#51 – Don’t Be That Guy: Net Profit Is a Lie, Gross Profit Is King (Ryan Alter)

In this Don’t Be That Guy episode, Josh Peterson and Ryan Alter take on a hard truth that many MSP owners quietly avoid: net profit can lie to you. Through candid examples and lived experience, they explain how owners can technically show a profit on paper while slowly bleeding cash, overworking teams, and masking operational problems inside general and administrative expenses. The conversation reframes the profit and loss statement as an operational dashboard—not a tax document—and makes the case that gross profit, particularly service department gross profit, is the clearest signal of whether an MSP’s business model actually works.

Drawing directly from Ryan’s experience building and selling his MSP, the discussion digs into service mix, project revenue, utilization pressure, and the dangerous habit of ignoring weighted averages across product, cloud, and services. Josh walks through why a 42% company-wide gross profit target matters, how even a few percentage points missed can quietly cost six figures over time, and why “just covering your monthly nut” is an unacceptably low bar for long-term business health. These themes closely align with the financial execution framework behind the BMK Vision operating system, as well as broader guidance found in Strategies for Sustainable Growth for MSPs and Enhancing Business Decisions with MSP Analytics. For MSP leaders who want to move beyond gut feel and manage by real numbers, this episode is a necessary reset.

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Episode Highlights

• 00:02:10 – Why net profit can mislead owners into a false sense of security.
• 00:05:40 – Gross profit explained as the real measure of operational performance.
• 00:10:04 – Service department gross profit benchmarks and why most MSPs don’t know theirs.
• 00:17:48 – How revenue mix and weighted averages drive overall profitability.
• 00:33:09 – The long-term cost of being “just a few points off” financially.

About the Guest

Ryan Alter is a former MSP owner and industry veteran with deep hands-on experience in operational finance, service delivery, and profitability. Having built and sold his own MSP, Ryan brings a pragmatic, operator-first perspective to financial discipline.

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About the Host

Josh Peterson is the CEO of Bering McKinley and host of the BMK Vision Podcast, where he helps MSP owners replace intuition with clarity, discipline, and execution.

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