- Establish a Repeatable Process
All businesses begin with an idea, but the best businesses learn to transition the broadest ideas into precise processes. For MSPs, this means growing managed services from an overall concept to a business model in a way that’s repeated and recurring for the client. Ideally, this process creates consistent and measurable outcomes using the same procedures. It should also be easy to scale.
2. Define the Mission Statement
This should be the number one priority following the development of business process. Why? Because a clearly defined mission statement can help to invigorate a brand and energize a culture. This can also help to drive brand awareness, especially when it’s effectively and enthusiastically communicated to company employees and customers.
3. Create a Technical Business Offering
Once the repeatable process has been identified and the mission statement is defined, MSPs will be ready to perfect their technical business offering. A strong and specialized technical focus can do three things for an MSP’s business: create competitive differentiation, increase credibility and, most importantly, allow for accurate pricing and service-level agreements. Specialization is the simplest answer to making money as an MSP—remember, it’s incredibly difficult to be all things to all people.
4. Become an Expert
MSPs should target a specific industry and become the expert. The most successful MSPs pick a vertical and stay in it—for example, one might specialize in data migrations for healthcare professionals. Making the decision to be selective with clients helps to reduce early mistakes while continuing to grow important relationships. As experts, MSPs are better equipped to align real-time company actions with the client’s vision, which often results in an increase in overall sales, stronger long-term relationships, and increased opportunities for recurring revenue.
5. Capitalize on Recurring Revenue
As the IT industry transitions away from Value Added Resellers and break-fix business models, MSPs should work to secure their long-term business strategies by offering subscription-based products. As a means to drive profitability, SaaS and other cloud services have seen an increase in demand for monthly pricing models. Recurring revenue models are exciting for MSPs. However, they also place a much higher emphasis on the need for exceptional customer service, because now it’s about the monthly renewal. And this brings us to our next point…
6. Invest in People
Investing in recruiting and employees can go a long way toward improving business success. The key is finding the right people. It’s important to remember that in a field that is always changing, skills may not always be the differentiator between candidates, sometimes it’s about hiring less-experienced individuals to achieve success
7. Build a Network
Choosing the right partners is critical to MSPs. Partners should stay tuned in to the industry and be highly responsive, creating top-tier customer service (especially when using recurring revenue models). Find those vendors who offer the best solutions for the customer. Partnering with other MSPs can bring an additional collection of skills and methods to the table also. Partners should share a business vision, agree on their direction and the best business models for success, and together create and build upon the scope of managed services they will provide to their clients.
Deciding to make the leap to manage services can be a big transition. Keep these seven keys to success in mind to help guide you to exciting levels of profitability.