Podcast  |  Balance,

1.5: What’s Wrong With a Lifestyle Business?

lifestyle business calm businessman

Photo: Andrea Piacquadio, on Pexels

“I want to see 1,000 MSPs running a business the way that they want”

How the MSP industry typically defines success may not be how you define it—and business coach Andrew Moon wants you to know that’s OK. In this episode:

  • Why “lifestyle” business doesn’t mean “not serious about success”
  • The way to uncover your true goals
  • Why common industry benchmarks aren’t all they’re cracked up to be
  • How to untangle your self-worth from your business
  • The importance of a supportive community

Who’s on this episode

Host: Jennifer Tribe
Guest: Andrew Moon, Orange Nomad

Andrew Moon, Orange NomadAndrew Moon is a lifelong entrepreneur who has launched and run several successful businesses of his own since age 8. After running a successful MSP for 10 years, which he sold in 2014, he founded Orange Nomad to help MSPs, small businesses, and entrepreneurs bridge the gap between strategy and execution. Andrew is host of the Do What Is Necessary podcast, and serves as a Tribal Elder in Nigel Moore’s Tech Tribe.

Episode transcript

Jennifer: I’m Jennifer Tribe and this is Workflow, the podcast about growing a happier, healthier MSP. More profit, less stress.

Today on the show, what’s so wrong about having a lifestyle business?

I don’t know about you but whenever I hear the term lifestyle business used in the MSP industry, it’s never in a flattering way. It’s always with a slight sneer almost, like the term means they’re not a serious business, small, not particularly successful.

So today we’re going to unpack that term, look how the MSP industry typically defines success, and how you might define it. Ultimately, what I hope this episode will do is get you thinking about what success means for you and what you want for your business. Because nothing will make you unhappier in your work than striving for goals only because they’re the bar you’ve been told you need to reach, or feeling like you’re a failure because you’re not hitting those goals when they weren’t even really your goals in the first place.

My guest in this conversation is Andrew Moon who knows this territory very well. Andrew owned an MSP for 10 years, sold it in 2014. He’s now a business coach, helping owners figure out their path. You may know Andrew from the Tech Tribe, where he’s a Tribal Elder working closely with Nigel Moore and the team to help support MSPs worldwide.

I started by asking Andrew if his experience hearing the term lifestyle business was the same as mine.

“We’re all lifestyle businesses”

Andrew: Yeah, and it’s sad that you’re still hearing it. I saw that 20 years ago where if I have a small business or I only had so many employees, it was a weird dynamic cause yeah you’re looked down upon like, okay, you’re not a real business, you’re not anything I need to worry about. And yeah, it was disheartening. But yeah, I still hear that. Still very dismissive of the term lifestyle business.

You know, it doesn’t matter if you’re a $1 million MSP or $500,000 MSP or $5 million MSP, we all want that business to live a lifestyle that we want. So to me, we’re all lifestyle businesses. It’s just how much do you want to do? How much do you want that business to fund what you want to do? We’re creating those businesses so that we can have the freedom. That’s why we all create as entrepreneurs. We want that freedom to dictate when we do things, with who we do things, and where we spend our time.

Jennifer: Right away, Andrew gets to the crux of the matter. Isn’t nearly every business created to give the owner a certain lifestyle? Not every owner wants the same lifestyle – some want to maximize their income, some may want to be recognized as a name in the industry, some may want something they can eventually work in just part-time. The point here is that just because you want your business to enable a certain lifestyle for you does not mean you’re not serious about making it work. Andrew went on to call out what he sees as the arbitrary success lines in the MSP industry.

“Everybody’s chasing that shiny penny”

Andrew: Everybody striving to get to that seven figures. I mean, there’s whole groups now, seven-figure MSP. That’s the first goal in line for people that that’s what they want. Once you reach $1,000,000, you think you’re going to join some club and belong to something that’s unique and nothing magical happens. The next threshold is when you get to that two and a half and now it’s 5 million. Like, at that point, you have something to be able to sell and possibly retire on. But the question you need to ask yourself, do you have it in you once you hit that million dollars to get to five.

