EP235 - Budget Like A Boss
with Clare Elliott and Ian Luckett

Ian Luckett: In this episode of the IT Experts Podcast, we're gonna help you budget like a boss.

Welcome to the IT Experts podcast, the only podcast to help MSPs scale to 1 million, and if already there, get to five and go fast at the end of the day, isn't it all about building a business that works for you rather than you for it? I hope you enjoy the show.

Good morning, good afternoon, good evening. Welcome to the IT Experts podcast. Today we've got another exciting podcast for you all about finance. How exciting is this gonna be? But the thing that's make it really exciting is we've got our incredible finance coach Claire in the house today. Good morning, Claire.
How are you doing today?
Clare Elliott: Good morning, Ian. I'm very well, thank you. How are you?
Ian Luckett: I'm good. I'm all good. Thanks. And today we we're gonna, you need to listen up. You need to put your big and girl boy pants on for this one because. We are gonna help you to understand how and why budgeting, forecasting, and cashflow.
And don't turn off like 'cause you're bored, right? 'cause this is the window to your business. This is the most important, probably one of the most important podcasts you need to listen to. The gold nuggets that Claire has got for you today will help you. Build an amazing, incredible, profitable MSP one that's gonna be worth some value.
One that's gonna be fun to run, right? One that you're gonna enjoy the profits. 'cause that's why we're all here, right? We're all here for business's sake. We're gonna, we're gonna, we're gonna help you to just really crystallize why these things are so important, and more importantly, why the most successful MSPs do this.
The outcomes they get from doing this process. So anyway, before we get into the the nuts and bolts, Claire, please explain who are you, what do you do, and who'd you help?
Clare Elliott: Yeah, I'm Claire. So I'm the finance coach for the MSP Hub, so I am a chartered accountant. Been working in finance for all my life, really, to be honest, and worked with many businesses.
Had our own business as well. Yeah, and then work with businesses within the hub, answering questions, helping with their finances, helping them to create reports and interpret the numbers and do some forward planning with them as well.
Ian Luckett: And we have a bit of fun, don't we? Because
Clare Elliott: we do have fun. Yeah, because finance is funny, isn't
Ian Luckett: it?
It's, and sometimes it can be, sometimes it can be a little bit of a dry subject. And Stuart's actually just recently run a bit of a bootcamp and he was worried about it. And it's actually one of the, one of the, one of the, one of the sessions that we had the best feedback on was like, oh my God, that really opened my eyes.
It wasn't about the sales and the marketing and the team and the things that you want. It's like the finances. So why are we talking today? The reason that we're talking today is taking. The previous podcast we've done, which is understanding your numbers and understanding, knowing your numbers and all of that stuff is a great term.
That's a bit generic, isn't it? And what we're gonna go into today is a bit more of the detail, a bit more of the advanced detail on budgeting and forecasting, and why this is so important. It's critical, is actually essential. I think we'll just upgrade that in, in three words, Claire. Why is this such a, why is this such a thing that gets overlooked so many times?
The whole budgeting, the next level of understanding what's in the bank and the cashflow. This is the next level, isn't it?
Clare Elliott: Yeah, it is. And it gets overlooked because it's difficult, it's actually time consuming and it's challenging to do and it's really confronting as well. Yeah. Um, so I know we were speaking about this earlier, that it's easier to bury your head in the sand with the numbers because it's hard and it confronting and it's.
When there's lots, ofs, lots of cash, everyone's excited by that. But actually even then, they still don't wanna the detail, they just want the final number. Everyone just wants the number to be amazing. So forecasting is hard. It's hard, and it's very confronting, but. It's important because it gives you the clarity, it gives you control over your business, and you can make decisions.
You can make better decisions, quicker decisions, because I'm sure this resonates with most people out there. You get asked for decision on something and you are nervous to give the.
What you should say, you are really just risking it. You are really just having a bit of a guess, but this gives you that clarity to make better decisions. They might not always be perfect, but at least you've got more confidence in making that decision to move forward. You've got that forward planning and you know where you're going to be, so this time next year you know that this is what you are going to achieve rather than just.
Carry on through the year, day by day, week by week, month by month. And then think, okay, this is where I've ended up. No, what you want to know is this time next year, this is where I'm going to end up. Yeah, yeah. And then I will be able to do this. I will be able to do something different.
