Using Independent Contractors To Scale & Grow

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 Kelly Hammons for this week’s episode of The Rialto Marketing Podcast!

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Using Independent Contractors To Scale & Grow

Tim Fitzpatrick
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. 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 Kelly Hammons from Secutor with me today. Kelly, welcome, and thanks for being here.

Kelly Hammons
Thank you. Glad to be here.

Tim Fitzpatrick
Yeah, I can't wait to dig into some of this stuff because you've set up your business in such an interesting way that I think a lot of people can learn from. But before we do that, I want to ask you a few rapid fire questions if you're ready to jump in with both feet.

Kelly Hammons
Sure. Let's get at it.

Tim Fitzpatrick
So very quickly, what do you do? How long have you been doing it?

Kelly Hammons
Okay, so I started Secutor 10 years ago, and we are a cyber security consulting company. I've been in cyber security for, oh, shoot, can't even say how long, well over 20 years. And I started the company as a way to, well, get into consulting. It was my first foray into running my own business. And I ended up building it as a way for, as I learned how to get into consulting, I've discovered lots of other people out there that wanted to do the same and were at the same place I was when I started the company and didn't know how to. So I ended up building the company in a way that they could get into consulting and without having to do all the business side of it, the marketing and the sales and all the back-end stuff that's needed in order to run a company. We take I'm aware of that for them.

Tim Fitzpatrick
So you were in cyber before it was cool?

Kelly Hammons
Yeah.

Tim Fitzpatrick
It reminds me... Okay, so I'm dating myself here, but there was a shirt that was super popular when the whole twilight series of movies was out, and it said, I was pale before twilight made it cool. I almost got it because I am a pale, white Irish kid. Being in cyber 20 years ago, it certainly was not the buzzword it is today?

Kelly Hammons
No, not at all.

Tim Fitzpatrick
Yeah, crazy. What's the most important lesson you've learned in the last 10 years? I know that's a tough question. Did you learn the things?

Kelly Hammons
Oh, gosh. Yeah, it is. That's a hard question, and hard to choose just one because I have learned a lot. I think the latest, my newest lesson is not to try to do everything myself. It was an easy trap to fall into when we were a lot smaller, because I could wear all the hats and still have time left over to take on customer projects myself. But it's also hard to get away from. Because like I said, I started the company because I wanted to get into it. So I wanted to learn how to build the business and all of these different aspects of building the business were all interesting. That's like, oh, it's something I've never done before. Let me learn about that. Let me learn about that. But then it's all internalized and it's all the things that I now know how to do. And giving that up to other people is hard for me.

Tim Fitzpatrick
It's tough, but if you want to grow, you got to start giving those things up.

Kelly Hammons
Yeah, I've become a bottleneck.

Tim Fitzpatrick
Yeah, yeah. And the vast majority of us as business owners are the bottleneck until we have the awareness that we are the bottleneck and we start doing something to eliminate that. So I love that. Now, we all know growing a business can be challenging at times, Kelly. Is there any mantra or motivational saying that you say to yourself or you share with your team to push through those times when you're running into roadblocks?

Kelly Hammons
Yeah, you're right. It's hard and it's a roller coaster. Lots of ups and downs. But in the end, well, it's definitely way harder than working for someone else. I'm even on vacation. I'm never really on vacation. So I guess I try to think of the future that I'm trying to build, that we are trying to build. And the good that we're doing for our consultants, and a lot of our customers, too. But the consultants are near and dear to my heart because without them, we wouldn't be the company that we are now.

Tim Fitzpatrick
So for you, it's really keeping the vision and the long term goals, mission of the company top of mind so that when you do hit those roadblocks, it's like, hey, this is why we're doing this, and this is why we need to keep pushing.

Kelly Hammons
Yeah.

Having a Team Made Up Entirely of Independent Contractors

Tim Fitzpatrick
Cool. I love that. So you touched on this a little bit, but I want to dig into this. So you've been able to grow Secutor without bringing on employees. And your entire team is contractors. Give us an idea, at this point, about how many contractors do you have within the company? Some are working part-time, some are working more full-time. But how many contractors do you have working with you at this point?

