Pax8 Academy

‍

Welcome back to Harvest. I'm here today with James Davis. And I'm really excited about this chat because James is a well known figure in the MSP space and has some incredible experience ranging from helping MSPs at C level operations, HDD peer groups, being involved in PAX8 Academy, and also latterly now as Chief Strategy Officer at the, James, let me do that again, because there's too many bumbles in that one. There's too many, too many fluffs.

James Davis (Seahorse) (00:38)
Hahaha!

James Steel (00:41)
Chief strategy officer At the TSP advisory right let's try that again all right Hi everyone welcome back to this episode of harvest I'm really excited about my guest today James Davis because he has some incredible experience from the MSP space ranging from working with sea level operations HTG peer groups

some time at the PAXA Academy working in the APAC region, and now latterly is the Chief Strategy Officer at the TSP Advisory. So basically helping MSPs just like you grow and transform your business. So it's with great pleasure that I welcome you, James. How are you doing?

James Davis (Seahorse) (01:26)
thanks mate, it's pleasure to be here and I love the name so we're gonna have a fun time

James Steel (01:32)
Excellent. Yeah, we've got we've got that right at least haven't we we've got that right? We've got we've got a theme going here But before we dive into the whole MSP stuff, can I just ask you is there a Misconception that people have about you when they first meet you

James Davis (Seahorse) (01:47)
Yeah, there is. most people think I'm super detailed, cause I live this operational life, but I actually hate details. like, I like being creative and visionary. So there's always this misconception that I'm super detailed. I'm a consultant. So the connotations that come with that, but once people meet me, they realize I'm super unprofessional. I'm loose as, and I, I like to,

like to come up with new ideas and help people execute on it.

James Steel (02:19)
I love that super unprofessional. I think you're fitting well here, James. So listen then, on the MSP front, let's have a little chat. So you obviously you've worked with so many MSPs and are at the moment with the TSP advisory. So you know what good looks like. So are there any key areas among the sort of the most successful MSPs that you work with in terms of first of all, just that kind of untapped opportunity to sort of improve the business however that might be?

James Davis (Seahorse) (02:23)
Ha ha ha ha.

I think the biggest untapped thing and the common denominator around the high, high performers, they've got a clear identity and vision of where they're going. that sort of sets the scene, to drive their business forward, make a lot of decisions. And then the rest sort of follows where I find the average, the average partner out there is so focused on trying to get perfection, even though they don't know what good looks like. And so they're over-engineering everything.

They don't know who they are and they're becoming very commoditized. And like a good mate of mine said the other day, all MSPs are like zebras. They might be unique under the covers, but when you see a group of them, stand out. So I think that identity and vision piece is that really big differentiator for companies.

James Steel (03:41)
And in terms of that identity then, is there anything in particular that kind of stands out then in the identity? Is it that they know who they're serving? Is it that they have a strong marketing presence, brand image, or what is it about them?

James Davis (Seahorse) (03:55)
There's a few, a few components you touched on. of the most important pieces is that client centricity. They know who they work with, why they work with them, how they work with them. And they, and they really focus on that client, that client aspect is a key part of their identity. the other part then is that brand and not just from the marketing side of having a nice logo and a, and a shiny website is actually things like their core values that they understand their

their business model and where, and where they're going over, over time, they know who they are and probably more importantly, what they're not. Um, cause most of your average partners are generalists trying to do absolutely everything and it's just not possible. Um, and so the ones that clearly define the, the lines of where they play, um, they're a lot, they've got clarity in every decision they make and how they interact with clients who they're going after.

everything just becomes easier.

James Steel (04:57)
That's interesting. I'm guessing that probably extends to the product portfolio then, so what they're selling as well. I know every portfolio should be different really if you think about it with MSPs, but are there any commonalities in best practices that you see and that you also recommend in terms of putting together a winning portfolio? Is it Microsoft at the center? Are there any other areas that there should be focus on?

James Davis (Seahorse) (05:25)
I'm glad you bring up portfolio because I think that's a that's already a differentiator. Like if you look at out there in the, in the market, everyone talks about a stack and a portfolio is very different to a stack. A stack is very rigid. We're trying to force all our clients into that rigid vertical line of what we deliver. Um, and that might've been good in like 2010 to 2016 when we were trying to fix up all the SMBs ICT infrastructure when it was all a mess.

