings them in. And honestly, I did a job for another MSP the other day, and I loved it. And I'm like, Man, I missed this.

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Finding a Strategic Partner to Grow a Business

Tim Fitzpatrick
So the other thing that you did, Paul, when you you moved to Florida, was you found a strategic partner that helped grow the business in the Florida area. How did you go about this? How did you choose this partner? I mean, had you already done this in Minnesota? And is this something that you plan to repeat? What was that like?

Paul Berndt
So what was that like is I always thought I was going to be the first branch of NetVPro and grow the business from the ground up like I did in Minnesota. And when I got here, it was 10 years later, and I was like, I just don't want to work that damn hard. So then I thought, well, how can I accelerate this? And there was a need. And we always competed against a lot of copier companies in Minnesota that just didn't do IT very well. So I thought, well, let's go to a copier company and offer up us as a white label service to make them actually really good at IT because we're really good at it. So they can add it to their portfolio without investing in finding the technicians and finding the bills. I'm sure my partner would say this, that I saved them hundreds and hundreds of thousands of dollars by not having to invest in people, try and grow it organically. So how did I go I just started knocking on doors. I literally walked up, Google-searched copier companies and started having meetings with them and said, Hey, do you have IT services? Do you want to get into IT services? And found one that said yes. And yes, the next question, am I going to repeat it? I always thought I was going to repeat it. I'm not going to repeat it.

Tim Fitzpatrick
You're not? Why are you not going to repeat it?

Paul Berndt
I'm focused more on our next step is profitability. And I think we reached critical mass when we went past $2 million this year, this past year. So now I'm like, okay, let's ride this train a little bit and see where we can go to the next level.

Tim Fitzpatrick
Yeah. But if you wanted to, this is something that you could potentially repeat.

Paul Berndt
No, Oh, yeah.

Tim Fitzpatrick
There's a few things I want to pull out of this that I think are easy for people to overlook. One, the partnership helped you accelerate, but it also helped them accelerate. It was mutually beneficial. But I love the way that you've determined who you were going to start to hold call and outreach to. Because most people would have completely overlooked this. Who are our competitors? Who are some of the competitors that we're running into in our current area of Minnesota? Man, these people might actually be good partners. Most people look at them and go, Dude, they're competitors. I compete with them. How can we possibly work together? But you were open-

Paul Berndt
Yeah. In Minnesota, we work with a lot of copier companies because we don't provide So it's like we naturally just work with them. It's like, no problem. You have IT services besides copiers? No problem. We know they're constantly trying to needle us and make sure that we're doing a fantastic job. And like I said, we hold our customers with awesome service, so we just don't worry about it. And I always believe there's enough business out there, especially nowadays. With the employment the way it is, people have a hard time finding good people. And I have people knocking on my doors wanting to come work for me, which is crazy. People are like, Where do you find your people? I'm like, People come. Our culture, our personality, whatever it is, they just want to work here.

Tim Fitzpatrick
The other thing, too, with focusing on copier companies or something similar, it's their main expertise is copiers, right? And they're branching out into into a complementary service. But because they're branching out and it wasn't initially their core competency, there is a higher likelihood. It doesn't mean that it's always going to be the case, but there's a higher likelihood that they're going to have some challenges with that.

Paul Berndt
Well, it's like anybody. They fall back into what their comfort zone is.

Tim Fitzpatrick
Now, you don't have to go super specific here, but because you are white labeling, there has to be enough margin in it for it to make sense for them and for you. I mean, how much less margin are you seeing white labeling versus the stuff that you sell direct?

Paul Berndt
Yeah, it's about 20 %. And the elite IT companies are about 20 %, 20 or above in profitability. And part of my theory was, and it has proven out, that my main set of staffing came out of Minnesota. So we had less of a labor cost right up front compared to East Coast, South Florida, I mean, cost of living everywhere has gone up. But if anybody's been here and they just go to a restaurant, it's like, what the hell? Maybe I won't go to South Florida on vacation anymore because. That was my theory is, it really was we could keep our cost the same, but still add margin for them to make money, and we still make money.

Tim Fitzpatrick
Yeah. Well, you can still, even though it's less margin, you don't have some of the upfront costs that you might otherwise have. So it can certainly balance itself out. So I appreciate you sharing that because I think there's definitely something that people can learn from that experience. And it's obviously been beneficial for you and for them.