Kelly Hammons
Yeah. So every one of us is an independent contractor, 1099 and our IRS Parlay. But But there's 120 of us, over 120, coming up on 130, and all from a variety of backgrounds. Generally, there are people that are at that point in their career where they're highly experienced. They've been doing this a long time. They've been working for other people for many, many years, and they recognize that they're capable of doing more. And it's a big jump from being working for someone in cybersecurity. And even as a CISO, Chief Information Security Officer, it's still a big jump from doing that, working for someone else to starting your own company. And so we provide a bridge that allows them to get into consulting without all that extra overhead like we were talking about before. So we have people that are full-time working for other companies, and then they want to get their toes in the water and say, tell me, I have availability evenings and weekends. I have other people that are retired and want to take on one or two projects a year, and they'll tell me, just get me out of my wife's hair every once in a while. We have other people that are in between jobs and really are looking for their next full-time job but want to do some consulting in the meantime. And we have others that are full-time consultants. This is all that they've done, all that they do. They've made that jump. They've got enough of a book of business. They know what they're doing and have been able to build a license style for themselves that works for them. I lost track of what your question was.

Tim Fitzpatrick
Well, no. So you were answering my question, which really was... You've got 120-ish plus contractors. It's a mix of all different types of people. You did a really good job answering that. Here's what I'm curious about is, why did you initially go down this path and start using this model? I mean, did you see somebody else doing it? How did this come about?

Kelly Hammons
Well, it came about because I had no idea what I was doing. So I don't have a business background, right? I've done a form of consulting for a long time working for cyber security vendors, helping their customers grow and use their products in better and more complete ways. And whenever I struck out on my own, I thought, I just wanted to build a company that was just or just start doing consulting. Actually, a bit of a funny story. I was early on invited to a ISE² chapter meeting to give a presentation on vulnerability management. That's my particular area of cybersecurity by a longtime friend who happened to be the President of the chapter at the time. So I showed up, I gave my presentation. And then afterwards, we got to talking, and And he told me that he knew I had just started my company, and he was wanting to do something similar. And what does he need to do? And me, now the super expert, I've been doing it a whole month now, started telling them all the things that I had done, creating the website, getting CPA, getting marketing material, just all the different things you need to do to create a company. And I could just see his face falling. Wait a minute. I've got to do all of that? I just want to do consulting. And as we're sitting there talking, everybody else was milling around after the meeting, and they consolidated on our group. And it turned out there was a bunch of people that were in the same situation. And they were looking at me like I'm some expert. But I just had this shell of a company that I had just started. And I hit on this idea of all these people are wanting to get into consulting. I have this company that I just created. I can do anything with it at all. What if we found a way to work together under this Secutor name and equitably share in the profits of who takes on a what project and who does what efforts being able to earn money off of that? And it struck a cord. And we went away from that and brainstormed over the... It took us about a year because none of us had any business training. So we just worked at it and came up with different possibilities until we settled on the model that we have now, and nine years later, we're still using it.

Tim Fitzpatrick
Yeah. So it's worked well. The other thing that, correct me if I'm wrong, but my thinking is that because of this model, you are also able to attract some really strong cybersecurity talent because cybersecurity people are hard to come by. There's a shortage. Finding people that are good is challenging. But for you, because, hey, you can be full-time. Hey, if you're working for a company, awesome, man. Let us bring you in on some projects so you can make some money on a side hustle. There's some great people that are working for other companies. But, dang, if they could make another 10, $20, $30,000 a year doing a side hustle, awesome, right? You've just given them another opportunity that they wouldn't have had otherwise. Do you find that to be the case?

Kelly Hammons
Yeah, that's exactly the purpose. Enabling them to, whether it's earn just a little bit of extra money on the side, as much effort as they want to put into it, the more they put into it, the more they can earn. But even just with a little bit, there's some serious revenue that can be brought in.

Tim Fitzpatrick
Yeah. And you're using the model to your advantage to be able to attract strong consultants when you need them. So I love that. Now, there's another way that you're leveraging your your team of consultants, which is with word of mouth. Word of mouth has been a big driver of your growth. And you're using your consultants, your contractors as a huge referral source. How do you have this set up? How have you done that?

Kelly Hammons
By recognizing the value that that brings and thanking them, not just verbally, not just saying thank you, but rewarding them for it and rewarding them generously. So I take the perspective of if I hadn't gotten this referral from this person to this company, we would have never done business with them at all. So every time we get new business from that customer, I keep rewarding that initial referral with no limit. So if we do a million dollars this year with them, and 10 years later, we're still doing a million dollars with them, that referral person is going to keep getting paid.