But now SMBs need a lot more options to actually run their business. So while we might still have a stack, it's not really a stack anymore. is like you mentioned that M365 platform is one of the key things that we provide. And in a lot of ways, that's our modern infrastructure that we're providing. And that's how the average partner treats it. So when we look at M365,

We're basically just providing them email, some file storage location and maybe some communications on top. And we're treating it very much like we're an old school MSP where the modern technology solutions partner is leveraging the M365 platform as an opportunity to not just provide that infrastructure. That's just a given everyone's on it. It's then a way to either reduce business risk for the client.

And that could be through things like Defender and Purview and things like that to provide governance risk and compliance and privacy controls for that organization. I can extend it out to leverage Power Automate, Power Platform to deliver productivity improvements, so to help increase the efficiency of the clients so they can make more profit. And then they can extend out to

enabling scaling growth. So when they start actually leveraging collaboration properly, that starts extending out things like dynamics and teams and then leveraging those kinds of tools to then empower their workforce to generate more revenue, grow, extend their market. So even just in that M365

platform you start to see it as a portfolio of solutions to actually solve business problems and Create business opportunities and as you create a portfolio That's what you should be looking at where the average partner is basically just going Copy the leader off the floor off the forums. I've got a this vague Bundle of an offering and probably the good better best model to sell as a commodity and

They're basically looking for a checklist to go What ADR do I need ADR? Do I need email security? Do I need this and this where when you're a portfolio? you're actually going into your client to understand their business and then bring them solutions and You have productized solutions and make that repeatable but a high level there's a lot more flexibility and tailoring for for the client and I think that's a huge distinction which a lot of

My partners just, it's not even on their radar. They, they're not, they can't compute it yet. That's the problem.

James Steel (08:54)
Yeah, that's really interesting. So treat me as if I'm an MSP then that's doing the, that's kind of working the old way and I'm still just selling my point solutions and I'm not really adding an awesome amount of value, but I've heard what you said. It sounds great that I should be looking at all the Microsoft suite. How would I start sort of productizing and then sort of sort of packaging in such a way that it's manageable for me to sort of get start?

get moving down that road, because I can imagine that's quite overwhelming to look at the stack and think, well, I could pretty much add a managed service on top of every single thing here. where would you recommend people start?

James Davis (Seahorse) (09:32)
First thing is actually go out and talk to your clients and understand them. That's something everyone ignores. It's like, if I point back to the statement I made just before, everyone just go jumps onto the forums and ask how much are you charging and what's in your stack? Like, why are you copying everyone? and maybe I get a bit fired up about this because our industry runs at a average of 6 % EBITDA and our

At least 25 % of the industry is break even or losing money. So why are you copying people? Like they're not doing it right. Then it's clear in the financial results. So you need to start with by actually understanding it goes back to that identity pace. Like who are your clients? they, they micro businesses, small businesses, medium businesses? Are they specific verticals? And then what are, what

Do they need now and what do they need next so that you can lead them? And this starts to shrink that, that sort of overwhelm this because you know, there's like 12 major technology category areas and all this, all this detail under them. You could spend all this time engineering this awesome portfolio, but that doesn't mean anyone's going to buy it. But that's where we do our market research. We've got an established client base that.

should trust us that's looking for us to come and understand their business and then bring them solutions. Why don't we just go out to them and ask them like what, how do you make your money? What challenges are there? What major risks you see? What trends are there in the industry that are affecting you now and that you can see into the future? Then all of a sudden you can start finding solutions. and if you boil it back and like you, there's some generic answers here.

A lot of it revolves around some basic things. And if we, we've already got some of those basic things in place because we've been doing it for a while, but we need to start changing the way that we view things. It's not that stack, it's that portfolio. So we provide, we provide end user support. We provide network management. We provide infrastructure management, provide M365 tendency management. That's every MSP does that. And then some have

added cyber security, but when we're adding cyber security, this is where we've got to separate out what's just infrastructure, hygiene, you know, that, that email security, the EDR, those basic stuff that we're treating as all this exciting stuff, isn't compared to actual compliance work. and then you start to expand out of those sort of core areas.

