Quality IT specialists are hard to come by, especially for small businesses without large budgets. Because of this, many small and medium-sized businesses (SMBs) turn to managed services providers (MSPs) to meet their IT needs. The managed services market is slated to be worth around $242.4 billion by the end of 2021. If you’re ready to start your own MSP business and get a piece of that revenue, here are a few steps you need to take.
Steps for starting your MSP business
- Get the right training
- Focus on one sector of business for your MSP
- Find tools and software to help you
- Don’t try to do everything yourself
- Aim for slow, sustainable growth for your MSP business
Get the right training
Before you start your MSP business, you should enroll in sales training. Even if you won’t be doing the sales yourself, sales training will allow you to recognize qualified salespeople when you’re hiring. Hiring a sales manager without knowing anything about sales yourself is incredibly difficult because you don’t know what you should be looking for.
Additionally, you may need to draw in a couple of clients initially before you start hiring salespeople. Sales training can give you the necessary skills to do this. It can also improve your networking skills and help you gather leads and referrals, even outside of formal meetings. Formalized sales training is great, but you should also find books, podcasts, and blogs to help you learn how to sell effectively.
Focus on one sector of business for your MSP
Managed services providers are a lot of things to a lot of different businesses. They can be HR, accounting, IT, and much more. When you’re starting your own MSP business, focus on a single sector and maybe even narrow that down to a sub-sector. For example, if you’re looking at handling IT, you might want to focus on one aspect of IT like cybersecurity or cloud operations.
Focusing on one sector allows you to become an expert, rather than spreading yourself too thin. Figure out how you can differentiate yourself from potential competitors and concentrate your efforts on filling that niche.
“Determine your whys,” advises Glen Combs, founder of SDGBlue (acquired by Crowe). “Why would I want to do this? Why would someone want to do business with my company? Why will I be successful in a field that has significant competition?”
Also read: Best Practices for Effective Cloud Control and Cost Management
Find tools and software to help you
As a managed services provider, your customers will expect you to have top-of-the-line tools and software to support their businesses. While this may be an expensive initial investment, it will pay off in the long run by offering more functionality and resulting in more satisfied customers. Some vendors let you act as a value-added reseller (VAR) on their behalf, allowing you to reduce your own costs and make a commission.
The type of MSP you want to start will determine what kind of software you need. For IT managed services providers, you’ll need security information and event management (SIEM) software, remote monitoring and management (RMM) software, and IT management software at a minimum. You might also want to consider endpoint detection and response (EDR) tools, identity access management (IAM) software, and threat intelligence software.
Don’t try to do everything yourself
When you’re just starting out with your business, it can be tempting to try to do everything on your own to save money on hiring costs. However, this is a guaranteed recipe for burnout and will keep your business from being as successful as you want. While you may not have the capital to hire full-time employees immediately, consider hiring freelancers, part-time employees, or paid interns to handle tasks like marketing, accounting, or customer service.
When divvying up tasks, keep the things that you do best and offload as much other work as possible. You need time and space to be able to focus on growing your business, rather than working late into the night parsing out spreadsheets. While it can be hard to relinquish control, it will pay off for your business in the long run.
Aim for slow, sustainable growth for your MSP business
It may seem like growing as fast as possible should be your goal. However, with the level of service you’ll need to provide as an MSP, you should aim for slow, sustainable growth instead. If you grow too quickly, you’ll find that you have more clients than you can handle and will inevitably provide lower quality service than your customers are expecting.
Be intentional about your growth and hire proactively to ensure that you can meet or exceed your service-level agreements. With the right training, tools, and people, you can create a successful MSP business and keep your clients happy.
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