Ian Luckett: And so yeah, it just
Clare Elliott: gives you that, that clarity, that confidence within your business and
Ian Luckett: that, and that's the word I was looking.
I was just about to say it as soon as you finish talking there. Confidence. Yeah. It's all around being confident in those numbers. I like many have stopped tracking my investments and ices of late 'cause of where they're invested and some nights wanting to go home and potentially cry. And I just sat down there in the last couple of weeks 'cause there a certain thing that's going on with an orange man in, in the wrong side of the, on the other side of the world.
And, and I went, hang on a minute, let's just actually, and it's just the first thing, this is like. When you're just talking about burying your head in the sand for years, and many of you will appreciate this, but I've, I've, I've turned the half century a couple of years ago, and when you do that, all of a sudden things happen and things change financially.
'cause all of a sudden, it doesn't mean that you're gonna get a mortgage, it just means it's gonna be a bit more selective. And it's like when you're in your thirties and forties, it was always a given. And now there's people who start worrying about your risk. And the pension's gonna be all right 'cause we've got the pension, we've got a couple of other things going on, so that's all fine.
And for years and years I've gone, we've got the pensions, we've got the other things, we've got a couple, it's all going on. And I sat down there and I just thought, yeah, but hang on a minute. I knew there's some economic turmoil going on. Which could or could not affect it. And my son is just, bless him, he's 27 and he's so into his finance.
It's great 'cause I actually just asked him now 'cause he goes and does the research, but I actually worked out, when do I want to retire? How much money do I want? What's my investments doing at the minute and what are they gonna plan? And it's the first time I've done it and it's the. First time, it's like you said, you stick your head in the sand and you go, yeah, it'll be all right.
Yeah, it'll be all right. And I did it and I was scared. I was a little bit nervous about what that was gonna look like, and I reverse engineered it back. And I went, do you know what? That's actually more than achievable. That's actually pretty achievable. And I had like you, I just had that confidence. It was like going, yeah, yeah.
Do you know what? This is cool. Maybe I should just buy another car instead. Anyway, that's where we're at a minute, which I know which is
Clare Elliott: right. I think you've, you've described it perfectly because by doing that, by knowing your end point and working backwards, you've got time to, to make that change. Now you can plan for that now, whereas in another five years, 10 years, yeah, you lose time.
Don't. Within business as well. We are not even talking long term, are we? No, it's month to month. Yeah, it's really short term. Yeah. So you need to forecast, you need to project, you need to create your budgets. You need to know what your plans are because we are not just, we are not talking in 10, 20 years time when we retire, maybe.
Know next month in, in a year's time 'cause this is business and things change really quickly.
Ian Luckett: Yeah. And I was talking to, I've actually talked to four people this week about, about exit, what does exit look like and everything like that. Yeah. I want get a eight to 9, 8, 8, 9, 10 times multiplier on the ebitda.
And I was like, oh yeah. How long time have you got for that sort of thing? Oh, three years ago. I said, where are you at the moment? And there's a, there's a clue with that word, right? Yeah. Say well, because they probably
Clare Elliott: dunno. Yes.
Ian Luckett: It actually means, I dunno. And that was kind I said to, you can stop there. You can stop there.
And this is why we talked to so many MSP and they wanna it, and the model's great for it. That's why they, that's why they're doing it. And all the hard work that you are doing, I honestly believe. And I honestly trust the process in this is that we know people who have got eight, nine times, even 10 times multipliers outta their MSPs.
But you've gotta configure it in the right way. It's like your pension, your ices, and all the other things. It's gotta be configured in the right way. And you've gotta know where you are now, where you wanna be, and the things that you've got to do. Because it isn't just about stuffing new leads in, it isn't just about selling more stuff.
It isn't just a. About the, the team and the size it, there's much, much more to that. But you've got to have that plan on where are we today? If I sold the business today and I'm needed in it, then I might get three times multipli four. If I'm not needed in it, owner not needed. What we talk about, you might jump to seven, so therefore, why don't you put a plan together to say, for the next six months, I'm gonna focus on how I extract myself out of the business.
You can't do that if you don't know the numbers. So let's get back to the point. Yeah, absolutely. Um, let's talk about forecasting income. So I've got my direct debits that come in. What, why do I need anymore? They're coming in. That's my forecast. Yeah, that's my income. That's the way they think.