Tim Fitzpatrick
Keep getting paid.

Kelly Hammons
Over and over and over again.

Tim Fitzpatrick
Got it. So you're giving them... Are you giving them a percentage of profit or top line?

Kelly Hammons
Of the top top line.

Tim Fitzpatrick
Top line. Okay. And because of the types of jobs that you're doing, you may be getting referrals from contractors that are working with you that might not be involved in that job that they're actually referring. Is that right?

Kelly Hammons
Oh, yeah. Yeah, absolutely. In fact, some of the people that work for us that are associated with Secutor don't do any consulting at all.

Tim Fitzpatrick
They just refer.

Kelly Hammons
Yeah, they just refer. They're completely busy with their own lives. Some CISOs and CIOs of some big name companies that everybody listening would recognize if I started to name some of them. And so they don't have time to do consulting or time for anything else, but they've got a great network. And people are always coming to them asking them, who do they recommend for this, that or the other? And they just point them at us and toss it over the wall to us and we take care of it. And then they just keep getting paid.

Tim Fitzpatrick
Yeah, they just keep getting mailbuck money.

Kelly Hammons
Yeah.

Tim Fitzpatrick
I love it. So the thing that I want to pull out from this so the people don't miss it. Because I talk to a lot of companies that are very similar, generating a lot of business from word of mouth and referrals, but it just happens. They don't have a process for it. They don't have a system for it. And when you build a process and a system for it, a program like you have, you can maximize those results. And so what we're talking about here is often really low hanging fruit for a lot of businesses. You're generating a lot of referrals and you have no process, no program in place. Do it now. Do it now, and you're going to maximize the results that you get from that. So thank you for sharing that. And I love the fact that you are so generous with it. I think that's another reason why it works so well for you, because it's like, man, why would they not? You pay them every month for as long as that person is a client, or if it's a project, and then they come back. So it's like that referral source is tied to that client forever, which is awesome.

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Getting Referrals and Testimonials from Clients Can Be a Hurdle

Tim Fitzpatrick
Now I want to shift gears. We're still talking about referrals a little bit, but one of the things you touched on, Kelly, when we connected for the pre-interview. You'd mentioned that getting referrals and testimonials from clients can be a hurdle, can be challenging at times. What are your thoughts on that? Why do you think that is? Is it because you have a hard time doing it? Or what's happening there? Because I think a lot of people struggle with this.

Kelly Hammons
And I don't really have a good answer there either. So I struggle with it still today. We're trying to put better processes in place. So we have the processes on the one side for referrals, but not for following up with customers. We know we've done a good job for them. We know that they keep coming back to us over and over again for other projects and other services. But getting their approval for using their logo on the website or getting a little snippet of a statement that we can use is... I think maybe it's harder than maybe other industries because in the cybersecurity space, they're coming to us because they did something wrong and something that is they don't want anybody to know about. And, of course, there's some cases where they have to disclose that something's happened. But if it hasn't gotten that extreme, and it's just like they've done a terrible job of, or not a terrible, but an inadequate job of keeping up with their patching or their vulnerability management, or their firewall wasn't completely configured properly, and nobody got in, but they needed help. Nobody likes to advertise that. So it's hard to get them to make that step of, Yeah, it's okay to talk about that.

Tim Fitzpatrick
I want to share a couple of thoughts here because you really touched on it, right? With referrals and with testimonials or reviews, right? The underlying principles of both of those, I believe, are really the same. And it's all about having a process in place, a system in place. And that system should be tied to the journey that your clients or whatever business it is, whatever journey those clients go through. And what we're looking for are those times in that process where it makes the most sense to ask for a referral or ask for a testimonial. And when we do that, we want to remove the hurdles. Because any hurdle is going to make it more difficult, which is going to... People are going to drop off in the process. And so when we're thinking about a referral process or a review or testimonial process, it's all about what are the points that make the most sense to ask? And then how are we going to ask and how are we going to make it simple for them to do? And then putting those steps in place. So for example, with reviews, this part of the review process can be automated. And so it's just like, hey, when they reach this point in the process, then we send out three emails, if they don't open any of them, asking for a testimonial or a review. We give them the direct links to where they can leave a review. Or if we want them to leave a testimonial, we tell them, Hey, these are the things that you want to include in there. Anything we can do to make it as easy as possible is going to help us get more. The reality is most of us don't need a ton when it comes to testimonials and reviews. We just need some some good ones from the right people. But certainly, with cyber, man, the minute you solve that huge problem, and the stress level was here, and now it's down here and they're like, oh, sigh of relief, right? That's the time. That's the time to ask. Some people still aren't going to do it no matter how easy you make it, but you don't need everybody to do it. You just need some of them to do it, right? The one that I always bring up with MSPs, because MSPs, they have support tickets. Anytime you solve a support ticket, perfect opportunity to ask for a referral or ask for a testimony. That's another example of when in the journey does it make the most sense to ask. When you identify-

