I'm breaking down why hiring traditional salespeople can actually stall your MSP's growth in 2025, and sharing the component-based system approach that hundreds of successful MSPs use instead.

Learn how to avoid expensive hiring mistakes and build scalable sales processes that don't create key-man risk in your business

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Welcome to Repeatable Revenue, hosted by strategic growth advisor , Ray J. Green.

About Ray:

→ Former Managing Director of National Small & Midsize Business at the U.S. Chamber of Commerce, where he doubled revenue per sale in fundraising, led the first increase in SMB membership, co-built a national Mid-Market sales channel, and more.

→ Former CEO operator for several investor groups where he led turnarounds of recently acquired small businesses.

→ Current founder of MSP Sales Partners, where we currently help IT companies scale sales: www.MSPSalesPartners.com

→ Current Sales & Sales Management Expert in Residence at the world’s largest IT business mastermind.

→ Current Managing Partner of Repeatable Revenue Ventures, where we scale B2B companies we have equity in: www.RayJGreen.com

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Speaker 1

Speaker 1

I've seen what hasn't. And probably more importantly, I've seen why using a lot of the traditional stuff that's out there that's used for for other industries, things like that just doesn't move the needle for, for you, for for MSP. And in this video, what I'm going to do is break down why hiring salespeople can actually stall your growth.

Speaker 1

That can be dangerous for for your MSP growth and what you should be doing instead, so that you don't waste months or more of your time, or thousands or more of your money on approaches that actually end up hurting your business. Now, there's two really common risks that I see with hiring salespeople that people don't talk about a lot.

Speaker 1

And it's because as entrepreneurs, as a business owner, you're probably fairly optimistic about something, right? Like you. Otherwise you wouldn't be doing what you're doing. We had to be optimistic to to be entrepreneurs a little bit. So we we make the bet that we're going to hire a salesperson and we see the top line growth. We're kind of like, yeah, we'll bring somebody on that can close one deal a month, two deals a month.

Speaker 1

It'll be X amount. And revenue like this is going to be a solid investment. And what we don't necessarily do is think through what are some of the risks that I'm going to to be taking when I do this. Right. And, and the two that people don't talk about very often are one, hiring the wrong person. Right. Like hiring somebody that doesn't get results.

Speaker 1

Why is that such a risk for you? Well, because think about your sales cycle. Your sales cycle is probably at least a couple of months. I've seen some MSPs who are targeting larger companies with sales cycles that are longer than a year. If you have somebody start tomorrow, let's assume that they're going to need some ramp up. They're going to have to do some training.

Speaker 1

They got to learn the company, the plans, the offers. You know, maybe even if they're there from another MSP, they've got a book of business, but they've still got to learn the ropes, right? Like they've got to learn your systems. They got to learn your networking events. Anything that you're doing to generate leads, all that stuff. So it's going to take 30, 60 days to to ramp up.

Speaker 1

And if you even have a two month sales cycle, you can't expect them to to be at full pipeline. Right. Like right away. So you know, you're not going to see any deals for, you know, potentially four months, five months. And at that point they're going to be ramping up and you're not going to have full production. So it may be six months before you look at it and go, hey, I've got definitive data that this person is not closing deals.

Speaker 1

I mean, there's some flags along the way and I'm sure there's some indicators that you can see. But I mean, in terms of what you can expect for them to be at full production, you are a ways down now. By the time that's come you've invested a decent amount of money in a salary, you've potentially burned a number of opportunities.

Speaker 1

The deals that they did go on, the discoveries that they met with, the proposals that they delivered and probably more importantly, the just in general opportunity cost that you've had along the way, the distraction to you, you probably did some training. You probably got some preparation going, like there were things that you were doing as you were getting them ramped up.

Speaker 1

So you're six months and you're now not closing deals. So that's a huge consequence. You've now made investments in the salary. You've now potentially burned some opportunities and you've lost some, you know, some focus and some energy and had some distractions. And you don't get that time back when you really do the math. On a misfire with hiring a salesperson.

Speaker 1

It is incredibly expensive. And that's if you make the call relatively quickly. Like, I actually met with an MSP recently who said, we were about to do an audit and we were, you know, doing one of the the initial calls. And I said, okay, so tell me about your salesperson. Like, you know, how many deals have they closed in the last 12 months?

Speaker 1

And they said, well, you know, new deals and yeah, new deals like, you know, I haven't actually had any, any deals closed in the last 12 months. I said, okay, when is the last time this person closed a new deal? Well, it was about two and a half years ago. Ray in my face. Sorry, I said, and he said.

Speaker 1

I know, he said, I know, I like I hear myself saying it out loud and I know, but I, I kept thinking, hey, well, there's some of these things in the pipeline and I just didn't want to fire them right before some of these deals fell through. And I didn't necessarily know what to do with the stuff that was in the pipeline.

