Let’s talk about something that we know you’re all interested in making a profit. Profit is intertwined with every single area of your business, and our friends at IT Glue recently co-hosted a webinar on how to get your MSP business into the profit-making zone, with a huge amount of incredibly helpful takeaways. If you want to check out the full event, here’s a link. In the meantime, let’s look at some of our favorite messages from the webinar, along with how Atera can help you make it happen.
First off, let’s recognize that it’s hard to be profitable!
Just by starting an MSP business, you’ve undertaken an enormous challenge, and you’ve got a lot of balls to juggle to make it a success. This great diagram of five key areas immediately helps us to get our thoughts in order. The Profit-making Zone is in the middle, and it’s made up of five interlinking key business areas, sales, processes, employees, technology, and services. A careful balance of these will get you firmly in the zone.
Choosing the right services – What’s your USP (Unique Selling Proposition)?
It’s really important to understand where your strengths lie. Why do your customers come to you, and how are you better than the competition? The truth is, as MSP services have matured, not many try to do everything, and if they do – they probably aren’t doing everything very well. So think, what areas do you serve best? Those will be the ones that deliver the best profits.
We all have fringe services that we offer, likely shoehorned into a package when trying to woo a prospective client. If you take a hard look at these, you’ll probably see that they are eating away at your profit, because you’re just not set up to offer them, and they’re stopping you from being efficient. That’s not to say that you can’t have multiple focuses, but they need to be aligned with what you can deliver, and complement one another.
Finding the tech stack that boosts profit margins
It’s no surprise that inefficient technology impacts your bottom line. One of the problems with poor technology is that it pushes your users to onboard their own IT solutions rather than what you want them to use. This opens up security threats, adds inefficiencies, and leads to employee fatigue and dissatisfaction. Here at Atera, we offer a robust core tech solution that includes both RMM and PSA, and we also integrate seamlessly with the best third-party tools to offer a resilient solution that checks all the boxes.
This also helps with technology sprawl or disconnect. You want to be working with vendors that align with your own USPs and focuses. If you pride yourself on 24/7 support, but your own vendors only offer help Monday-Friday during business hours, you’re sending mixed messages from day one and this will eat away at your profit.
Getting the right people in the right places
How aware are you of your existing teams’ strengths and weaknesses? Getting more familiar with this has a number of benefits, not least, in helping you to identify new candidates that work for your chosen service areas. This can also support you in building a skills matrix. This can then be used to help get tickets to the right team members, see how best to escalate issues, and even identify where you need to upskill teams for additional demand.
All MSPs are built on a series or network of interlinking processes, no matter how complex.
Regularly check in on your processes to make sure that they aren’t sapping valuable profit, replacing inefficient processes with better ones. One top tip is to make sure that no processes are reliant on a single team member, whether that’s an IT support field technician or the CEO. A single point of failure could be the shortest route to organizational failure, especially in a small company where people aren’t always available.
It’s essential to make sure that all team members have access to workflow documentation, and the ability to solve issues, even outside of their usual area of expertise. That’s where our integration with IT Glue can be so valuable, helping you to develop standardized documentation that can support the whole organization, including knowledge base articles, operating procedures, and support manuals.
Your own technology workflows will either make or break your MSP business. At Atera for example, our Chocolatey and Homebrew integrations mean that you can standardize software installation and updates, even creating specific software bundles for mass or bulk installs. Being able to replicate client provisions easily with small customizations stops you from being spread too thinly, even as you scale up. To make this work, of course, you need to make sure you aren’t delivering bespoke services to a wide array of different types of customers.
Bringing it home with sales
Of course, the backbone of your MSP business will be your sales. This can be split into two key areas, new clients, and upsell opportunities. The first area is about choosing clients wisely. If your sales aren’t equalling profits, you’re doing something wrong. This could be as simple as saying yes to the wrong customers. It can be tempting to take on every single prospect, but this will only end up in you spreading yourself too thinly, and failing to excel at your core services, as described above. Don’t be afraid to be choosy! Think of it as safeguarding your margins, and remember, if the client isn’t right for you, then you’re not the right fit for them, either.
When it comes to existing customers, take every opportunity to show them the value that you’re bringing to the table. From monthly reporting, (as simple as sharing a PDF from inside Atera), to bringing easy wins to quarterly business review meetings, put the data behind your conversations.
Atera’s Network Discovery software is a fantastic example of how all of the interlinking key areas can drive profits. As a part of your core technology as an MSP, it helps to drive efficiencies, giving your employees one dashboard where anyone can see upselling opportunities at a glance. It becomes part of your customer process, a way to start a conversation with the customer about what they’re missing and the benefits they’ll see from saying yes. It also proves how you’re constantly working to add value to their business, a practical way to show that you’re adding services that make you more valuable than the competition. And of course, with a financial breakdown of the profits that you could be making – it’s directly linked to physical sales.
Eyes on the prize
Aligning these 5 key areas is a fast-pass to the profit-making zone. Which one do you struggle with the most? Let’s talk about how we can make that easier, and boost profits for your MSP business.