Those are kind of the two thresholds initially for MSPs is, the million dollars and then how do I get from a million to five? And honestly, I think it’s very few and far between. It takes a special entrepreneur to go from a million to five. Just being honest, I don’t think a lot of MSPs have that in them, and I don’t think that’s any fault of them. They just want a lifestyle. It is a different lifestyle when you’re at a million to 5 million. You have so many people responsible to and so many people you’re responsible for. It’s not just you. And that part right there is what a lot of MSPs aren’t prepared for is the managing the people side. Because let’s face it, we have a hard enough time trying to understand our own feelings as MSPs.

Jennifer: Right. You’ve said that realistically not every MSP is going to make it from 1 to 5 million. And what if that’s not what you want? What if you’re like, okay, I’ve hit a million, I’m getting the profit margin that I want out of it, and I’m fine to just sit here for a while until I no longer want to sit here.

Andrew: I think it’s totally fine. There’s so much that is ego driven in this industry, and that’s one of them. Because everybody’s going to be telling you, okay, well, you’ve been stuck at $1,000,000 for two years now. Why don’t you get to 2 million? Or if you do this, you can get to three, or it’s just everybody’s chasing that shiny penny. And that’s where you need to make a decision at some point to decide to stop listening and to unlearn. Because they’re still following a track that works for them, and that’s fine. But I’m all about doing what is necessary for you. And doing what is necessary for you is different than me. It’s different from someone else. And that’s okay. That is perfectly okay. That is being an entrepreneur. I get to decide.

Jennifer: You get to decide. Maybe seven figures isn’t even your target. Maybe a business doing $500,000 in annual revenue is exactly where you want to be. Now as I was talking to Andrew, he did point out that if your plan is to sell your MSP, you will be more attractive to buyers if you’re doing a few million in ARR. So this is all part of what needs figuring out for you. Just know what you’re aiming for and why…is it because someone else told you that’s the marker of success or is it because it enables something that you want. Interestingly, Andrew told me that some MSPs struggle with the idea that selling is a failure.

Andrew: We’ll see a lot more this year of conglomerates or bigger MSPs coming in and buying those lifestyle businesses. And I don’t think there’s anything wrong with that. I don’t think that a lifestyle business owner MSP should feel like they’re any less of a business owner because they do that. If that was your intention to start out, great, you got what you wanted out of that. But I see a lot of on the flip side, I see a lot of MSPs staying with it because their business is tied to their self-worth. And if I sell to a larger MSP, I’m a failure. It’s business. If you’re not happy doing it as an MSP and you’re running a lifestyle business, just sell the darn thing, go do something else. Or just sell it and start over and not make the same mistakes you made with the one you’re in.

Jennifer: Yeah, I mean, part of the lifestyle that you want to enable would hopefully be happiness with what you’re doing. So if it’s not making you happy, then it’s not hitting that lifestyle goal.

Andrew: Exactly.

“I don’t want to be defined by the business”

Jennifer: Talk to me more about these feelings of self-worth tied up in the business. You see this a lot in the MSP space, I mean it’s just human nature, but you do see this a lot in the industry: We compare ourselves to other people all the time. What are they doing in MRR? How much profit do they have? How many techs do they have? What advice do you have for getting off that hamster wheel?

Andrew: At some point you’re going to have to make the decision to stop listening to everything that’s out there. I did that for like the first eight years of running my MSP, that’s what I did. I compared myself to everybody else and was trying to reach and trying to get to some place that somebody else was defining as success. And when I stopped listening to that and really decided what I wanted out of that business, and when I finally saw it, unfortunately, I wasn’t able to fully see this until I sold and didn’t have it, as to how much my self-worth was reliant on that business. And how much that changed me with the business I’m running now. I don’t want to be defined by the business that I’m running right now with my self worth. It is a product.

And I build and iterate that product, but I’m not that product. And I think the sooner an MSP can really make that differentiation that your MSP is just a product, your business is a product, it is a tool to get you where you want to go. And you’re going to iterate, you’re going to make mistakes, you’re going to change things, but what you want ultimately out of that business, there’s just so many MSPs just arbitrarily say what they want based upon what someone else is doing. And I think that the introverted tech, which I very much am and I can relate to, it’s hard to pull that. It’s hard to separate that. And it takes some time and it does take some time for people to see it. The MSPs that I’ve coached over the last few years, that’s the first thing we work on is making that separation. You are not your business. It is a tool. It is a product.