Speaker 1

And so I stopped by holding on to them. You know, a little bit longer. We might be able to see some results. And, and it just never really panned out. And which is incredibly common usually like when, you know, when you start to see the indicators, it's usually not like a, hey, you're completely wrong. It's a grand slam, but do the math on that.

Speaker 1

And of course, all of the opportunities that could have been closed by somebody that's a great performer during that time and the investment that you've made and the last time you go down, that's why it's dangerous. Okay. So that's that's one of the risks. The other risk is actually the opposite of that. And it's when you hire somebody who is capable of doing prospecting, they are capable of running discovery, they are capable of closing deals, and they are what I call full cycle.

Speaker 1

Right. Like they come in and they are they're able to do all of those things and move deals through the pipeline, get them closed. And you initially think, well, hey, what the hell's wrong with that? That's awesome. That's exactly what we want. Well, the challenges somebody that's full cycle like that and really good at doing all of those.

Speaker 1

Like it's kind of a unicorn, right? Like the number of people who are really good at prospecting, really good at running discovery, really good at closing deals is is few and far between. There's a couple of challenges that come up with that. Big ones to to your business. One of which is, hey, even if you can get one person to do that, you know, it's really tough to get five, right?

Speaker 1

So if you want to grow beyond just this next stage of growth, you bring somebody in. They own that whole process, but now you potentially lose control of that process because they're running in the way that they run legit. And, you know, they're running discovery the way that they run discovery, their closing deals, the way that they closed deals.

Speaker 1

And you want to bring somebody else in to do that. They may say, well, you know, I got this and I've seen this. Like we actually work with a company recently. You had a great salesperson, had great numbers. He had tried to bring somebody else in to shadow, like, hey, we're ready to grow to the next level. And he said, and he got, you know, a little territorial.

Speaker 1

Okay, well, how about we hire an SDR to start making some calls for, you know, I've got this part of the process, right? Like, I don't I don't need any help on that. Let's hire somebody else to do full cycle. Well, had trouble finding somebody to also run full cycle. But then like I told him, even if you get somebody else, I can run full cycle, the likelihood that they're going to be running the same process, that that person is few and far between.

Speaker 1

So what you end up doing is stalling your growth. First of all, when you hire a unicorn, you stall your growth because duplicating unicorns is really damn hard if it's possible at all. The other thing that happens is you lose control over the most important function in your business, or at least in my view, the most important function in your business, which is the ability to go get new clients.

Speaker 1

Cash is oxygen in your business like you have to have it in order to survive. And if you don't have the ability to go get clients on your own, using your own systems, your own processes, that's a pretty vulnerable position to be in. Well, if you've now brought somebody in who now owns all of that stuff and you don't have full insight into it, and they're not running your playbooks and they're not running your processes and they're not running your systems.

Speaker 1

Is it really yours? Right. Like you again, you've lost control of it. And that's a really vulnerable position to be it. Like a lot of business owners can be held hostage by one phenomenal unicorn level sales person who at least the first year or 2 or 3, four like this felt like, oh my gosh, this is awesome. Like this is like, we are killing it.

Speaker 1

This is great. And then when they wanted to fire that person, they couldn't because they owned the whole damn thing. When they wanted to duplicate that person or bring other people in, they couldn't. And what they find later on is, you know, one of the big consequences here is the valuation of your company. When you have one person that kind of owns a lot of really important functions, it's called common risk.

Speaker 1

They still work with private equity. I ran turnarounds for investor groups, so I know this. I've seen how they go in and they value the business. And what they do is they say, well, this person owns all of these functions. So the value of that business is now lower than it would have been before because it's it's vulnerable.

Speaker 1

It's dangerous if that person goes somewhere, if that person doesn't make the transition. And that's a less valuable business. Right. Well a lot of times it's the owner that's the key man risk. But if the owner hire somebody else to be the key man, it's still the same outcome. The business is still considered less valuable. So when you bring somebody in to own all of those things feels great at first, and then what you learn later is you can kind of be held hostage by the salesperson that came in and helped you grow your business, and that's not a place that you want to be.

Speaker 1

One of the things that causes this, like from from my experience, is what I call like the 10% mindset versus the ten mindset, okay? And the 10% mindset is, hey, you know what? We need to close a couple more deals a month, right? Like we are at 5 million a year. We want to get to 6 million a year or something like that.

Speaker 1

We want to we want to grow. But we're not thinking in terms of 20 mil, right? Like we're actually thinking of just the next little bump, right? The negative way break through this, this little level here. But I'm not necessarily going to think in terms of systems. I'm not going to necessarily think in terms of scalability like those things are they take you know, they take longer, they're harder set up.

