One of the biggest benefits of being a managed service provider (MSP) is the consistent income that comes with it, smaller businesses and entities will always need to outsource areas, and many resellers have shifted into the lucrative business model specifically for that reason.
However new business comes with fresh challenges and difficulties, which can leave MSPs scrambling to acquire new customers for their business. In that scramble, many make mistakes, and if you find yourself scratching your head and looking for answers, you might be making some of these errors yourself.
However, as you strive to position yourself as a valuable MSP, it is important to think about the steps necessary to making this happen, including setting prices and establishing a reputable identity. We have outlined four top tips that will help you think about the best way of establishing yourself as an MSP.
Tip #1: Define your offering and establish an identity
Many MSPs make the mistake of trying to offer a little bit of everything so they can attract as many new customers as possible. In the process, they stretch themselves too thinly and, instead of providing a few high-quality services, they offer a wide range of mediocre ones.
This happens more with smaller MSPs that don’t have the resources or staff to support multiple services and as a result, they fail to establish an identity.
Niche markets exist for a reason, and many MSPs thrive and grow by focusing on a specific part of managed services, such as monitoring, patching, or network management. That’s not to say you should only offer one service. Instead, you should examine the market to determine the types of services you think would work the best both now and for the next few years.
A good way to do this would be to find a cloud-managed network solution that allows you to choose the services you’ll provide today, but that also offers you the flexibility to shift and incorporate new services if needed.
Tip #2: Get the pricing right
Compared to one-time sales, monthly contracts offer the security of regular income. However, getting the pricing right is vital.
If you price your services too high, you risk losing your customers to competitors. If you price them too low, you’ll end up hurting your chances of making a profit each month, ultimately preventing your company from growing or even staying afloat.
Many MSPs make the mistake of assuming that price is the ultimate deciding factor for their customers. However, serving a niche market and doing it better than your competitors makes your services more valuable and people are willing to pay more for a good experience.
To successfully position yourself as an MSP, think about pricing your services where you’re comfortable with them and sell your MSP on the value it provides rather than the price.
Tip #3: Focus on the essentials
At the centre of your business are the products you use to provide your services. Some choose to buy the basic hardware and then develop their own software to sell to their clients, others choose to resell third-party services as part of their line-up.
Part of reselling solutions is having to choose which products and features you want to offer. Newer options with the latest technology come with a higher risk and reward. Older, more reliable options can limit the scope of what you can do.
Many MSPs make the mistake of going after high-end solutions before the market demands them, hurting their revenue and drowning their business in debt. On top of that, the first iterations of technologies and products are often glitchy. Using these to handle your customers’ business puts their network at risk, which could ultimately affect your business, too.
Scalability is also a concern, if your client grows or expands, the cost to you and, more importantly, them, could be too much to handle, leaving you both with too little cash in your pockets to move forward.
Evaluating what you offer as an MSP and focusing on core solutions that have the flexibility to scale with the potential growth of your customers’ business, will allow you to accommodate change and growth more readily.
Tip #4: Pick the right payment system for you
When you resell products as a one-time or by-project service, payment for the services usually takes place once the customer commits. However, relying on your customers to pay their bill consistently and on time is rarely straight forward.
No matter what the cause is, when you’re providing monthly services and have your pricing adjusted to reflect that, your ability to do business is dependent on your customers’ ability to pay on time. One late payment here and there might not be too much of a problem, but consistent late payments from multiple customers could severely inhibit your ability to do business.
To get around this financial inconvenience, consider implementing an automatic payment processing system for your customers that helps remove the cost of human error and facilitates the process to ensure payment occurs as fluidly as possible as well as on time.
One Final Note
You’re going to mistakes. We all do. How you respond to them and what you learn from them will determine what happens to your business.
Let us know what challenges you’re facing and the goals you hope to accomplish, and we’ll let you know how we can help.