The as-a-service model was booming in 2017, and interest will likely only continue to increase in 2018. Subsequently, opportunities within the managed services landscape continue to grow, and so does the competition. So as you plan your MSP business, you need to be prepared.
As you begin the planning stages, here’s a list of key considerations as part of starting a successful MSP business.
1. Know your market
Dozens of different services and responsibilities can potentially be taken on by managed service providers. These may include:
- technical support
- data processing
- setting up hardware and software
- setting up and maintaining the Internet connection
- secure cloud backup services
- custom script development
- and more
Find out what services are in highest demand in your area and decide what you’re going to offer to clients accordingly.
2. Shape your MSP offering
Next, take the time to decide what service will make up your unique selling proposition.
There are already many players in the MSP market, and most companies offer conventional services. The only way to beat the competition in an even playing field is to lower prices and give discounts — but that will only get you so far. If your prices are overly competitive, your profits won’t cover your expenses.
The best way to stand out among your competitors is to thoroughly think through your strategy and offer your clients something unique that no one else can offer. For example, you could offer a guarantee for services, or set up a specific timeframe for certain services (including rush requests).
Handling certain routine tasks manually may be fine if you’re managing just a few machines. But as you grow, more automation will be necessary. At some point, you will need a remote management platform and managed backup software for secure backup service.
Research the market and prepare your IT infrastructure beforehand. (Keep in mind that it may be difficult to find an RMM that can be properly integrated with all the software you manage, so get ready to spend some time on this.)
4. Determine your pricing strategy
Should you charge your clients per device, per user, or offer tiered pricing? Deciding on a pricing model before you dive into this business is crucial. Each has pros and cons; pricing that is suitable in one situation may not work in another. (For help, check out our article about managed service provider pricing models.)
5. Right team for the job
Once your pricing is set, it’s time to hire people who will do the job and help your business grow.
When hiring people for IT support, it’s better to find people who have stayed up-to-the-minute in the field. (They require less training.) However, specialists require higher salaries. If necessary, consider hiring people with less experience, but with the ability and desire to learn. Create an environment that encourages learning and growth. Be willing to share your own experience with your team.
6. Get leads and close sales
After you’ve lined up all the required components for a successful managed service provider startup, the last step is to get your first clients. (You might want to read our article on lead generation for managed service providers to learn more.)
Be aware that it can take time to turn potential leads into clients. In addition, you don’t need to see every opportunity as a sale that has to close. An average MSP contract is about $2,000 per month. Consider your goals and strategize accordingly.