How should you really be looking at managed IT services as an MSP? In the sea of service providers today, many businesses struggle with making the MSP model work for them. If you want to ensure that your MSP business can withstand the tide, you have to adapt to the constant ebb and flow of the industry.
Building a strong business model is a lot like building a sandcastle. You have to start with an open canvas and vision in mind. You must find a solid foundation and account for changes in your environment or industry. And finally, you need to follow through on your execution. To prevent your business from getting swept away this summer, check off this next item on our MSP Summer BuckIT List: adjust and fortify your MSP business model with processes designed to meet both your short-term and long-term goals.
The Managed Services Impression
Managed IT services is not a product, it’s a business model. If you’re an MSP reading this and thinking, “wait a minute... managed services must be a product, because isn’t that what I’m selling?” then you’ve just reached the first challenge you’ll have to overcome if you want to strengthen your business model. You must change the way you view managed services. Your clients aren’t just looking for someone to provide them with a platform for their IT needs. They are delegating their IT operations to you, because you specialize in handling these responsibilities. Think of it as way of doing business, and a solution for helping your clients accomplish more with your services. Most of you got into this business because you are skilled technicians, but now you need to take the next step and think like a business owner, not just a technician.
Lay Your Foundation with a Business Plan
Building a business plan is a great way to start strengthening your business model. It is the foundation on which you will begin to build your business, so its aim should be to help guide your business into the future. According to a Palo Alto Software survey, new data shows that companies who completed business plans were nearly twice as likely to successfully grow their businesses or obtain capital as those who didn’t write a plan. It’s important to plan if you want to execute properly, however you know your MSP business best, so your business plan should be individual to you. To get you started, here’s a brief overview of some key components you should include.
Start with your mission statement. This is where you answer the question, why are you in business? Make sure it is clear, and that everyone in your company knows and operates by it.
Next, you should set both short-term and long-term goals for your company. A good guide to go by is to make sure they are specific, measurable, and timely. For example, you might want to gain (x) amount of clients in your first year. Also, be sure that they are realistic, because no one likes setting a goal that isn’t attainable! A business plan is pointless if you do not plan on adhering to the blueprint and accomplishing the goals you set.
Similar to your goals, the next step should be to come up with your business objectives. These should answer questions like, how will you monitor and measure your success? Or, what are some markers that allow you to achieve your goals? Make sure that your objectives, whatever they may be, tie into your goals and mission statement.
Business structure and core growth planning
After creating your objectives, you need to map out your overall structure. Focus on how you will operate on a daily basis, how you will handle growth, and what the necessities are to deliver your services.
Once you have that all mapped out, you can start planning your marketing, sales, and financial projections. Think about how you will get the word out to clients and generate new leads. Decide upon how you will price your services. It’s also important to think about how you will fund your business. By thinking everything through and creating a strong business plan, you will ensure that your business won’t get washed away because you will have a solid base to build upon.
Building Your MSP Castle
Rome wasn’t built in a day, and neither was your managed IT services business. Building a fortress takes time, so you don’t need to dive in head-first. By taking it one step at a time, you will be able to deal with unforeseen issues as they arise, and adjust your business model accordingly.
Be sure that you are equipped with the right tools and skills that are essential to the MSP market. This should include using a remote monitoring and management (RMM) tool, backup and disaster recovery (BDR) technology, talented technicians, etc. If these are things you don’t have expertise in, invest in your professional growth and learn these core skills. It will be well worth it if you want to withstand the ever-changing tide in the IT industry.
Focus on value
Many MSPs can get swept away if they get too caught up in the technology when talking to prospects. This is where thinking like a business owner comes into play. Usually, your clients don’t care how your services work, they care about what it does for their business, so focus on the business value your services have. If you want to remain relevant and successful, your services should revolve around top selling points, such as fully-managed, 24x7 coverage, 365 days a year. Also focus on being proactive rather than reactive. The IT world doesn’t operate on the traditional 9 to 5 schedule, so when an unexpected problem arises, your clients will find immense value in your ability to quickly remediate it before it becomes a more serious issue.
Keep track of the tide
Having a stable and secure MSP business model means that you need to pay attention to the changes in the IT industry, and make sure that your business processes and services can adjust accordingly. Not all of your clients will have the same IT needs. By offering both flexible and scalable services, it will make matching the needs of your clients much easier. Technology is constantly evolving, so having the flexibility to adapt and the ability to address varied business needs are key components to success in this industry.
While the tides of IT may wash away others, your MSP castle will remain strong with the business model you planned, perfected, and protected.
By Gretchen Hoffman
By Meaghan Moraes