Tight budgets. Limited staff. At first, non-profits do not sound much like a vertical that makes sense for MSP growth. How does one build a profitable line of business from a group of clients that, by definition, do not turn a profit themselves?
However, consider those first impressions one more time. Tight budgets mean there’s no room for anything to go wrong with their IT networks, because there may literally not be enough funds to repair and restore crucial infrastructure if it goes down. Limited staff means hiring a team of dedicated, qualified IT technicians is out of the question. In reality, there may not be a vertical better-suited to the managed services model than the non-profit sector, as there is a clear and genuine need for MSP services.
Non-Profit Vertical: The Market Opportunity
Just as an MSP’s focus is on providing excellent service to their clients, a non-profit’s unwavering focus is on their guiding mission, and seeking support to further their mission. They must have an effective stream of donations, grants, and other funding channels in order to operate, and that means hiring full-time staff, running volunteer programs and paying for general and administrative (G&A) expenses. Naturally, with G&A expenses kept at their bare minimum so the majority of funds can go towards mission-forward programs, spending large sums of money on technology—whether it’s hardware, software, maintenance or support—is not a major priority on line-item investments.
A low, fixed-cost fee to an IT service provider is preferable for businesses in this vertical. It’s easier to budget for, with no extra costs or spikes, and it provides far greater value than hiring an in-house technician. For a regular fee, a small non-profit can gain RMM, security and BDR services, 24x7 staff to prevent and mitigate issues, and even mobile device management and help desk capabilities for their staff, who may not be in a centralized office.
The non-profit technology landscape is changing, too. As more and more technology enters the non-profit space to fund campaigns and provide easier methods of donation, the demand for managed IT services increases, as they are relied upon to install, manage and maintain this emerging technology. Add to that financial reporting functions, performance tracking software, email lists and database management, and there is now essential technology that is critical to the non-profit’s success—making an MSP’s role even more crucial.
In order to meet the market demand of the non-profit vertical, it’s important to offer the right set of services at a margin that also meets the growth goals of the MSP. Therefore, the standard set of services that are offered to commercial businesses may not be optimal. MSPs should review their scopes of service for RMM, security and BDR to carefully build a specialized package for this vertical that provides the coverage and support that non-profits need, at a price that works with their budgets.
By understanding this vertical’s fiscal challenges and building an affordable package that optimizes NOC services to keep internal costs down, MSPs will close more accounts and see profits through margins on services for each customer.
Non-profit organizations exist in a space where they are dually obligated to operate according to the strict budgetary constraints set out to their donors, as well as governing Federal and state regulations that vary from organization to organization. This means the compliance concerns of other verticals may also come into play here—including the demand for airtight data security, data retention, and backup and disaster recovery—in order to meet compliance standards for HIPAA, PCI-DSS and more.
The non-profit sector also has specialized software many organizations use to manage donations, membership and more. Familiarizing oneself with the varying software, hardware requirements and other specific IT needs of a non-profit will help speed up the sales process from opportunity to close. Non-profits are looking for the expertise in their existing technology with evaluating a managed IT services provider, so knowledge of how to best facilitate their day-to-day operations will help a provider stand out from their competition.
For many non-profits, technology is a means to an end; it needs to work (at all times), and the shift to more deeply-integrated systems to conduct mission-critical work has made the MSP an indispensable partner. There is a distinct opportunity for MSPs to become trusted advisors in the non-profit vertical, providing much-needed services to this community at a fixed price that fits their budget. And, if your services are priced and packaged appropriately—given that you’re partnered with the right solutions vendor—you will be able to realize significantly profitable margins while your customers can further their own goals and growth.
This post concludes our series, New Verticals to Go After in 2018. If you’d like to read up on the other four verticals we covered in this series, see below:
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