When It Comes to MSP Profit, One Size Does Not Fit All

There are hundreds of conversations moving around in the industry today about all the things you can do to be a great Modern MSP. The truth is that you can make barrels of money transforming your business from a project-based practice into a recurring revenue model. Listening to smart conversations might get you exactly where you want your business to go, right?

At last count, it was determined that there are over 100,000 managed services providers in the world. As business in the cloud continues to expand, the number of active MSPs is obviously expanding right along with it. Your business is in competition with a whole lot of other businesses, each at different levels of maturity and success, with varying degrees of pure MSP revenue. The pressure on you is intense, and maybe more than a little bit daunting.

Take a breath and pay attention to this, either as a new concept or as a cheerful reminder: One size does not fit all. You can be the Modern MSP you want to be.

There are dozens of variables and combinations for your business plan, and that keeps things interesting. Your business should feature your focus, your rules, your customers. Your way.

Is the industry pressuring you to drop the break/fix model and fully embrace subscriptions to justify or validate your position as a Modern MSP?  I’ll say it again: One size does not fit all. You don’t have to play by any rules but your own.

Cloud computing is constantly evolving. In order to attempt to keep up, stay credible, and prove that their fingers are accurately on the industrial pulse, MSPs have had to find ways to manage hybrid cloud environments. They’ve also had to either provide their own cloud services or resell other cloud provider capabilities, like cloud-based backup and disaster recovery.

It might make sense for you to have a full-range, eclectic, active portfolio of services to offer your customers. Let that be how you embrace the notion of differentiating yourself from your MSP neighbors—have a bigger, richer bag of tricks to keep your customers happy.

Michael Kraner, co-founder and director at MSPCFO, a financial analytics and consulting company focused on MSPs and VAR IT consulting firms, has this to say: “I’m not sure anyone ever really had managed services at 100% revenue. I think there are many people who still have clients on the old break/fix, time-and-materials model.”

We all know that the break/fix model means more work per customer and more profit, and the standard managed services model means less work per customer and thus more profit. These business models, of course, are diametrically opposed. But who says you can only go one way or the other? One size does not fit all.

You need to figure out what works best for you and for your customers, so that you can be the Trusted Advisor they need to keep on hand to help with the issues they don’t know what to do with. The more tools in your toolbox, the wider and broader your reach, and the more effective you can be.

Why not provide a wide array of services that your customers need now, as well as those you can introduce to them when they’re ready to try new ways of doing things in the cloud? Isn’t it about what customers are willing to do, and when, and what services they are ready to pay for?

It’s always good to know what’s trending in the world of the Modern MSP. You always want to be on top of your game. Running with the herd might get you there, but it’s not going to keep you there.

One size does not fit all; it never has. Master the services you want to provide, watch the new service options as they come into play, choose the ones that make the most sense for your business, and be the Modern MSP you want to be.