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MSP owner versus Employee Mindest

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Through years of reviewing pitches to angel investors, conducting due diligence, and building I have seen how some people are good at building businesses. And others, aren’t.

So why the difference? If on average 90% of businesses fail, why do some people create business after business that succeeds?

What I have learned is that this is a mindset problem. There are many reasons why businesses fail, but the reason why some people succeed repeatedly while others struggle comes down to mindset. To succeed in running your own business you MUST develop an MSP ownership mindset.

What is an MSP ownership mindset? A mindset is a way of thinking about and perceiving the world. Too often we define it in terms of actions or physical characteristics such as strength, accountability, and hustle. But that is wrong: an MSP ownership mindset is the mental ability to see yourself as an MSP owner, not a worker or a freelancer, but an MSP owner.

It is the perspective of the MSP owner that will eventually enable you to build a business that works for you rather than you working for it.

The problem of NOT having the right mindset

You start a business, and you work hard at delivering on that business. You reach out to new clients and create work for yourself that you execute, often very well. 

However, delivery becomes a chore. It ends up being a lot of work, and the more you want to earn, the more you want to grow, the more work falls on your shoulders.

There seems to be a direct relationship between how hard you work and how much you earn. 

There are only so many hours in a day and days in a year, so your potential is limited.  And you end up trapped working ever harder to eke out a living.

You become a slave to the business. 

The alternative is to run a business that delivers results, money, income, and freedom to YOU. You can do that, but it requires thinking differently about your business, it requires a mindset shift.

The first step to doing this is creating a mindset shift. 

What is mindset

Mindset is how you view the world and approach your business. 

Think of mindset as a lens you look through. If you look through a red lens, the world you see looks red. If you look through a blue lens, the world looks blue. 

Similarly, your mindset tints the world around you and frames how you see, address and tackle the problems around you. 

This mindset tool is based on Robert Kiyosaki’s Cash Flow Quadrant, which he presented in his book “Rich Dad, Poor Dad.” He applies it to thinking about your life and finances, but it also maps perfectly to life as an MSP owner.

The four mindsets

There are four different employment/MSP owner mindsets:

  • Employee,
  • Self-employed
  • Business owner
  • Investor

Which I arrange in four quadrants:

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I think of the x-axis as the employment to MSP owner axis, where you start with employment and move toward thinking like an MSP owner.

The y-axis is the level of independence.

Most people start out as employees, which is the most dependent mindset. The next step is often to self-employed, which is another type of employment but is significantly more independent.

The next step is the leap to true MSP ownership thinking where you become a business owner. You remain dependent on funding, clients, and the world around you but you build your business as an MSP owner.

The final level is investor, where you bring an MSP ownership mindset to others. Investors are much more independent since they are not relying on one business or one way of thinking but are applying MSP ownership thinking across a range of opportunities.

Note that when I talk about “mindset” I am NOT talking about a way of being. I am not saying that you should be dedicated, accountable or that you should take charge and lean in.

All of that may be true, but “mindset” is a higher level than that, it is a perspective, it is how you think about and approach the opportunity that matters.

Below I go through each one of these.

The employee mindset

Almost everyone begins to approach business with an employee mindset. Generally, our first introduction to business is getting a job. My first job was at a pizza restaurant. I went into the restaurant, ordered my personal pizza and asked for an application.

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A week later I was an employee. I had entered the business world.

As an employee, your boss sets the agenda. He or she is ultimately accountable, and you deliver according to his or her needs or the plan that he or she sets forth.  They tell you what pizza to make, you make it.

Growth in any organization means taking increasing levels of responsibility but always within the employee mindset. I might progress from pizza maker to overseer of pizza makers, but it is still within the structure set by the business.

Managers in an organization still approach their work with an employee mindset. They set the agenda for those working for them, but do so within the constraints set by their boss. 

Often even the executive leaders, even the CEO, of a company view their role from an employee mindset – they see themselves as a part of the company, serving the company’s interests.

This mindset constraint is one reason why reinvention, innovation, and meeting future challenges are so tricky for executives.  They struggle to solve real-world problems and real-world threats to their business because they only innovate within the structure of the business.

