Leading MSPs such as EasyIT have had their own sets of challenges to overcome over the past few decades as unpredictable hurdles such as COVID-19 changed the business landscape and forced IT companies to change with it. In a recent webinar, Larry Cobrin speaks with special guests Marla and Eric Hoeft with EasyIT on how they’ve weathered adversity to remain the leading MSP throughout Central Ohio.
EasyIT was founded in 1998 by Eric Hoeft and his brother Kurt who preside as co-owners today. Eric’s wife, Marla, is a financial guru and is the company’s CPA. Since its inception, EasyIT has persevered through three recessions: 9/11, the banking recession, and COVID-19. The following are the strategies the company used to overcome adversity.
Handling Small and Large Clients Differently
EasyIT has different strategies for servicing clients based on their size. Larger clients are generally MSSP, while smaller clients are more traditional outsourcing clients. The strategy for smaller companies is to pull them up and drive them to be more operationally mature. For instance, encouraging them to set standards (i.e., hiring). For larger companies that are already more mature, it is crucial to have your ducks in a row.
Diversification is Crucial to Survival
Getting in with a vertical can help you grow much quicker because they have tight referral bases. However, EasyIT learned the hard way that being in the wrong vertical can be very painful. For instance, during COVID-19, the healthcare industry is flourishing while the hospitality industry is taking a huge hit. However, you know what crisis is next and which industries will be hardest hit. This is where diversification (not putting all your eggs in one basket) is important to long-term success.
Thorough Understanding of Cash Flow
It all comes down to cash. According to Eric and Marla, keeping an eye on cash flow is vital. Understanding what your maximum risk is related to your cash flow mitigates the risk of going under due to not being able to cover operational expenses. Conducting a receivables analysis and knowing which phone calls need to be made to bring money in for services rendered is important to cash flow. If clients aren’t paying, be prepared to cut back the services you are offering until the account is up-to-date.
Forecasting and Projections
Eric admits that cash flow was an issue during the first two recessions. However, at the beginning of COVID-19, EasyIT confronted the crisis head-on with projections. They created projections for the best-case scenario and worst-case scenario. Also, a risk analysis was conducted on every client to determine the most likely effect COVID-19 would have on their business and, in turn, how it would affect EasyIT.
Fortunately, EasyIT had a great year and even took on 12 new clients and hired new team members to accommodate the growth.
Weekly Metrics Analysis
To ensure the company continues to move in the right direction, Eric analyzes various metrics, including utilization, open project hours, customer satisfaction, client retention, etc. Call abandonment was an issue discovered early on as a result of staff pivoting to working from home and failing to log into the call tree. Weekly meetings are held to discuss the metrics and where and how improvements can be made.
Monthly Financial Meetings
According to Marla, it is advisable to analyze your financials monthly, including cashflow, account receivables, balance sheet ratios, working capital ratios, etc. When managing the financials for EasyIT, she looks back over a period of time and identifies what she forecasted versus what actually happened, and looks for ways to improve. This is also great as a verification tool because you can ensure the numbers make sense.
Monthly meetings are held where the information is presented in visuals such as graphs. Visuals are easier to comprehend and understand than a spreadsheet full of numbers.
Become Part of a Peer Group
One tool EasyIT has leveraged is joining a peer group. Currently, they have been with Evolve for 9 years. Both Eric and Marla say they have received good information and valuable tools to move EasyIT forward. For instance, through the peer group, Eric discovered that the company had low margins compared to industry standards. Other group members told him if he raised his prices that it would solve his issues, and it did.
Invest in Marketing
In the beginning, Easy IT mostly relied on referrals for new clients. However, now they have an in-house marketing expert who gave the company focus and direction on marketing. They also use a third-party marketing service named Ulitstic, and just 6 months have gained traction in the digital marketing world.
Predicting how the business landscape will change next is nearly impossible. However, being prepared and ready to pivot at a moment’s notice is essential. The above strategies are how the leading MSPs are handling unforeseen changes in the industry.
Based in Columbus, Ohio, EasyIT proudly serves central Ohio and surrounding areas. Our professional team delivers custom IT solutions to fit your companies needs, no matter how big or small. Contact us today to see what we can do for you!
- 1 Insights Into How EasyIT Navigates the Changing Business Landscape
- 1.1 Background
- 1.2 Handling Small and Large Clients Differently
- 1.3 Diversification is Crucial to Survival
- 1.4 Thorough Understanding of Cash Flow
- 1.5 Forecasting and Projections
- 1.6 Weekly Metrics Analysis
- 1.7 Monthly Financial Meetings
- 1.8 Become Part of a Peer Group
- 1.9 Invest in Marketing
- 1.10 Final Thoughts