Clare Elliott: There's so much wrong with that.
Ian Luckett: I know. There is why I threw that one over at you.
Clare Elliott: Yeah, that's great. Okay, so within MSPs, yeah, we do have this recurring revenue, which. Is amazing. That is a really good starting point because a lot of businesses don't have that. Each day is a new day. When you're selling products, you don't have that recurring income.
So that is a really good start. So we have our service contracts, we have our managed services that we resell. But it's so much more than that because they are going to fall off. They're going to ebb and flow, aren't they? You're going to lose customers possibly through no fault of your own because customers just move on.
They want something different or they're going into liquidation themselves. So you need to be adding more clients. You need to be working out how you are going to do that. I also think that if we don't grow, we are standing still. So even if you want to maintain your business where you are now, you still need more clients just to maintain you.
You might not need as many or you won't need as many as if you want to scale up and grow rapidly. But you do still need to bring on new clients because otherwise you are slowly going to dwindle. As you lose clients naturally will. So we need to make sure that we are forecasting beyond what we know as well, that we are going out and seeking opportunities.
So we are looking at existing customers, but new revenue, so new project, new services, where can we upsell to our existing customers? And then looking at our pipeline as well. So what have we got in the pipeline? When can it convert? Timing as well is so important because you look at your pipeline and you think, yeah, I'm gonna get that customer, but when, because if that's not for another three months or six months, because we have quite long lead times on our client conversions as well, within MSPs potentially.
So it's the timing of that conversion as well. So you've got to be looking at that, and then you need to be looking at beyond that as well. So that's your pipeline, but where's your next pipeline coming from? Yeah. Where's your new input coming from? That yes, we really need to be looking very far in advance these clients within an m Ms P, they're not quick wins, typically they are long term.
Ian Luckett: So let, let's pause on this for a minute. 'cause this is scary, right? 'cause I know you could say, okay, we're gonna, we're gonna forecast the income so we could say. We know what we've got in the bank at the minute we know what's gonna increase. In terms of the, the thing you've just nailed there is that if you don't add new clients, you're standing still, and if you don't increase your prices, you're actually going backwards, right?
Clare Elliott: Yes, absolutely. That's most importantly because inflation is still going
Ian Luckett: because costs are going up. So if anybody's sitting here going, I haven't put my prices up for the last couple of years, well done for you, given your holiday and your house fund and your retirement fund and your kids' fees back to your clients.
So congratulations. Absolutely. Bit harsh, but that's the reality of it. So you've gotta keep the, you've gotta keep the prices going up. You've got to, and that's what you've got today. Then you've got your existing customer base, haven't you? So you could break this down into a few little streams, couldn't you?
What's likely that we could get out of our, our existing account management? That's another line, isn't it? And then you've got what you've got in your pipeline, which. Maybe nothing, maybe something. So having a look at that and phase that cash flow in when you think that's gonna come, that's a bit scary because what if it doesn't come in and et cetera, et cetera.
But that's where you get to know what the numbers are, like the, the bit that I just wanna, where do you start with? Many MSPs who do not have a working sales and marketing engine to deliver fresh leads. How do you budget for that? Do you have to get the process up and running so at least you've got some conversations going in first or, because this is a real head in the sand moment.
It's a real, yeah, they're gonna do something and then something will work and then they'll get distracted and then something will work and then they'll get distracted. But how do you put any forecasting when you've. Literally got no idea where your next client's coming from With referrals.
Clare Elliott: Yeah. But then I think forecasting is something that also drives the change as well.
Because when you forecast your income, when you budget for all of your costs, when you know where you need to end up, so I always do this backwards logic. So whenever I do any sort of budgeting and forecasting, I always start with what I want my profits to be at the end of the year. So I know what my profit margin is.
I then know what my direct costs are, my overheads, because they're fixed costs, they can't change. So I know what they are. Then I know the percentage of my direct costs to my revenue. So say my, my direct costs are 40% of my revenue. I know that as my revenue ebbs and flows, then my direct cost will ebb and flow so we know exactly what we need to get to, and then knowing what you need your sales to be will be the driver for the activities that you need.