Employees are not looking forward and inventing; they let the “company” set the parameters for success and failure.

This is is also why executives often fail is they leap to MSP ownership. They are great employees, but they don’t have the capability to think like an MSP owner.

There is nothing wrong with having an employee mindset, but you cannot approach building a business from this perspective.

The self-employed mindset

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When a person leaves a corporation or that first job to launch their own business, they almost always adopt a self-employed mindset. 

This is a shift from being an employee because this is the moment when you break from being a part of a company, you become “your own boss.”

But, what happens is that you are now both boss and employee.

When you look at the world with a self-employed mindset, you take on the agenda-setting work of the boss, but you continue to be responsible for execution. 

Most freelancers are here and many people are happy here. However, many find that this becomes unstable. They are either swamped with way too much to do or panicked because they don’t have enough. 

Your time horizon expands to maybe a year rather than weeks or months, but you are still very much focused on the work and delivering projects for somebody else.

Self-employment can be very limiting because there are only so many hours in the day. So if you approach your business with a self-employed mindset, you quickly run out of capacity and have no way to scale your business. 

Back to the pizza restaurant

In real life, I quickly left the pizza business, but if I had continued the next step would have been to become an expert in making pizzas. Perhaps people would travel from afar to eat my pizza.

So I’d end up starting my own pizza restaurant.

Owning my own place, I’d be independent but I would still be making pizzas. Day and night I’d make pizzas. My pizzas would be great, but now I’d also have to think about all of the other aspects of running a business.

When you have a self-employed mindset you do it all. You have a job and you work hard at that job. Sometimes the rewards are worth it, but it is still a job.

The big shift is to the business owner mindset.

The change from self-employed to a business owner is the critical mindset shift of the MSP ownership journey.

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When you look at your business as a business owner, you solve business owner problems. You think about the future, you plan for what is coming next, and you set the agenda. 

Instead of doing all of the work yourself, you begin to delegate work. You design the systems and coordinate others to do the job.

You start to ask who could do the work, rather than doing it yourself. You teach others to make pizza, you might even look for others who are better at making pizza than you are.

You are responsible for the performance of the company. Importantly though you now see the business as a system you manage rather than a job you do.

You find the people to deliver and manage the system that executes. 

The pizza restaurant takes on a life of its own

Moving from making pizzas to having other people make the pizzas is the hardest transition to make. I would have to get out of the kitchen and let others do the work.

I would put my expertise to work finding people who can make pizza and You don’t do all of the work. Instead, you manage others to do the work. You design the systems you create plans and you have a team of installers. Your focus is on managing them and managing the system that ensures you will continue to have many fireplaces to install. 

The final mindset shift: you become the investor.

An investor looks at a business as a money multiplying machine. You put money in, and you get money out. You can put money in a variety of machines to get a high return. 

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Your role might be the founder and CEO of multiple companies.

Investors hire people to run their businesses and deliver the returns. They think of the future and other investment opportunities, they are always looking for a new way to invest and make money. 

The key here is the allocation of capital, and the investor should always be asking if the allocation is right, and the investment pays off well enough. 

So you start to think about moving out of fireplaces…

When it comes to installing fireplaces, the investor thinks about whether or not installing fireplaces is the right thing to be working on. Are wood-burning fireplaces giving way to gas fireplaces? 

Should you perhaps branch out into something else? 

Alternatively, perhaps there are complementary products that go well with fireplaces that you should be investing in or offering. 

What mindset do you need? 

The key to mindset is first to understand the concept, then start analyzing how you can shift it to look at problems through the different mindset lenses. 

As an MSP owner, you must be able to understand all mindsets. You should work on building the flexibility to see things through one mindset frame or another, which will give you access to new ways of problem-solving. 

However, you also want to push yourself toward the business owner, and investor mindset. If you’re going to grow, scale, and build your business, you MUST be able to approach problems from these perspectives. 

We often find that this is the hardest shift to make. However, it can be learned, and you can master it. 

Read more about the 7 MSP ownership mindset shifts here.

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