Growing a Business with Word Of Mouth and Referral

Tim Fitzpatrick
Let's shift gears a little bit and talk about sales and marketing. We got to talk about marketing. But sales and marketing tend to be quite a journey for most business owners. Can you just share how your sales and marketing efforts have evolved as you've grown? You mentioned that you guys recently eclipsed that $2 million revenue mark. A lot of MSPs, and frankly, a lot of people in professional services, struggle to break through that million dollar barrier. And then once you break through a million, getting to two, three, four, five, there's barriers at each one. So any thoughts that come to mind there? I'd love to just hear how your sales and marketing efforts have evolved.

Paul Berndt
Yeah. I mean, we never really marketed. It was always in person, doing a great job, like a lot of people, word of mouth. But most of the customers came from, just getting in front of them. That's really where it comes down to. We've tried cold calling, cold calling firm. Big problem there was the handoff from when they got somebody to when we got engaged. The handoff just didn't work. So I hired my daughter, and she was killing it. And then she's like, This is tough. So she went back to working at Starbucks, where people, they say, Thank you for your coffee. That rejection is really, really hard. So we're working on all kinds of things that we do. The pandemic, we used to do tables of knowledge. We do fully managed, and we do co-managed, and Unfortunately, we fall into the co-managed a lot easier because we're very technical. So we had what we call table of knowledge. We just bring IT people in and sit around and talk about tech and take out what's on, what's changing, and just do education that way. And COVID hit, and we just brought it all online and did YouTube videos and do what we call power launches. And we just converted it to business bites. And we're trying to focus more on the business outcomes that people are after.

Tim Fitzpatrick
Yeah. So you're creating content. Are you doing any email marketing, things like that?

Paul Berndt
Very little. We send out... Actually, people call it wall boxes, but we literally call it... We just send out coffee. NetVPro branded coffee. We just slap our logo on it and send it to prospects. Hopefully, they consume it and look at the logo every day and go, Why would they send me coffee?

Tim Fitzpatrick
So you're still doing a lot of the business generation that's happening is still a lot of word of mouth and referral?

Paul Berndt
Yes.

Tim Fitzpatrick
So would you say, I mean, the biggest driver then of helping you push from one to two, was it the partnership that you-

Paul Berndt
It was the partnership. Yeah.

Tim Fitzpatrick
Got it.

Paul Berndt
Yeah. We plateaued at one. And then when we finalized the partnership, that's when it was all rated.

Tim Fitzpatrick
Because What I find with a lot of the business owners that I talk to, you can grow a fairly decent size business on word of mouth and referral, but you You hit a ceiling. Whether that ceiling is at 750 or a million or a million and a half, you hit that ceiling, and then you got to look for other ways to grow. And in your case, the partnership just helped accelerate that and help you push through that ceiling, right? Which the thing I love about this is there's no one right way to push through the ceiling. There is no one size fits all marketing plan. There's all kinds of tactics that can work. It's just what's going to make the most sense for you. In your case, establishing that partnership as you moved into Florida made the most sense, and it's worked and it's helped you get to that point. And now it's okay, we're at two. What are we going to do to get to three? If that's where you want to go, right? So thank you for that.

Lessons from a Strategy That Didn't Work

Tim Fitzpatrick

You touched on this a little bit where you would outsource some of the cold calling. And we had talked about you had mentioned that you had outsourced lead gen with disappointing results. I'm assuming that's the experience you were talking about. When you did that, what did you learn from that? Where did things go wrong, in your opinion?

Paul Berndt
The biggest thing I learned from that was, like I said, the handoff, trying to get the same message, not just the message, but it was like, Okay, this person is ready for an actual conversation, and we really didn't... We're not getting this in a timeliest manner. And the companies, like I said, we back off a lot of our ask because it's like, okay, well, maybe we just don't want an appointment, but we just want to generate a good clean contact list that may be interested down the road that we can work And then we changed completely to another tactic of another product that we sell, not just managed services, but web development services, particular to associated And that went really well. But it was like, okay, why are we paying them to do something that we completely scripted and designed so we can just bring it in-house? It was It's like, yeah. The reason why they got me is they said they used AI and they give us the whole buyer persona and profile to know how to communicate with them, and they never did. And we fought and fought and fought. And I'm like, what am I fighting for? They should just be handing this over. This is part of what they said they were going to deliver, is buyer persona, because they nailed me. And I'm like, Okay, great. You nailed me. Can we nail other people and their buyer persona and how they like to be communicated with? Do they need a story? Do they need to feel good? All that marketing stuff. To me, I'm very direct into the point. So it's like, Okay, give me facts, figures, and let's make a decision.

