For those of you who may have missed the Invarosoft™ presentation at Australian Partner Day 2018, we have a great summary of our presentation about the Pyramid for MSP Success. Keep reading to discover seven key ingredients to successfully growing your MSP business.
Who is Invarosoft?
Invarosoft was launched by industry veteran Jamie Warner who grew his MSP, eNerds, from $3M to $7M in revenue in 4 years organically using their flagship product ITSupportPanel™ as a differentiator.
What is the Pyramid for MSP Success?
Presented by Invarosoft’s VP of Success, Jessica Ross, the Pyramid for MSP Success was a summary of what Jamie believes to be the ingredients to growing a successful MSP business. These ingredients represent the areas you need to focus on and include:
- Business Model
- Marketing Strategy
- Purple Cow
Pro Tip: Many people ask larger MSPs the same question, "what is the one thing that lead to your growth?" While this is a fair question, the answer is that it’s never just one thing. It's an alchemy of many different things, hence why we define it as a "pyramid." Read Good to Great by Jim Collins to learn more about growth ingredients.
1. Business Model
Are you a break/fix provider or a true MSP? We recommend the latter if you want to benefit from recurring revenue. It’s a less stressful model and it matches your monthly costs of salaries, rent, utilities etc. Just bring on more client revenue than you spend each year and watch your business grow!
Pro Tip: Switch your clients to Direct Debit. It’s absolutely the best way to run a business. Also, distributors are now starting to direct debit licensing such as Office365 to you. Remember: “Revenue for Show, Profit for Sanity, Cash is King!”
People make up the platform of any business, so you need to focus on getting the right talent and company culture. Also, understand how your org chart grows as your business grows.
Pro Tip: Growing MSPs need different departments. From 1-10 staff , you need the owner, engineers and admin. From 11-20 staff, add a service desk, inside sales, project engineers, etc. And for 20+ staff, add a dedicated sales manager, a management team and maybe off-shore team. For more information on building the right team, read 5 Dysfunctions of a Team.
Do you have all the right systems such as PSA, RMM, NOC, BDR, Sales, Finance, Documentation, etc.? Have you considered replacing email with an App?
Pro Tip: You need to get your tech stack right to drive operational efficiency. We believe email support needs to be replaced in the stack with an "app" to provide a better customer experience and drive more productivity. Here's why we think email is not a great solution.
You need to ensure you have the right product mix for your MSP, such as managed support, consulting, procurement, Internet, Office365, and so on. However, do you lead with managed support and only take clients who sign up on a monthly fee?
Pro Tip: With a limited sales team, you need to decide what your core service is and sell that. We only sign up clients on managed support because it’s the most profitable. Then, we sell them everything else once they’re on board. Having a focus when it comes to your products is important.
5. Marketing Strategy
What is your marketing strategy? Do you focus on a vertical? What is your sales strategy to sign up new monthly support? How do you get your leads?
Pro Tip: Focusing on a vertical makes marketing so much easier. You can be much clearer in your messaging and use case studies, etc. We recommend you always sell "good, better, best" with your managed support. Read Monetizing Innovation to learn how to do this.
Why does your MSP exist? Why do you get up every day? Where are you going? Asking yourself these questions and being clear on this helps move the ship in the right direction.
Pro Tip: Create a one page "painted picture’" document, which outlines your mission, vision and values. Share this with your staff to ensure everyone is on the same page. Alignment and a shared vision are crucial to achieving your goals.
7. Purple Cow
Finally, how do you stand out? Remember that every MSP sells the same thing and uses the same technology stack, so what are you doing to be memorable when you’re selling?
Pro Tip: Our MSP used ITSupportPanel to differentiate our services since 2009. It was a point of difference that actually added value to clients. They loved it. Our conversion went up! Read Purple Cow by Seth Godin to learn more on how to differentiate yourself.
If you'd like to go beyond these seven keys for success, click here to read more on how Jamie grew his MSP from $3M to $7M in four years.
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