“Unlearning what people say success is”

Jennifer: What are some of the things that you do with people to help them make that separation?

Andrew: There’s a bunch of ways to tackle that. For me, the theme of this year for me is calm. And doing coaching over the last couple of years, especially COVID and now as we go post-COVID, I’ve built a framework, a nine-step framework that I run not just MSPs, other business owners through. The first three phases are just unlearning what people say success is. Unlearning what a typical business should look like. Unlearning that it’s not 9 to 5. Unlearning the fact I don’t need an office. Just unlearning all those 20th century office practices, industrial efficiency, the assembly line mentality.

Like it is totally different. The first thing I teach them to do is how to run your day. And you have to unlearn so many things that we’re taught. That I gotta hustle and I gotta grind and I got to work 90 hours a week or I’m a failure. It’s just those little things you do. I just run them through exercises so they can kind of see for themselves what they’re buying into and what they’ve accepted as truth and be able to unlearn that. And once you do that, then you can move up to now let’s build systems for where you want to go.

Jennifer: Basically Andrew’s talking about questioning all the accepted wisdom about what you have to do to run a successful MSP. You’ve got to do this, you can’t do that. And while you’re questioning how you might get to a successful business, you also need to examine what that successful business looks like.

It’s like if you were building a house and getting advice on what tools you can and shouldn’t use, what materials are appropriate, how many people should be on your crew. But you also need to define what kind of house you want to build. Some people will tell you a mansion is the only house worth building if you want to be successful. But guess what, you’re the home owner. You’re the one who’s going to live in the house. It can be whatever house you want it to be.

“Don’t let anybody tell you that you can’t do that”

Andrew: This time of year is where it gets really, you know, when you sit in peer groups of other MSPs and you sit there and make your goals, it is so arbitrary. You’re just throwing something against the wall because that’s what everybody else is doing. You need to sit down and figure out this time of year, what do I want this time next year? What do I want? And if what I want is to have a business where I make 60, $70,000 a year, but I can check out and go camping with my family two or three times a year and take a couple of months off. That’s fine. Don’t let anybody tell you that you can’t do that.

For me, it’s about setting up systems. I’m very much [an] analytical nerd that way. I think in systems better than I do goals now. I stopped doing the whole goal setting thing last year. I went a whole year with no goals. I set up systems that allow me to do things in my business that I want to be able to do. I was able to take off literally half the year, bought a new house, 100-year-old house, spent time renovating it. I was happy that I had the time to help my son through some mental health issues, but I had built the systems in place to allow me to do that, and I’m fine with that. The weird dynamic is I made just as much money last year as I did the year before. I literally did not work on my business for half a year.

And if that’s what you want for your business, like don’t let anybody tell you that you can’t do that. It’s harder to do with an MSP, I will say that. I have run multiple different types of businesses in different industries, not just tech-related. Being an MSP was the most complicated business that I’ve run to date. Like it is harder to run a lifestyle business as an MSP than it is 100 other things. I’m making more profit, pulling more out of my business now than I was as an MSP, and I’m not working nearly as much as I did before. So there’s other things you can do. But if you like the tech, like there are folks that just like that and like being a tech and don’t let anybody tell you that that’s wrong. There’s just so many at the leadership position in the MSP industry that make that unacceptable. And I think that that’s a shame. I do.

We still see it. We still see that if you’re not this, you’re a loser mentality from those upfront in the industry that have been here for a while. I think if anything, COVID’s proven that you can run an IT business remotely. That’s kind of another myth that I still see some hanging on to. I got to go back to the office. I was running 100% virtual MSP 10 years ago and people told me I was stupid. You can’t do that. And I’m like I’m doing it. That’s what I want to do. I don’t want to sit in an office and babysit. I don’t want an employee to have to sit if he’s not working on tickets and there’s no tickets, like, I don’t want him to feel like he’s got to go do something.

