Making the transition from basic IT support to the more lucrative role of Managed Service Provider (MSP) isn’t always as easy as it seems. Achieving growth from there can take even longer. So why, with automation becoming such a mainstream accepted tool in the IT world, is becoming a successful MSP so challenging? We thought it might be helpful to uncover some of the most common challenges hindering MSP growth and, more importantly, what can be done to overcome them.
Challenge #1 – Being Too General – Many managed service providers out there that are struggling to achieve growth and ongoing success are missing the mark because they’re not positioning themselves as the gurus they truly are. Obtaining the appropriate certifications and credentials and honing your individual service offerings is key. Additionally, selling these services either by competency or by vertical can boost business tremendously and increase the amount of revenue you could be earning.
Challenge #2 – Not Differentiating from Break/Fix IT Support – The main driver keeping this barrier in place is fear. Many IT pros want to transition to selling managed services, but they hesitate for fear that they’ll lose some of their customers. In reality, not every client is suited for a managed service provider vs. break/fix type of support. But while you may, indeed, lose a small segment of business, you will gain it back and then some over time. Understanding and accepting this fact can help overcome the uneasiness and make the shift a little bit easier to make.
Challenge #3 – Underpricing Themselves – Switching from fixed price and/or cost plus pricing to a more realistic and profitable pricing model can be challenging, particularly if you don’t fully understand the true value of your services or, more importantly, how willing your customers are to pay what you’re worth. If you’re undervaluing and underpricing yourself, you will not be able to realize growth. In fact, you may even price yourself out of the industry all together.
Now that you know what may be standing in your way, here are a few helpful tips for overcoming these common barriers to growth:
- Evaluate your existing business plan and MSP strategy, the strength of your software, and the skills and abilities of your team members.
- Leverage technology and tools, such as automation, to buckle up your service delivery and make it much more efficient.
- Keep a close eye on the market and your finger on the pulse of your customers to recognize and capitalize on trends and opportunities.
- Develop and foster specialties by obtaining certifications, etc. in areas where your customers are.
- Assess and modify your pricing model to ensure that it properly supports your level of service.
- Establish a specific goal (i.e. 20% growth in 12 months) and develop a strategy for achieving that goal over the designated time frame.
Making the shift from one-off, break/fix IT support to a qualified, highly sought after Managed Service Provider isn’t as difficult as you may think. By understanding what factors might be hindering your ability to change and grow and applying the above advice for overcoming those obstacles, you’ll be well on your way to securing your position in the profitable MSP world.