And if you're doing this right, you've already got a portfolio. You should already be building a portfolio around advisory and, and actually getting paid for that advice and engagement and shifting, shifting value. So it is, it is fairly complicated. This is why most partners don't do it. But once you get started, it actually becomes a lot easier than trying to create this, nebulous stack that's static.

is in a dynamic moving world that's always going to shift all the time.

James Steel (12:57)
And is there a danger there in terms of, know, sort of the way that it's charged for, obviously MSPs have been told for a long time that they must be on board with this recurring revenue model. Everything's gotta be recurring. Some of these services sound very much like if you're do some consultancy or some advisory stuff, it will be like a, perhaps a one-off project work piece. As we move towards this sort of TSP model, is it more project-based or is it a case of finding

opportunities there to build in recurring revenue, but on a sort of services basis that are layering on top of products.

James Davis (Seahorse) (13:33)
There's a whole sort of stream of opportunity for monetization and I'm glad you brought it up around the whole MRR thing has been the you need to do this as a business. Annuity revenue is always a great thing, but it's not always possible to do it straight away. It's not always the best thing for the client or even you sometimes. I contend.

with a lot of people again, our profitability shows a lot of us have just locked ourselves into very unprofitable arrangements. So is that annuity revenue actually a good thing? Sometimes I'd contend not. So when we are looking at this monetization of these different streams, it's important to think that there's actually, it's actually different components to a solution. There is that

James Steel (14:08)
Yes, yeah.

James Davis (Seahorse) (14:26)
There is that sort of advice stage in the first place and that could be a that could be just a bill by the hour retainer It could be a it could be a fixed price workshop. It could be a it could be a recurring recurring model Once you step off that advisory you start going into solution design Again, that could be fixed price could be charged by the hour Start going into building and procurement

Again, it could be like a once off project fee. could be recurring services revenue. It could be recurring product or could be one one-time product. And then you go. Yeah. Yeah. Yeah. You don't want to be completely bespoke all the time and tailored all the time. You still want to give clients certainty as much as possible because that's, that's how it becomes a lot easier to sell. But.

James Steel (15:03)
So the aim, I guess, is to try and standardize, right? So you are trying to standardize where you can.

James Davis (Seahorse) (15:23)
we've got to go through a productization phase and understanding these sort of monetization options and knowing where clients are on the solution journey, makes it starts to build the sort of building blocks towards that portfolio. And I didn't even touch on adoption, adoption work and which is like end user training and change management type activity. And then

We go to that sort of managed side, which we're used to. We're used to the end. But when you break those sort of components down, most of those components, we don't actually charge for like at least 50 % of that. We give away advice all the time for free because we don't value it. We give away solution designs for free all the time. We don't, we don't touch adoption at all, but these are all the areas that are really high value and clients want and need. So we, again, we need to change our perspective and understand.

where the clients are, what they value so we can then change.

James Steel (16:28)
Can you give us an indication of how those conversations go? So you're having that conversation with the client. So you mentioned already about getting in there and really understanding what's important to them, their business goals and so on. What's kind of good practice if you were going to sort of position some of this and you basically got to say, look, I'd to talk to you about this. We have an upfront cost in terms of the consultancy and so on. there any best practice around how to sort of frame it with the customer in terms of so they get a sense of what they can expect to pay?

James Davis (Seahorse) (16:58)
A lot of it depends where you are on your journey first. if we just assuming we're getting started, we haven't started doing this advisory and solution design stuff. We've got established clients. We, we pick, we, we're, we've already traditionally done it in the past without doing it deliberately enough. If we go into some of these warm clients and have a conversation and uncover a challenge, we can set the expectation up then of we think we can help you.

We've got an idea and a concept and we're going to have to charge for it. And everyone's in business. Everyone's fine with if there's a business problem and they will want to solve it. So then we just need to set the expectation that we are going to charge for it. And we probably need to just start by an hourly capped amount conversation of we're thinking it's going to be 20 to 30 hours. Does that sound reasonable?