That’s the lifestyle that I wanted for the people working for me. And I stopped listening to everybody else who told me I had to have an office and have this corral of people and shove them in there and watch them all day and make sure that they’re being efficient. They’re being efficient, getting the job done, and that is from my clients that are telling me that. I don’t care what another MSP says. If my clients are happy and they’re continuing to write me big checks, I don’t care how you run your business. This is how I’m going to run mine. And I think there needs to be more of that. I do. I just think a lot of MSPs that want that, they want the tech. They want to have the freedom. Don’t let me or anybody else tell you can’t do it.

Jennifer: There are some pieces of advice, best practices that really are going to help your business. So people have tried other ways and learned the hard way that some things don’t really work. And so there is a way that is easier or most cost-effective or whatever and they short cut you to that. How do we distinguish between those helpful pieces of advice and the ones where we might want to question it or say no thanks, I’m going to do this my way?

“Build a business that you want”

Andrew: For me, I stopped taking advice from people that have never sat in my shoes. Somebody who’s never sold an MSP contract has no idea what it’s like to sell an MSP contract. I kind of look at the source now and I think there are some that are still selling practices from 2008, 2009, 2010. They’re still selling marketing from that era. That doesn’t work. It doesn’t work now. It is a completely different dynamic, especially for a nimble MSP.

What they have the ability to do that a $5 million MSP might not be able to do can make them a lot of money. With their personal brand and how they’re able to educate. And I think that’s where the separation that I would like to see in that smaller space is people who take that personal brand and educate people and use their unique skills and personalities. And there are some super unique stories in the MSP space, folks running businesses, and it’s hard to get them to tell their stories. But those stories will build that know, like and trust that you need to close business much better than somebody who’s still selling you campaigns from late 2000s.

I’ve been around Nigel [Moore] almost since he started the Tech Tribe. But that’s what he and I kind of very much tuned in on is the fact that he and I have made tons of mistakes, like I’ve made all the mistakes. I’ve burned through six figures plus in marketing and gurus and courses. And here’s all the mistakes that I made. Here’s what I learned. And he’s created an environment where those nimble MSPs can do just that. And that’s what I celebrate, and that’s why I’m still very much involved with the Tech Tribe because that’s what I want to see. I want to see a thousand MSPs running a business the way that they want, not how somebody else that never sold an IT service package in their life telling me how I should sell it.

And that’s what I see as very much the community aspect of building those nimble MSPs. And that’s really where I’ve seen that much different than a lot of other peer groups and kind of forums and communities that I’m still part of. That’s where I’ve seen the difference in that community. It is a very supportive community, much different than, say, some of the Facebook groups that I still belong to, where it’s very much somebody has a differing opinion and they just get shredded. I don’t want to be a part of that. I very much stay off of a lot of the Facebook groups because of that. It’s just people spewing their garbage on somebody else. That’s why I like the Tech Tribe because he doesn’t he doesn’t allow it. And he allows a community to thrive where you can have discussion, you can have differing opinions, but still do it in a respectful way where you can run your business and continue to thrive as an entrepreneur.

Jennifer: In a nutshell, here’s Andrew’s advice.

Andrew: Build a business that you want. I would say 99% of the folks in the MSP space are very much techs at heart because we love the technology, we want to help people. Don’t let anybody dictate to you what that business looks like to allow you to do that for you. And if you want to lead a lifestyle business, do it. Don’t feel like you got to be half million dollars, $1,000,000. Just figure out what’s right for you. Just kind of turn everything off now and figure out what you want and go do it.

Jennifer: That was Andrew Moon of Orange Nomad.

What did you think of today’s episode? Let us know with a review for Workflow on Apple Podcasts or send me an email at podcast@syncromsp.com. If you do leave a review, take a screenshot of it, email it to me, and I’ll send you your choice of a free Workflow or Syncro t-shirt.

And don’t forget to tell your friends about us. Until next time, this is Jennifer Tribe. Thanks for listening.

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Jennifer Tribe

Jennifer Tribe

Syncro’s director of content. Espresso-fueled Canadian nerding out over plain language, productivity, and podcasts.

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