Kelly Hammons
You're absolutely right. Having a process is It's very, very important. And that is definitely where we have failed, where I failed as a business owner or business leader, is not having that because we are so focused on solving the customer's problems. That after we solve the problem, asking them to help with our problem is such a shift of gears that it's the opposite direction for me. So You're absolutely right. We need to have a process that helps with that.

Tim Fitzpatrick
And it doesn't have to be a complicated process either. For a lot of our project work, even our ongoing work, we have checklist of all the things that need to get done. For us, it's just we added a step in the checklist. At this point in the checklist, you need to ask for a review, right? Whether you're manually sending email or you're just tagging that contact in your email marketing software so that they automatically start to get that email sequence, that series of emails. Man, I don't think it really matters how you have it set up. It's just a matter of having that reminder to actually make sure it happens. So I hope that helps you. I hope it helps people that are watching or listening as well, because a lot of people struggle with this. There's It's low hanging fruit here for a lot of businesses.

Lessons From a Failed Line of Business

Tim Fitzpatrick

Now, I want to transition because I talked about MSPs a little bit. You are a cyber consultant. You are not a managed service provider. But several years ago, you tried adding managed services. So if I get this wrong, tell me. But when I think of managed services, just to make I'm sure this is clear for people that are listening, as a cyber consultant, you're coming in and you're helping with any number of issues that that client may have from a cyber security standpoint. They got breached. They need tools implemented. They need a cyber assessment done, all those things, right? But with managed services, you're selling ongoing services. You're managing Microsoft 365. You're managing desktops and any other endpoints that they may have on an ongoing basis, right? So you tried to add managed services. You learned some valuable lessons in this process. And you're not doing it anymore, right?

Kelly Hammons
No. You could say we dabbled with it.

Tim Fitzpatrick
Okay. What did you learn? What did you learn by doing that?

Kelly Hammons
I Well, quite a lot. So one is that it wasn't our area of expertise. The talent that we have, the people that we have is so focused on and so much experience with cybersecurity. Yes, there's some overlap in IT, which is the MSPs out there, the managed service providers is IT. And And there's overlap there, but it was in our area of expertise. I learned that there's a lot of competition out there for MSPs, and the margin through that is very, very low. We learned that the type of customers that we've had before and after, so on the security side, are generally much larger than ones that are interested in having MSPs. And it arose out of one particular customer that we had that needed MSP services. And one of our consultants that had built a successful MSPs or the tech stack for successful MSPs in the past. And he was wanting to try to build that for himself. And so we were able to get the tech stack built very, very quickly because he knew exactly what he was doing. But the marketing side of it and the sales side of it, it was all so different from our focus on cybersecurity that we weren't really able to make the jump and go beyond that one customer.

Tim Fitzpatrick
Yeah. So was that one customer that was driving it? But as you started...As you tried to expand, you realized, Gosh, most of our clients don't actually have this need.

Kelly Hammons
Yeah.

Tim Fitzpatrick
Yeah. There's multiple things to pull out here. Look, when I was in wholesale distribution, I was a partner in a wholesale distribution company. We sell consumer electronics. We were selling home theater equipment. We made a similar decision to get into selling alarm home security equipment. We're like, Gosh, our clients are already in the home. This is another product that they could sell. Some of our clients were already buying it from somewhere else, and we failed miserably at it. Part of it was it wasn't the right products that people were already buying. Part of it was our clients that were buying it didn't want to buy it from us. We didn't talk to enough of them ahead of time. What we should have done was say, Hey, we're thinking about getting into this. If we have this, would you buy it? It sounds like you had a similar thing where it's like one client asked about it, but had you pulled a lot of your existing clients, you would have found out ahead of time. It would have Man, this doesn't make sense for us. I think the other thing that's challenging, too, on the MSP side and the way your business is structured, you have so many different contractors. Man, with MSPs, some MSPs will disagree with me on this, but I think having a standardized stack in the services that you offer and what you specialize in is super important. Have a repeatable model that's easy to implement. And with all the contractors that you have, I think it is super difficult to do that.