To do. So, it might be that they're already in your pipeline, you just need to convert them. It might be that, oh gosh, I need 20% is in my pipeline, or I don't have a pipeline, so yeah, I know that I wanna add to my sales, but where is that going to come from? So then you need to go and add to your pipeline.
So yes, then it's a cost. Then you're adding your cost back in. Then you need to add more revenue to cover that additional cost as well. So it, it then becomes this sort of scalable forecast of what you need to achieve. But at least then you absolutely know, and then that becomes the driver for your change that then determines the activities that you need to do.
And then as you've said, many times I've heard you say this many times, is consistency. Yeah. Yeah. You've then just got to do the work and be consistent, because sales is all about that consistency, isn't it? Prospecting is all about being out there and. Doing what you do.
Ian Luckett: Absolutely. And then you've got, then you've got that driver and you can say, yes, we're, we are on target.
We're not on target. Then we can like just, but I think what you just said there that really hit a thing with me was hit a note with me was around just understanding the percentages of your direct labor, your cost of sales, what does this look like? And we track all that with our clients regularly in the headline numbers and review that with them.
Yeah. Really, really key point. Okay. So next, next point then. So I'm gonna go and buy a holiday, a house, a car, whatever it is. First thing I'm gonna do. I'm gonna set myself a little old budget and my wife won't set a budget around the holiday. But anyway, cars and houses, yes, I will set a budget. This is what I can afford, right?
Yep. Don't do that in MSPs, do we don't do that in business much. Do we set budgets? We just wing it a little bit and just make sure there's money left at the end of the ba end of the month, don't we?
Clare Elliott: Yeah. Do you know? That is so true. I hear that so often. If you said to many people that we know, what are your costs going to be?
What have you allowed for? What do you know your income needs to be? I don't know. Just winging it. Just month to month, if something comes in, a new contract comes in, it's, oh. We are lucky. We had didn't. No, that's not luck. Yes. You don't want that to be lucky. You wanna have actually forecast for that. You want to have gone and won that opportunity.
Not just been lucky that it's landed, because if you are lucky. What about if you're unlucky, what's gonna happen to your costs? Yeah. And how are you getting ahead of the curves you want to grow, but when do you hire that next person because you can't them before you've income coming in. You also need to hire them before you are too stretched before all of your other team Yeah.
Are at maximum capacity. So you've got to balance that as well. So I just, it, it absolutely baffles me how business owners don't forecast and don't do their budgets and how they are just winging it. I always, if you are not doing any forecasting and budgeting and you are successful, that is amazing.
You're doing something good. You're doing something great. If you're already doing something great by not doing your forecasting and budgeting, why don't you harness that? And do it, and then you could be amazing. Yeah. Yeah. Imagine what you could achieve by being ahead of it, by knowing where you want to go, by getting that clarity.
So whether you are not doing it and you're not in a great place, or whether you not doing it and you are already in a. Still do it because you'll be in an even better place.
Ian Luckett: Exactly. So give us some budgeting 1 0 1 tips. What's the what, where do we start if we haven't done this before? Is it just a case of cost heads and what do you wanna spend or where's the best place to, to start off
Clare Elliott: with?
Yeah, I would start with, um, your overheads. Because A, it's the easiest. B, it's possibly the thing that is the slowest to change and the most uncontrollable, because if you've got rent, then it, that's just a cost, isn't it? Yeah. It's what it's, yeah. You can change it longer term, but that's a bit more work.
So start with your fixed cost. Start with things that you absolutely know you're going to have to spend. Then look at your, probably within an MSP. I think it's probably gonna be your salaries next, your engineers. So look at your people, look at the efficiency. Look at what capacity you have. Because if you have capacity, then that's got to be a driver to get more clients more quickly.
If you don't have capacity, then you've got to plan for when you're going to make conversions and bring new people in. So you've got to. Look at your managed services. So can you go back to your vendors and get some pricing, some discount to all your suppliers, be that you know your utilities, your vendors.
Everybody go back to your suppliers and negotiate and look for alternatives. And I'm not saying always go cheap, but it's about efficiency and effectiveness. It's about getting the right thing for your business. Look at the costs of your projects. Make sure that you know what your costs are going to be and that your quoting accurately for your projects as well.
Yeah, so many times as well, you'll do a. It doesn't get reviewed. It doesn't get analyzed. No.
