Your MSP business can have successes, but any success is built on some quotient of failure. Usually, the larger successes only happen after big failures have paved the way. Until you understand fundamentally what’s at stake, you’re less likely to make the right choices. That said, there are things which can, and should, be avoided. Following, these considerations will be examined with an aim at helping you see where the issues lie and how you can combat them with a little forward strategy. These considerations include:
- Expanded Expenses and Flexibility Contraction
- Overhead Synchronicity and Organization
- Challenges as Pertaining To Acquisition and Management of the Right Employees
Expanded Expenses and Flexibility Contraction
As your business moves forward, there is a level of flexibility which will be lost even as expenses expand. For example, you start providing clients in the smart manufacturing industry IoT devices which are designed to provide proper data for the optimization of their production. Such provision will require you to work with vendors as a sort of middle-man between you and your client.
If your client doesn’t use you in any support capacity, then what sense does it make for them to pay your MSP extra when they could just buy straight from the vendor? This realization can and will happen if you’re not rigid in your contracts and service provision, but that rigidity makes it less possible for you to take on certain clients that could, and would, be lucrative for your business.
A necessary balance must be sought and employed, and it can take time. A generally advisable way for your MSP business to proceed in this regard concerns slow expansion which reaches sustainable levels of service provision before branching out to subsequent ones. This is easier said than done, but it is doable.
Overhead Synchronicity and Organization
Your overhead expenses are going to shift and expand as your business does. You want synchronicity to define this expansive shift. You don’t want it to be unpredictable. Again, this is easier said than done. Sometimes you’ve got to spend a few thousand on a client that will represent steady income going forward, but in doing so, you may have to take out a loan.
Organizing your overhead can be additionally nightmarish because simply put, you don’t know what you don’t know. Your best bet here is probably going to be to “ballpark” it. You want to estimate where things would go, then allocate budget at a slightly increased sum from that estimate. This will make it so that if something comes up even within that projection, you’re set to manage it.
Finding and Managing the Right Employees
By and large, your most important investment will be in the employees who make up your organization. You want smart, savvy, passionate, dedicated personnel who are worth the benefits and paycheck.
You want to hire carefully. Have a suite of questions prepared and ensure that you interview multiple candidates even if the first one who walks through the door seems to be more qualified than anyone else in your list of meetings for the day. It’s the same principle with house shopping, car shopping, boat shopping, plane shopping, or anything where a large investment must be continuously nurtured to retain profit.
Additionally, you want a profit projection for employees. How much did it cost to hire and train them a, how much do they draw, and what do they bring to your company? Employees should, at a minimum, be kept on long enough that they bring profit. From there, whether or not the employee is any good will define whether or not they should remain.
An MSP business that streamlines operations so that overhead is properly synchronized, employs of the right kind of people who are acquired and worked with until investment in them has matured, and employs tactics in a way that flexibility can be metered by proper expansion over time is an MSP likely to see profitability. Strategically approach operations, and you’re more likely to profit!