How Creative Tech Grew Annual Profits More than 100% in 2018
The seven-year-old MSP is sailing through the entrepreneurial journey. What’s its secret?
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“We essentially spend a grand total of $0 on marketing every year since we’ve started. Our clients keep referring us to others, keep growing themselves, and continue to watch us become better and better at what we do.”
“In the last few years, we’ve expanded our cloud RDS and VDI services, and we have a really solid product. Our guys continuously work on it to make it better and more stable every day, and our clients love it. We’ve seen so many other cloud offerings that are either not secure, slow, built on old technologies, or simply don’t cater to what the end users need. We stay at the cutting edge of technology, and our cloud is reliable, stable, scalable, secure, and does exactly what our clients need it to do.”
“We’re never stuck in one place. We’re always looking to the future to determine what our health-care clients will need one, two and three years from now, and develop that technology to offer it to them before they hear about it from the next guy.”
“We never say we know better than anyone else. We’re constantly looking at what vendors and channel partners are offering and considering implementing that into our stack. If we take over from another provider and see something cool they’ve put into place, we’ll learn from them and replicate it.”
“Many service providers are stuck in their technologies and their ways. We’re not. We move with the industry, and with what our clients demand. Yes, sometimes you need to turn down a client if their needs are too scattered or customized, but we push the limits. We’ve had clients call and say they took over a new building yesterday, and we’ll send someone out to do an assessment that evening, and have our guys in the building a few days later transitioning to the client specific systems. You won’t hear from us, ‘The timeline is too tight’; rather, ‘Don’t worry, we’ll get it done.’”
“We don’t hire for tech talent; we hire for personality traits that show us this person will be a team player and longtime employee. Each of our employees loves what they do, and that really shows when it comes to supporting a client. We all have the same goal and understanding in mind — our clients put food on our table and we’re going to do whatever it takes to support them.”
“We don’t hire for tech talent; we hire for personality traits that show us this person will be a team player and longtime employee. Each of our employees loves what they do, and that really shows when it comes to supporting a client. We all have the same goal and understanding in mind — our clients put food on our table and we’re going to do whatever it takes to support them.”
The channel is a marketplace comprised of startups, or companies that were once startups. Like any entrepreneurial venture, managed-services shops essentially follow the same journey. There’s that first spark of an idea that comes from identifying a gap in the market and being certain you can fill it. You scrape together some cash and then launch your bare-bones business, which you quickly learn may refuse to conform to the model you started with. It’s a time of pivoting and experimenting, and if you make it through, you know you’ve landed on the foundation of a successful business model.
In the past, many MSPs hovered at this point, content in their continued existence. But in today’s channel, service providers must keep pushing down the entrepreneurial path. We’re seeing unprecedented consolidation and private equity flowing into this space, and these investors all want to see the same thing: recurring revenue to cover ongoing expenses, steadily improving profit margins and an executive team that wants to grow the company.
There are a staggering number of MSPs that fall into this group. As private equity snaps up service providers to form “super MSPs,” many partners are optimizing their businesses to catch the attention of investors, or to position themselves for a move that helps them grow organically.
One such MSP is Illinois-based Creative Technology Solutions. Founded in 2011, it sailed through the first two stages of the entrepreneurial journey. Revenue growth, says Eli Webster, the company’s president and CEO, hovers at an average of about 50 percent year-over-year. But it’s in the profit margins that Creative Tech really raises eyebrows.
Since its inception, Webster says the MSP has had an average profit growth of 50 percent each year. The goal is to grow its 2018 profit margin to more than 100 percent of what it was in 2017, one Webster is confident Creative Tech can meet.
It’s the brass ring in a maturing market where every MSP is trying to improve operational efficiencies to increase profit margins while maintaining revenue. So what’s Creative Tech’s secret? We sat down with Webster to learn what goes into the MSP’s secret sauce. Scroll through our slide show for tips you can apply to your business.
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