Ian Luckett: So I, I'd actually say, I'd actually say 99% of the time, 'cause this is like where I cut my teeth back in corporate was about project analysis. After we've done it, how much money do we make? Lessons learned and financial reviews.
Absolutely. And they were absolutely, I'm still scarred mentally from some of the day long meetings that I endured when we went through these projects. And that's the first thing I, when I came into this industry, it's like, who's matching the quote against what you actually delivered? It was there or that.
Clare Elliott: Yeah, but how do you know that if you're not going through it, if you're not going through that time analysis, how many times did your engineers go back just for a quick fix and you think, oh, it's just a five minute fix. No, it isn't. Add that up. And that's a whole other project. So yeah, do your project analysis because then it makes you quoting better for the next time as well.
So you won't have those losses. And yeah, it'll be lessons learned. And then look at your margins. You've then, within your, within your budgets as a whole, you've then got to have some contingency planning as well, because. Things do happen.
Ian Luckett: Yeah,
Clare Elliott: things do go wrong. So you've got to have some contingency planning and then you've got your external factors, you've got inflation, you've got price hikes that you can't control from vendors.
You don't always want to move vendor. You just have to suffer their price hikes that you've got to be forecasting for that as well. And then ultimately. You've got to be saving, you've got to be forecasting and budgeting for your profits and your cash. Yeah. Because that's what's going to give you the investment back into your business for the growth for the next year, et cetera.
And also, that's the fun bit as well. When you've got stuff left over, that's how you can buy your new car. Yeah, that's right. And. So it's layering it up, actually. It's getting in place everything that you absolutely know is gonna happen. And then layer up for your contingencies, for your inflations, for your uncontrollables, and then, like I said, ultimately for your profits and your savings.
Ian Luckett: Absolutely love it. No, and that's everything there just completely resonating. And I know will be, there'll be many MSPs sitting there going, where do I start? Probably go back to the beginning of this podcast, check out the transcript, build yourself a plan. Come and have a chat with us if you need to, but it's really, it really important.
Let's talk about managing. Managing and, and adjusting. We've got the, we've got the forecast income and the cost. We've got the budgets in place. We're now gonna start to do a bit of an analysis, which is, which doesn't need to be a paralysis by analysis, does it? 'cause this could actually be quite high level at the minute.
And then understanding where you, if you're gonna rag it, where your red, ambers and greens are.
Clare Elliott: Absolutely, you've got to review your budgets and you've got do it monthly at least. At
Ian Luckett: least monthly.
Clare Elliott: Yeah, so repeat the process. You are not gonna repeat it from scratch, but you're going to review it. You're going to adjust it.
You will have won some clients, you will have lost some clients. You've got to reforecast for those adjustments. You will have had a price hike somewhere. You might have had a savings somewhere. You might have lost an employee. So now you've got a recruitment to factor. You've got to re, we've got to revisit this every month because things change so quickly.
Particularly within small business and within small business as well. A small change can have a quite a large ripple effect if you're not on top of it really quickly, because a small change actually in a small business is a big change. Yeah.
Ian Luckett: So
Clare Elliott: you need to be on top of it. So you've got to constantly review, constantly is having that consistency within your budgets and your plans as well, and adjust as you go.
So like I say, if your income is predicting to be higher or lower, plan for that. How are you going to adjust your costs? Do you need more people? Do you need to increase efficiencies, look at your costs and again, work out whether you can make changes. So can you go. Look for alternatives. Can you do something different?
If you've got a capacity with employees, can you actually move them into a project? Go and win a project and move them into there and just know exactly where your money is going within your business so that you can then make changes and adjust.
Ian Luckett: So then once we've got the budgets in place and we know that we like adjusting them, talk to me about why we need to convert the budgets into these cashflow plans then.
Clare Elliott: Cash is king, right?
Ian Luckett: Yeah.
Clare Elliott: Nothing exists without cash profits. You need profits because profits are what you reinvest, and profits is what within our MSPs as well. Profits is where your dividends come from, so you can't pay dividends out of your balance sheet if you don't have retained earnings. So you've got to have profits there.
But cash actually is the most important thing because cash is the thing that within cash, the timing, so you might be very profitable. Actually you've had to pay your vendor early or your customer is now paying you late. That creates a cash deficit. So your cash is where you've got to understand your timing issues, and you've got to, you've got to have capacity within your cash.