Speaker 1

They they aren't going to get me the 10% bump in sales that I want right now. So what do I do? I take I take some shortcuts on on hiring. I hire maybe somebody that isn't fully vetted or I kind of rush the process, or I kind of ignore some red flags, or I kind of lower the standards on the requirements or the experience that I'm looking for or whatever it is.

Speaker 1

And I just, I hire somebody, I try to get them in and rushing through the process, and that results in somebody that's not a good hire. Right? Like so it's a misfire on the sales, or I see somebody that's capable of running the whole damn thing. And I get really excited because I'm like, as a business owner, sweet.

Speaker 1

I'm going to get to remove myself from the sales process, and I bring them in and don't necessarily think in terms of systems, don't think in terms of duplication. I only think in terms of the next step not reaching the top of the flight of stairs, like the next step, and bring that person in. And then I've got like this unicorn and I've got the key man risk, and I've lost some of the control in my own business.

Speaker 1

The flip side to that right, instead of the 10% mindset, is what I like to think of or what I like to think in, which is the ten x mindset. How am I going to duplicate this? How am I going to scale this whether I need to scale it or not? Like I don't have to be trying to build a $100 million MSP in order to think in terms of systems, because the systems are actually going to help reduce risk, they're going to help increase consistency.

Speaker 1

They're going to help me improve the insights that I have, the transparency, the KPIs, like everything is better when you think in terms of systems when it comes to sales and growth. So ten X says, how do we build the process, how do we build the system, and how do we build the asset within the business and then find the right person to fill the specific role?

Speaker 1

That's kind of like a it's like an investor mindset, right? Like if you think about growing your business the way that an investor would think about growing your business, they would think the same way they would say, hey, you're taking some risks when you're thinking with a short term 10% mindset, right? Like you're sacrificing some of the quality potentially with the hires that you're making, which we which we've talked about, you're bringing in potentially the wrong person.

Speaker 1

That's going to have some long term consequences. Why don't we think in terms of what's going to increase the value of this business long term? And again, you don't have to be building $100 million mSRP to do this. And you don't even have to want to sell your business to do this, because think about it like getting your house ready to sell, right?

Speaker 1

I don't know if you've ever gone through this. You know, you go through the process and you're like getting ready to sell. You lived in this house for ten years, but right when you're about to sell it, you're like, hey, you know, we need to fix this and we need to paint that. We need to, you know, improve this, and we need to replace the windows.

Speaker 1

And we got to like, do and by the time you're done, you're like, hey, this is how I like the house more, right? Like I've done this and I've thought, you know, we shouldn't wait to make all the improvements to the house until we're going to sell it, but why not enjoy the improvements as you do? It's the same thing in your business.

Speaker 1

You don't want to wait until you're ready to sell the business to make all the improvements, because there are benefits to the systems and the scalability that you have in your business in the day to day management. So when you think like an investor, you're thinking, I want to build the asset right in the business, not the individual.

Speaker 1

Like the individual is not the asset. How do I build a sales system that is going to help me achieve my goals? It's going to help me grow my MSP to the level that I want, while also reducing risk. Now, personally, the way I approach that is I break the sale system down into components. Okay, I break it down into components because when you have components, you have a system that's easier to to manage, easier to replace, easier to optimize.

Speaker 1

And here's what I mean. Instead of hiring one person that's capable of prospecting, that's capable of closing, that's capable of doing all of it, what I want to do and some people have and have them do an account management afterwards, like so you're talking prospecting, closing account management instead of having somebody do all of that. We don't want that for a number of reasons.

Speaker 1

One, very hard to find those people to the likelihood that they're good at all of those things really low, like even unicorns, like if you actually break it down into the components, they really excel in one area more than another area. When you break it down into components, let's just call it those three components. What you would do is you'd say, all right, we want somebody to do prospecting.

Speaker 1

We want somebody to do closing. We want somebody to do account management. So to do prospecting, what I'm going to do is I'm going to go hire an SDR or BTR to do some outbound outreach or something like that. Then when they start setting appointments, generating traffic, I'm getting demand in the door. I'm going to hire closer somebody that can take that initial call and then move it through discovery, move it through the assessment, move it through the closing process that can actually get the deal closed.

Speaker 1

And then I'm going to hire an account manager and that person is going to take the account once it's closed and they're going to manage it and continue to monetize it. Now we've got that into three roles. Now why is that more effective? Well, first of all, when one of those parts breaks, it's replaceable. It's not like holy shit.