And if we're getting through it in 15, 20 and going, it's taking us a lot longer, and we go back and have another conversation. It's almost like what we did 20 years ago, revisited as we're starting to rebuild this. And then we just keep doing it and we keep getting better. We're not going to have any of this perfect and our clients aren't going to assume we do either. the other way, if we're not, like if we don't have the capability,

partner with someone else that does know this sort of stuff and either learn off them or just leverage their expertise for a specific solutions area to drive that conversation, set out the pricing and then just take a clip of the ticket on top instead of trying to build and do everything which is a very typical MSP generalist attitude which we need to start avoiding.

James Steel (18:54)
Does the sales process come in here at all? Do you end up talking to customers about their sales process? Because obviously they want to got these opportunities or feeding it in and having a methodical way of kind of processing that interest and seeing it through. Do you work with some of the partners on that side of things as well?

James Davis (Seahorse) (19:13)
Yeah, I do. So a lot of it is the, you need to elevate to more of a consultative led selling approach when we start getting into that sort of portfolio management. And when we start getting into more advisory advisory, lot of the sale of the sales guys in our industry are not going to be able to sell that. It's very much an owner led thing, or it's a CTO led thing. It's it's some, it's someone with a form of authority and expertise that can just

already has a high, high trust relationship with a client and go, just pay us, pay us for 20 grand and we'll work this out for you kind of thing where salesperson needs to, needs to evolve to whatever sort of consistent methodology, whether it's challenges sales, whether it's banned, it doesn't really matter, but it's, starts to become a lot more around understanding client needs, their budgets, timelines, and having a business

business level conversations in that method rather than the traditional MSP account manager, is just an order taker. But just sitting there reactively waiting for the clients to demand something and then we'll feed that demand. And that's, seeing a lot of challenges in the industry just from that order taker mentality. It's going to be very difficult to shift from that, I think.

James Steel (20:36)
Is it you find in most cases there that you're looking at bringing on sort of new staff? Is it a case of retraining them is too difficult?

James Davis (Seahorse) (20:45)
I'd say it's probably 50 60 percent can be retrained. never gonna a lot of them are never going to get to that sort of advisor level, but they they can evolve into Being able to ask more questions be able to know when to bring that advisor level person in they can do it But there is a great many that just either don't want to don't have the capabilities Just not in a life position. Not not not motivated enough to generate money and

And that's also to do with a lot of the personality that has been hired in to be account managers. Cause I'd say a lot of account managers aren't actually account managers. They're more acting like a service delivery manager. They're just dealing with issue escalations, some contract governments type thing. They're not actually going, they're not sales driven at all. and that's a reflection of a lot of the owners and their attitudes around sales.

James Steel (21:43)
really interesting. So when you're looking at working with a new partner for example I'm curious to know James has got his face again and walk straight in and say right I'm looking for the untapped opportunities here the untapped revenue for example is there any low-hanging fruit that you see straight away I you give me some great information there already and sounded just like the overall best practices of how you should be looking at services and things but the areas that you know the chances are nine times out of ten there's going to be gaps that we should be looking at as MSPs.

James Davis (Seahorse) (22:11)
First thing I always know we're overspending on tools In an average small MSP I can pretty much walk in and save them on average about two and a half grand a month Just by them buying all these tools and not utilizing them or buying the top grade tool because they got some shiny deal at a conference but they're not using the features and stuff so almost immediately this costs

James Steel (22:25)
Right.

James Davis (Seahorse) (22:39)
costs to be saved on just those shiny tools. But from a wider business perspective, most of the time it's the real growth, even though all the MSP owners and all the other technology service business owners come to me and go, one of my biggest challenges is lead generation. It's not lead generation, it's our lack of account management practices and lack of drive to upsell and cross sell.

wider solutions of I've worked with Many partners where I've doubled their business by just focusing on their internal client base Right size their pricing So actually charging the right amount So again, we've got profitability challenges and one of the biggest things is we under Our average standard traditional managed service is usually underpriced

James Steel (23:23)
What do mean by that, James?