You've got to have residual cash as well so that you can cope with those timing issues, or at least know them in advance so that you can do something different. So if you've got investments, you. Pull that back for a little bit. If you need to borrow, be that for a day. You can have an overdraft, be that for a month.
You can get a short term loan, so you've got to know where your cash is. Your VAT, unfortunately, HMRC doesn't really wait for anyone. You've gotta pay your that bill. You've gotta pay your patient tax. You've gotta pay you PAYE from your salary deductions. Having said that, in crisis situations, you can talk to.
But that's a whole other level. But yeah, so cash really is key because you can run a business without profits, but you cannot run a business without cash because your employees won't hang around very long. Your vendors won't hang around very long and your customers will start to get nervous about the service that you are offering them.
So they'll stop paying you as well. So it will make changes very quickly if you don't keep on top of your cash.
Ian Luckett: Thank you, Claire. Just before we, we. Touch on the last section, which is all about like troubleshooting when things start to go wrong. We talked a lot about stuff you need to do. For a typical MSP, what would their finance team look like?
Who's gonna do all this? Is this the business owner? Is this your management accountant? Is this your accountant? Is it the bookkeeper? Do you need to get a financial controller in? What if we took a, if we took a, I don't know. Let's take a, an MSP kind of bubbling around the seven figure marks, high six, early seven figures.
What should their finance team be looking like and how would that kind of like mature?
Clare Elliott: So around that mark, I would assume that you would have a person in your day to day doing all of your supplier invoice processing, all of your customer invoice, saying or managing your bank accounts, your payments, your salaries.
So you would have that person. But actually, if you are at that seven figure mark, then you are going to start to wanna have either an internal accountant or somebody that you are. Bringing in on a.
When you get a finance professional in your business, when you're at that point where you can afford that investment, because it is an initial investment to do that, but the returns you get will start to escalate really quickly because having that foresight and that professional within your business will create the desire to achieve that you need to achieve.
So. When you bring an accountant in, and I say accountant, but it doesn't have to be an accountant in the traditional sense in a firm of accountants, but a finance professional. Yeah. A part-time fd, whatever it is you want to do, they'll cover their costs really quickly because they'll add so much value.
Yeah. But. Of course, I do understand that you need to be a certain size to warrant that investment as well. Yeah. So yeah, you need to be in the right place for that, but, but they will make it pay for you. It is definitely the right thing to do. It really, it scares me when I hear companies that are at the seven figure or.
And we're talking like several million and they don't have,
Ian Luckett: don't have fd, don't have that.
Clare Elliott: And I think, how are you doing that? How, how are you,
Ian Luckett: how do you even get into where you are? What about, yeah. What about some of the smaller guys? Then what about some of the smaller guys who have smaller teams and maybe around the half million pound mark?
What should they, obviously it's around affordability, but then you've got this, you've got this, this investment, this ROI that you just spoke about. What does that look like?
Clare Elliott: Yeah, and it still could be somebody external or it could be the owner themselves, or it could be that you've got a really amazing bookkeeper that can start you on this process.
Yeah, it does depend on where you are, but actually I still maintain that even as a small business if you are working on your business. So even if it's you that has to do this, if you are working on your business and you others to do, generate the income. It will still have financial benefits for you.
Yeah, so I think as well, it's easy when you're very small. When you start out, you are, you're doing everything. You are doing the projects. Yeah. You are doing the contracts. Yeah, you, but you've got to very quickly get out that, and you've got to start working on your business and financials. Is actually working on your business, that is what's gonna drive it and move it forward.
So the sooner you can get out of that, the sooner you can get into that situation, then the better for your business.
Ian Luckett: And take the, and take the blueprint that we've talked about today from this podcast, and go and talk to some virtual fds. Go and talk to three or four of them and just say, this is where I'm at.
If this is where I want to go, how can you help me and see the sort of things that they they're talking about and are you resonating with them and are you getting them and do they get you? And I think really importantly, try and get someone who gets MSPs because if they don't understand the business model, you don't want to be spending your time educating somebody on a business model.
It's like your accountant should be an MSP specific accountant and like your bookkeeper and all of that, so they get your business. But it's really important that you've, that you get someone who's, who gets it. And I remember a boss of mine many years ago, he, someone said, oh, do you wanna, can you do this for me?