Speaker 1

Like one person leaves, the whole thing falls apart. Like that's the challenge with key risk aside from the investors, it's like if that person leaves while you're there, that's even worse. You've reduced risk. You've made it easier to replace by breaking it down into its components. The other thing is it's easier to hire for. I can find somebody to prospect easier than I can find somebody to prospect, close and manage accounts.

Speaker 1

I can find somebody to manage accounts easier than I can find somebody to prospect close and manage accounts. The third thing is you're going to find somebody that's good at that thing. All three components are going to be optimized, which is going to help fuel the growth in your business. Now here's the kicker. Once you have all those things done, you're not only going to experience more growth, which is going to fund the three roles.

Speaker 1

You're going to have a more valuable asset. You're going to have lower risk. You're going to have better predictability. You're going to have more insight and transparency into your business. And that is all around good for you. Okay. Now there is one risk that I will tell you when you're when you're going through this process. So this is a there's a really important one when it comes to hiring with sales for MSPs, a lot of times I see people who go into this with with optimism.

Speaker 1

The first hire doesn't work out right, like they break it down into components. Let's say they do this, then they go to hire that first SDR and it doesn't work out, you know, and they're like, hey, you know, I tried that before and just it just doesn't work for us. And then I go, okay. Like how how long can you stick with that strategy?

Speaker 1

Well, you know what I mean. We, we hired and we looked pretty hard for that person. But they, you know, they just they just didn't cut it out like, that doesn't work for us. There's something that Seth Godin calls the dip and the dip. I actually have a video on it. The dip is okay. It's when you go into an initiative, you go in with optimism.

Speaker 1

You go in with like, hey, this is going to work. You see the upside? And like my buddy said, he hired an SDR or sales person and they're crushing it. So I'm going to go do the same thing. So I go hire my SDR. That person doesn't show up to work on the first day and I go, well, shit like this doesn't work for me.

Speaker 1

Well, that's because what happens on the dip is you go in with the optimism and then you realize all of the challenges that are going to happen, which are completely natural, completely normal. It's part of the process. But nobody told you about that. Like your buddy with the great salesperson of the great SDR didn't say, well, you know, actually, before this worked out, we went through three stars.

Speaker 1

We did this. We had to rebuild our training program. We had to increase the, the OT, the, the, the earnings for the for the SDR. We had to, you know, fix some of the lead things, like you only see the end, right. Like you see the finish line you see after they've gone through this thing, they go in with starry eyes.

Speaker 1

They experience the initial frustration or friction that happens and they quit. And it's incredibly dangerous. One thing that I would just advise, like as you're going into this, if you're going to hire salespeople for your MSP, go in and expect it not to necessarily work right away. Expect that there's going to be a learning curve. Expect that you may have to go through 1 or 2 people, like one of my mentors, when I was when I was starting sales management said, hey, listen, like if you if you bat 500, you go to the Hall of Fame like you're going to you're going to crush it if you can bat 500.

Speaker 1

And I'd like to think we can do better than 500, but if you just have that expectation, you know, I'm not going to give up on the strategy. Right? Like the strategy if I'm going to hire, let's say the SDR, we break into components, we're going to hire the SDR. I'm going to make this work because I know it can work.

Speaker 1

How do I know it can work? Because hundreds or thousands of other MSPs are doing this successfully right now. It's just a matter of there's something I've got to learn. There's a few things that I've got to experiment with. There's, you know, some advice that I've got to get from somebody. Like there's some things that I've got to figure out to make it work, but it will work.

Speaker 1

So I'm going to go in committed to making it work. I'm going to go in with the expectation that there will be a dip in that process. I'm going to push through the dip because everybody else quits, right. And that's why that's why there aren't more eight and nine figure MSPs. Everybody else quit on these growth initiatives. They quit in the dip.

Speaker 1

And by the way, that's great news for you because everybody else quitting means less competition. Right. But you're going to go in with the expectation, you're going to push through it and you're going to get to the other side. And that's where you're going to experience the real ROI, the real benefits of all these things. And that is actually if I could give one piece of advice on broadly as you grow your MSP, recognizing the dip with every single initiative is actually really, really essential.

Speaker 1

And that means starting paid ads. If you're starting, if you're hiring, whatever that is, there's always going to be a component where you're learning through things and you've got to push through it. And hiring salespeople, absolutely no different building systems, absolutely no different. Breaking down that process into three components. Same exact thing. So this video just cover some of the higher level strategies that I've developed in working with MSPs and in the space.

Speaker 1

And of course, there are things that that we couldn't cover here, like the exact step by step blueprint that we use to help MSPs build scalable sales systems. So if you want to get your hands on that and want to see if you'd be a good fit to potentially work with us, just click the first link in the description below and you can look up a call with me or somebody on my team, and see if we can help you build a sale system that actually works for you.

Speaker 1

Adios.