James Davis (Seahorse) (23:38)
where we're often operating at maybe 35 to 40 % service gross margin at most, where best practice is 50 to 55. So there's a big gap in that. And the majority of the time, owners default to, we're not efficient enough, we're not efficient enough. We can only squeeze so much blood from a stone. It's actually because we're underpriced for our labor costs to actually deliver the services. So...

We're usually 20, 30 % below that sort of premium level package. I'm not even talking like the high, the high priced packages. I'm really just talking about the difference between say an average of a hundred dollars per seat down in this region where the premium guys are charging like $130 a seat. Like that's a big difference for delivering exactly the same thing.

James Steel (24:30)
Yes, yeah.

James Davis (Seahorse) (24:33)
So yeah.

James Steel (24:33)
huge opportunity there isn't it, if you can address that

across a whole customer base that's going to make a real impact.

James Davis (Seahorse) (24:40)
Especially when most people haven't done price rises for five years plus And and all our costs just keep rising month year after year after year It that's where that squeeze comes from so even outside of any additional sales any other any other black magic voodoo I do it Often it's as simple as just raise your prices and you're much better off

James Steel (25:05)
Yeah, that's brilliant. Sometimes the simple advice is the best.

So I've actually delayed talking about AI with any other guests so far, but I'm gonna do it because I know you've got a big sort of a lot of experience with the Microsoft suite and so on. So I have to ask you about this in terms of the opportunity there that you're seeing with MSPs, I guess we're really talking about probably copilot here. What are your thoughts? So how's it going? Is it in terms of the adoption? Is there a...

Is it, should it be top of the list in terms of the potential new services and monetization opportunities and things that we talked about earlier on? Should it be right up there or is it actually in your opinion less important?

James Davis (Seahorse) (25:52)
It depends like you framed it well around going like we're just sort of talking about the co-pilot opportunity. A lot of people talk about they bring just use the AI buzzword. It's very much like the cloud cloud, what 15 years ago cloud everything. But what does that actually mean? AI is such a broad, um, technology category. There's so many different subcategories in there. Um, it's really important to clarify what.

James Steel (26:07)
Isn't it just? Yeah.

James Davis (Seahorse) (26:21)
the client means by AI and then what we mean around AI as well because you start going into robotic process automation, AI agents, chat bots, Gen. AI like you've mentioned with copilot, recommendation engines, like there's probably like 20 subcategories under AI. So that's where I often stop partners first.

And we need to really define and understand it before you can just dive into the opportunity. This is why most people are falling flat because they don't understand it all. They're just chasing a buzzword. And when you start looking at copilot, the main opportunity really is around the data governance and information management site for, copilot is sort of ready out of the box in a lot of ways.

But the data in our security group structure isn't that infrastructure again go back to some of our some of our roots. The clients also don't know around the governance side. They don't understand what they're unleashing. So they're looking for understanding of how to securely and properly utilize it in their business. And then on the other side, they're actually looking at how to get an ROI. This is what we should get.

in the technology side, we get very caught up in the risk side, but how are they going to actually leverage getting copilot licenses once they spend it? It's not a lot of money, but it also is. And so if we're properly securing it, there's a bunch of opportunity there from GRC engagement from an ongoing compliance aspect. There's uplift projects.

to set up their infrastructure in the correct way. There's the initial turning on co-pilot and then doing some adoption training. And then there's some adoption training ongoing and leveraging online training and things like that as well. So again, you've got the end-to-end client journey. But if you're having that high level advisory discussion first around what are the businesses trying to utilize it for.

how are they governing it? what privacy concerns are there? We end up just flogging a license and we missed out on this opportunity, not just to make money. Like that's a, to me, that's a symptom of delivering, a good partnership engagement with our clients. It's actually the opportunity to elevate to a, business advisor level. and, and actually have the strategic seat at the table. This is to me, the.

I've been most excited about the whole AI conversation is it's an opportunity for an entry point for partners to start talking about digital transformation and that GRC and privacy side because clients actually asking for it and if their clients aren't asking you for it they're asking someone else about it that's the red flag

James Steel (29:42)
Yeah,

yes, that needs to be covered off, but you're absolutely right. mean, it's one of those things, isn't it? It's so visible. There's such benefit, if used correctly, at the sort of the user level that it really is like a prominent technology that you can really sort of, know, people get excited about and that if you're an authority on, you know, you're really establishing a better relationship there. And you, like you say, are stepping it up to that more of an advisor role. So that makes absolute sense.