Kelly Hammons
Well, and there again, the focus on the cybersecurity side and the type of services that MSPs provide and to the type of customers, there was just very little overlap in that Venn diagram.

Tim Fitzpatrick
Yeah. Yeah. Yeah. I think the biggest takeaway that I have from what you shared and my experience in it is, you got to talk to your existing clients at a time before you make decisions and enough of them. It can't be a small batch of them. You got to talk to a lot of them to say, to figure out, hey, does this make sense?

Kelly Hammons
Well, and also to make a difference there, there's the MSP side that we dabbled with and failed miserably.

Tim Fitzpatrick
We all have. We all have.

Kelly Hammons
Is we do do managed services on the cybersecurity side.

Tim Fitzpatrick
On the cyber side, yeah.

Kelly Hammons
And there, we didn't need to standardize in that way. And we could still build custom non-cookey-cutter solutions for our customers. And the customers were big enough that we could assign a person and say, this is basically like doing an individual project, but you just keep doing it over and over a long period of time. And we manage for several customers, their vulnerability management program so that they didn't have to learn Qualis or Tenable or Rapidseven or what have you. We have those people. We run the tools for them, provide them their report and the services and keep things, the database is clean and the data that they get out of it correct and useful and prioritize so that they can action it very well. So we do continue to offer managed services on cyber. Yes.

Tim Fitzpatrick
But you touched on this in the beginning, too. And this was the mistake that we made on the distribution side, alarms were not our area of expertise. On the MSP side, it wasn't your area of expertise. You can do it on the cyber side because you know it and you're great at it, which is a really key distinction, I think.

Conclusion

Tim Fitzpatrick
So, Kelly, this has been awesome. I want to ask you a few questions just to wrap things up. What's next? What are your aspirations for the future?

Kelly Hammons
Keep growing, but in an organic way, we want to make this available for more and more people to join and further their careers. We want to help more customers. We are putting more processes in place, trying to get me out of being the bottleneck. I've hired one of my virtual CISOs who knows cybersecurity even way better than I do, and hired him as our chief operations officer. So he's able to take a lot of that load off of my plate, and expanding the sales team, and just keep plodding along and adjusting things as we go along to enable that growth and take on larger and bigger customers.

Tim Fitzpatrick
Anything you do differently, knowing what you know now, anything you would do differently?

Kelly Hammons
Well, what stuck in my head, as from what we were talking about earlier, is doing everything myself. Don't do it all myself. Recognize my limits. Recognize what I'm not good at, and ask for help. There are a lot of people out there that believe in what we're doing. And I would say that to other business owners and business leaders as well, for their companies and theirselves, they have people that believe in them, that have different skill sets than they do, that would be happy to help and to reach out and to have those resources and get the help that they need.

Tim Fitzpatrick
Yeah. The help is out there. I still struggle with this at times. I'm not great at asking for help either. But the one thing I will say I have learned from it is early on, I felt like asking for help was showing a sign of weakness. It's actually the exact opposite. It shows strength and it shows confidence. If that helps anybody that's listening or watching, thank you for taking the time, Kelly. If people want to connect with you, where can they connect with you?

Kelly Hammons
Well, our website is Secutoris.com, and they can find us on LinkedIn. Look for Secutor Cybersecurity or look for my name, Kelly Hammons.

Tim Fitzpatrick
Well, awesome. We will make sure those are in the show notes, Secutoris.com or look up Kelly Hammons on LinkedIn. Thank you again for taking the time. Those of you that are watching, listening, thank you. I appreciate you. If you want to connect with us at Rialto, do that over at rialtomarketing.com. You can also connect with us over at RevenueRoadblockScorecard.com. We talked about a number of different things today, but one of the things we touched on a few times was referrals. Referrals, retaining clients, that is one of the nine Revenue Roadblocks we help clients remove. Over at RevenueRoadblockScorecard. com, you can figure out which of the nine roadblocks are slowing down your growth. Takes less than five minutes. So go check it out. And until next time. Take care.


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About the author, Tim Fitzpatrick

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