Tim Fitzpatrick
Yeah. I want to pull a few things out here. And honestly, I did not think this was where this question was going to go, But I think it is a really good learning lesson for people to take in is oftentimes with marketing, when you approach somebody that's more tactical, that's doing the activity, whether it's outbound calling or paid ads or anything else, social posting, most marketing companies that do tactical work are not strategic. So They're great implementers. They're great at doing what they do. But too many of us approach people like that thinking that they're going to be strategic in certain ways, and they're just not. And so when I look at strategy, I think of it as fuel. And within strategy, the first thing is exactly what you touched on. Who are your ideal clients? Who's the market you're going to work with? And when we approach people that are implementing and we don't have that information already for them, they have the vehicle, but they don't have the fuel. Sometimes they'll give you lip service and say, Hey, yeah, we do this. We can help you with that. But what they're really doing, they have skin in the game. They have a dog in the fight because that's how they're going to make their money is by doing doing the implementation work. And so, oh, yeah, we can do the strategy, but they say they do it so that they can actually do what they really make money on. And so when we approach marketing providers as business owners, we need to know what we're getting into, what they're good at and what they're not, and make sure that we're giving them the fuel they need to be successful. But it also sounds like they were just having a difficult time. The handoff from them to you was not as smooth as it should be, right? And that transition has to be smooth, right? Because if it's not, It's this blip in the road. And then the prospect is like, whoa, wait, what's going on? And then that's going to impact your conversions as well. And so it's hard. And It's hard, too, especially, I think, when the people you're approaching don't really understand your business, right? That comes up in conversations I have with potential clients all the time. Bam, working with this company. But man, I'm three months in, and they don't really understand my business. And because of that, it's impacting their ability to actually do the work effectively. So Thank you for sharing that. You are not in that boat alone. So many people have been in that boat. And unfortunately, this is one of those things a lot of us just have to go through and experience and then learn from it. So thank you for sharing that.

Conclusion

Tim Fitzpatrick
So what's next? Where are you focusing this year?

Paul Berndt
Profitability. I'm just looking at all our costs, everything we've done so much with the pedal to the metal. Now it's like, okay, what really works? And that's really part of it. And I'll say these words, too. Hope is not a marketing.

Tim Fitzpatrick
Yes, that's right. Yeah. Hope is not a great marketing strategy.

Paul Berndt
Right. It has worked for us because things have come in, but it's more luck than... But talking to people like you makes total sense for us.

Tim Fitzpatrick
Yeah. Thank you for sharing that, because I always say to people, Look, having even a bad plan is better than no plan. Because what happens with marketing, frankly, this happens with anything. If you don't have a plan, what most of us end up doing is throwing stuff up against a wall, right? We're hoping something sticks, but it's just it's scattered. It's inconsistent. We don't have focus. We don't know what to prioritize. It's just a mess. So we're better off having an imperfect plan and implementing that and learning from it. And then we can make course corrections along the way. So I love that. Hope is not a good marketing strategy. So before we wrap things up, Paul, knowing what you know now, anything you would do differently?

Paul Berndt
Do differently? Yeah, I knew that question was coming. I thought, oh, yeah, I got something for that. But I'm like, yeah, I guess-

Tim Fitzpatrick
Would you have moved to Florida sooner?

Paul Berndt
No.

Tim Fitzpatrick
You weren't ready.

Paul Berndt
No. No. Yeah, knowing what I know now. Yeah, there's so many follies But the part of those follies are lessons learned.

Tim Fitzpatrick
So the mistakes help us grow, right?

Paul Berndt
Yeah. I mean, part of it, I was very, very hesitant about hiring marketing firms. Right now, at hindsight, like you said, without the strategy, it's just not going to work. And like I said, once we came up with our own strategy, I thought, well, we'll just bring it in house. And that has helped a lot. But now I burned out my daughter. So that I probably would have done differently, I guess, is give her coaching and direction sooner so she wouldn't get burned out. I regret that.

Tim Fitzpatrick
i love that. Where can people learn more about you, Paul?

Paul Berndt
NetVPro.com, N-E-T-V-P-R-O.com. I'm on LinkedIn, I'm on YouTube, I'm all over the place.

Tim Fitzpatrick
Awesome. We will make sure that shows up in the show notes. But if you want to connect with Paul, head on over to NetVPro. Paul, thank you so much for taking the time. I really appreciate you sharing your experience building NetVPro. There was some really good stuff that we were able to pull out of this conversation. So thank you for that. Those of you that are watching, listening, thank you for doing so. I appreciate you. If you want to connect with us, you can do that over at rialtomarketing.com. The other resource I've got for you is over at revenueroadblockscorecard.com. If you want to accelerate growth, you got to remove the roadblocks in your way. revenueroadblockscorecard.com, you can assess which of the nine revenue roadblocks are slowing down your growth. So it takes less than five minutes. Go check it out. Paul, thank you again. And till next time. Take care.


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About the author, Tim Fitzpatrick

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