James Davis (Seahorse) (30:09)
And not many people this is a really good opportunity going back to identity and differentiating yourself The average MSP hasn't even got their head across cyber security and basic hygiene level to be brutally honest like the practices around are just Almost negligent from from a lot of partners. We've had enough time to adjust to a cyber security world now

there's this baseline frameworks and standards like the SMB 1001 is a really good example of the framework and standard. That's, that's global. It's really good for, for an SMB level, client, but so few have adopted it. so having even got their head around that, they're not even talking and understanding about AI. so if you're, if you can actually get ahead of this and elevate yourself to an advisory level.

really easy to become the expert in the space again and create a lot more opportunity. Cause like I flagged, if, if the clients aren't talking to, to their current partner about it, there's a wide open space for someone else to come in. And I'm seeing that especially down in the APAC region, there's more client churn than there ever has been in the time that I've been in this industry. There's more partner record changes on the, on the Microsoft platform.

And the majority of it is because clients want, it's not about price. Like people keep thinking, they're going somewhere cheaper. There are some that are looking for more generic services and reducing costs. The majority, like at least 60 % of the churn that I'm seeing, clients maturing out of their current partner, because their partner has become so static, so inflexible, and they're not coming to them with new solutions.

they don't understand their business and they're maturing out to other partners that can help them. And while I keep hearing a lot of people are in trouble, I see the winners, they're growing like 20, 30 % a year. The average partner is static or going backwards. and there's that bigger and bigger gap, between the haves and have nots. And it's purely down to engaging at this level and understanding what a client wants and needs and either delivering.

that solution to them directly or bringing partners in to deliver more solutions for the client. And half the time too, it's not even the clients ready to do anything. They just want a partner that they know is going to be there for the future.

James Steel (32:49)
is on the same journey. I tell you what, well, you heard it here first. That is a stark warning if ever I've heard one. That inertia loyalty that we used to rely on so much is dwindling. So that's really interesting to hear. Thank you for that. Okay, James, listen, we have a regular segment on Harvest and we call it Industry Manure. You can maybe guess where I'm going with this one. in the local tongue, what is the biggest...

crock of shit that you hear in the industry that people are banding around all the time that really binds you up.

James Davis (Seahorse) (33:25)
I could go on and on and on. where do I start? VCAO and MSP 3.0. I think a lot of, I think a lot of it, all come boils down to one thing is the, the, there's a lot of thought leadership and generic advice that still like it's 2010. It's, it's pretty much acting like, we're going to be an MSP forever. We're, we're,

James Steel (33:27)
Haha.

James Davis (Seahorse) (33:54)
Creating that rigid stack, there's a lot of lack of knowledge around where the client market is actually heading. And that just then flows through into the whole concept of like the VCO, which we never, we never actually evolved into. That's the whole advisory. don't charge for it. We've devalued it. Our account managers are the order takers and we allow that to happen as MSPs.

We keep buying into this good, better, best model, is just commodity, commodity approach that comes from selling cars. All of these to me are just driving commoditization and devaluing our, our, our industry. And for me, I want to see us a lot more professionalized. We should be treated like the financial advisors and the legal advisors and HR advisor level, level people, but our industry keeps dragging ourselves back to.

not even being traded like a tradesman. they're, they're licensed. They, they know what they're doing. They're specialized. We, keep dragging ourselves back to the past and, trying to hold onto what used to be successful. And so anything that wraps around that is the, it's the stuff that gets me riled up because that is what's, holding us back towards actually delivering what the client wants and needs. then.

what allows us to actually make a decent living and profit. And until we break that sort of mentality, lot of people are just listening to the wrong advice. And I'm not claiming I know everything and just follow everything I say. Like my whole mission is just to help elevate the industry. You take what you want and what's helpful for you and tailor it to your identity and your business. That's great. But that cookie cutter approach that gives...

keeps getting pushed down our throats like it's 2010. It's just it's useless now. It's harmful at this point.

