IT services are an area of major opportunity today. Invigorated by activities in the SMB community over the last two years (and more), including the pandemic-inspired shift to remote work and rising concerns over cybersecurity threats, the MSP model is stronger than ever. With more companies looking to outsource a greater part of their technology needs due to greater business needs, skills shortages and rising IT wages, the potential profit opportunities appear to be everywhere, with industry forums and channel event discussions reinforcing that good news.
The escalating demand for proficient tech professionals should keep experienced MSPs busy for quite some time. Unfortunately, those same market forces driving the high demand are also working against IT services business owners.
The ongoing supply chain issues and hiring difficulties that drive interest from prospective clients may also limit revenue and profit opportunities and create a number of other problems. MSPs without efficient processes and sound business practices in place may struggle to keep pace with competitors and maintain the level of profitability needed to grow. A desire to support additional business prospects means nothing without the resources, willpower, and planning abilities to make it happen. Building and following a well-crafted strategy improves your chances of success.
Reexamine Business Plans
The business environment significantly changed. Consequently, your MSP may need to develop a new strategy or, at a minimum, reevaluate your current approach. Continuing to build from an outdated (or now broken) premise will likely result in a disappointing outcome. Every business owner needs to “check-in” periodically to see if their original mission and objectives, the reasons their plans were first constructed, are still intact. If not, it’s probably time to revise or redraft your plan and adjust your goals.
Sometimes the best way for a business to move forward, especially when sales are strong, is to take a step back and look at all the key factors that may have changed over the past year or two. Evaluate what’s working and what’s not. Determine if specific current activities should change or be eliminated altogether.
Growing an MSP in today’s challenging business environment requires more planning and effort than ever before. However, the opportunities for scaling IT services sales and monthly recurring revenue are also at an all-time high, creating the ideal situation for fully staffed and enterprising tech organizations.
Consider the following when evaluating if your MSP needs to devise a new strategy or revise its existing plans:
- Client support needs. Have changes shifted their priorities and requirements over the past couple of years—like work from home (WFH) and the growing adoption of cloud solutions?
- Technology changes. Your clients may need (or want) more advanced systems and applications than you currently provide. Many MSPs are adding high-level cyber threat protection solutions to their portfolios to reduce the risk of ransomware attacks, and IoT-driven technologies to control energy costs. And offering a secure payment technology will help your clients mitigate payment processing vulnerabilities and cybercrime risks.
- Economic conditions. Shifts in the economy (and business spending) can have a major impact on IT budgets (and your ability to drive solid margins). Offering cost-effective and productivity-improving options is a good way to change the technology narrative from “expensive services” to “wise investments.”
- Buyer landscape. Have clients’ decision-making processes changed? Are the same people in place, or are there new methods and influencers in the mix with different preferences? What seems like minor changes can significantly impact MSPs’ ability to sell additional services and grow wallet share.
- Internal efficiencies. Sometimes internal inefficiencies are the bottlenecks that prevent or stymie growth. Especially when an MSP is on a growth trajectory, hiring or employee retention issues can cause slowdowns and result in poor customer service and service delivery or even delayed payment. Process efficiency and automation may not cure every ill, but those steps can reduce pressure while improving margins. MSPs that are more operationally efficient capitalize on the right technologies, integrations, automations and best-practice methodologies.
For example, MSPs who leverage full-cycle billing automation have an easier time collecting payment and achieving healthy cash flow to afford additional tools, resources, or staff to scale.
- Talent pool. The ongoing shortage of qualified technicians, sales professionals and other skilled (and non-skilled) workers may be one of the biggest threats to MSPs’ growth objectives. Developing a strategy to enhance your firm’s image as a top-notch workplace is a great place to start. With an increasingly competitive environment for skilled talent, especially in the IT community, MSPs need to ramp up recruitment efforts and reevaluate compensation packages. Are wages, benefits and workplace policies aligned with prospective employees’ expectations? Better yet, can they attract experienced professionals from outside the normal talent pool?
Is your firm positioned to grow?
Can you provide high-quality support for an increasing number of clients?
Does your firm utilize the right technologies for its internal, administrative practices to keep overhead costs low and to keep up with a larger client base?
Expanding portfolios and increasing wallet share while onboarding new customers offers the best of all worlds—driving more revenue and tightening key business relationships. Those situations help increase client retention and long-term MSP success.
ConnectBooster helps MSPs achieve healthy cash flow that supports adding tools, resources, or staff to scale. As you examine your growth plan, position your MSP to scale by optimizing your billing, collections, payment processing and invoice reconciliation processes with an all-on-one tool that will save you time and money. Get pricing and learn how you can achieve healthy cash flow with ConnectBooster.