And it was something different to the business, the main business. He said, yeah, of course I can. 'cause he said yes to everything. And then he went out and he got a load of quotes from somebody else and he just copied their model and he just built a business and just did exactly what these people were doing.
So go and grab information from when someone's pitching to you, they're telling you what the benefit is. How are they? Get all of that information and put it all together and then go, this is what I need. Wow. Look at this. This is my business case. To justify spending that sort of money, you might need to dip into some reserves to do it, but we've had a couple of clients now who have, who have bought in a part-time FD or fraction fd.
Blown the business to pieces positively. By the way, it's been absolutely incredible results. Let's, let's just talk about a few troubleshooting things just before we, just before we wrap up. Been a great show. What happens when things slightly go a little bit off track? What is it that we need to focus on?
What's some of the emergency cords we need to pull?
Clare Elliott: So in terms of, yeah, very short term emergency course. You've got to go back to your vendors. You've got to get better pricing, you've got to cut your costs. The first thing you need to do very quickly is cut your costs.
Ian Luckett: Yeah.
Clare Elliott: The worst case scenario. That could be people.
It could be going back to the vendors with regards to cash. It could be like say, gonna C and seeing what payment plans you can put in place. Same with your vendors as well. It could be going to them and saying, need some support over the next three months. What can we do? Can we come to an agreement? Be honest, be upfront.
Speak to your bank. Maybe look for some short-term funding if that's a real crisis situation. Yeah, yeah. You can do some easy things as well. If it's not quite at that level, accelerate your customers paying you. Maybe give them incent an incentive for doing that. Yeah. Yeah. E out your vendor payments a little bit longer as well.
Okay. You don't want to upset them, you don't wanna do it too much because you don't want to lose them, but delay those as much as you can as well. Talk to people. I think that is the thing. Yeah, just
Ian Luckett: chat. Just tell 'em what's going on. People are human. Yeah. Most. And you
Clare Elliott: know, everyone that you speak to is also in business, so they, hundred percent get it.
You're not talking to someone who won't be understanding your problem.
Ian Luckett: Yeah, yeah. No, that's absolutely brilliant. Love it. Claire, thank you very much for your time today. Absolutely brilliant show. I think there there is more than enough golden nuggets in this, which is a bit ironic from a finance point of view.
Don't tell the end of revenue. What's the three top actions people need to take after listening to today's show in your view?
Clare Elliott: Oh, okay. Top three actions. So in terms of forecasting and budgeting, follow the backwards logic. So where do you want to end up And that will lead you to where you wanna be today?
What actions you need to start today. The second one I think is, be honest, be realistic. So we always say, overstate your costs and understate your income. Yeah. You know, get a real perspective of what is actually going on, because again, that's just gonna give you the clarity and control. Isn't that? And then thirdly.
Do it. Just do it. Just do your forecasting. Do your budgeting. Actually take the time to work on your business because it'll pay dividends. Literally. Literally.
Ian Luckett: It'll pay, or great little pun at the end of it. And I think the last thing for me is just be uncomfortable. Be comfortable. Being uncomfortable about this.
Absolutely. Yeah. Plaster off. It's ripping it off and you're not gonna what You may not like, what you might like what, but it's time to get your head outta the sand and really to focus that plan, as Claire says, backward logic, reverse engineering, whatever you wanna call it. Hopefully this show is gonna be one that's gonna change many lives.
I think it might do. I think it's been great. Thank you very much, Claire. I look forward to catching up with you soon. Thanks everyone. We'll see you all on the next show. Take care. Have a good one. Thank
Clare Elliott: you. Bye.
Ian Luckett: Hang on a minute. Just before you go, and if you're curious about how this episode links with the ability to scale your Ms P to a million or, or if you are already there, accelerate to five, then we wanna invite you to come and take the MSP Mastery quiz.
And in just three minutes, you're gonna get a 360 degrees scan of your business where you can identify the one or two tactics that. Engage and align your people and help generate more leads in your msp. It's really simple. Just click on the link in the show notes, and if you have enjoyed this episode, we'd love to get some feedback from you by means of a rating review on Spotify or iTunes, or your podcast platform of choice.
We really appreciate every single one of them. Now, you can go and enjoy the rest of your day, and we look forward to catching up and connecting you soon. All the.