James Steel (35:58)
I love that. think the way you frame that is beautiful because it is about elevation, isn't it? It is about making things better. It's not just a case of putting a particular method down. So thank you for that one. Our next segment is called Pass the Pitchfork. Now this is where we get a question from our previous guest. And our previous guest was Paul Green of Paul Green's MSP Marketing Edge. And he says, if you could persuade an MSP to do one thing, to invest all of their time and all of their attention in doing one thing that would

guarantee that they grew their business, they double the size of their business in a year, what would that one thing be?

James Davis (Seahorse) (36:35)
That's an awesome question. Understand the finances. It's as simple as that. You're not going to grow and make money if you don't actually understand the levers of a technology services business. And you're not going to make a profit if you're not looking at your numbers on a regular basis.

Making profit is okay. I give you permission to make profit. We're in business. If we're not making a profit, it's hard for us to invest and deliver high quality client outcomes. And from that basic understanding, I'll give you a really quick rundown of what I do even in really large businesses that I work with. All I do is look at how much revenue we're making. What's our gross profit? So the gross profit is your...

cost of the product sold, your service delivery, labor costs, and then the hard costs, are all your tool costs that you leverage to deliver those services. What's that gross profit? And then what's our operating expenses as a total percent of revenue? So operating expenses is all our costs of running a business. It's sales, general and administrative costs. And basically I'm looking at, we running around 50 % overall gross profit?

Are we spending less than 32 % on operating expenses? And then we generate, uh, best best practice profitability. There's a lot more nuance and detail that can go under, but like even that simple view straight away gives you a picture of where to focus on. And that's how you grow your business.

James Steel (38:22)
I love that.

Yeah, that's so important. Great answer. James, have you got a question for our next guest? Could be an MSP, could be an industry expert. Feel free to make it a tricky one.

James Davis (Seahorse) (38:37)
I, I'm very curious, um, as I've been talking about, um, whole technology solutions, partner concept for so long. want to know what, what the next guest sees as the real client demand. What are, what are they really looking for and how, how do we truly understand and spend our focus on, uh, creating our business in a more client centric way.

James Steel (39:08)
Good question. Good question. That's gonna have them scratching heads, I think, to begin with.

James, thanks so much. Listen, it's been awesome chatting to you. You've given me loads of tactical stuff that we can take, put our own spin on, implement in our business tomorrow. And that was the most important part of this. Would you like to do a yell from the barn? So a quick shout out and let us know where you'd like eyeballs, ears pointing in regards to what you're up to these days and any offers you'd like to share with us.

James Davis (Seahorse) (39:41)
Just follow me on LinkedIn. You can get sick of seeing my face all day every day. I share a whole bunch of different topic areas and resources on that. So best place to find me is on LinkedIn.

James Steel (39:57)
and you've just started a new gig at TSP Advisory, I feel like you have to give it more of big up than that.

James Davis (Seahorse) (40:02)
it's not about me. It's about the partners. I'm, I'm the TSP advisory. I founded to engage with those leading edge partners that are transforming themselves for the next decade ahead. So pretty much I just, I have a seat as a fractional chief strategy officer as a, as a role inside their team, or I sit externally as a, as a strategy advisor. And basically all I do is.

help share these market insights that I know from working with hundreds of partners over the years and help them really articulate their identity and their vision and then help them turn that into a strategy and a plan and then help guide and mentor the leaders in those businesses to execute that. And over the years, I've built all this huge partner resource library. So I help them fast track initiatives so we're not

reinventing the wheel. And I get to do that all day, every day while, while trying to share thought leadership from working with those kinds of partners to help everyone else that I can't directly help.

James Steel (41:15)
It's a truly worthwhile cause and you're in a great place to be doing it and I'm sure you're sure it's a service that's Massively appreciated by the MSP community. So thank you once again for joining me on harvest. Hopefully we can have you back There's honestly such a we could have gone down so many different areas with with the conversation But it's been great chatting to you and hopefully we'll see you soon. Wish you all the best

James Davis (Seahorse) (41:36)
Thanks for having me mate, it's been great fun.

James Steel (41:39)
Cheers, James.

James Davis (Seahorse) (41:41)
Thanks a lot.

‍