The amazing technologies driving the incredible expansion in the MSP business can often make it feel like things are different when it comes to running your business. The reality, however, is that the core concepts are the same as any business.
The ability to innovate is vital today, especially in the managed services sector. However, for other areas of your business, there is no need to reinvent the wheel; it pays to stick to principles. Here are five core concepts worth focusing on:
1. Give Customers What They Want First
It really doesn’t matter what you’re selling, always give the customer what they want first. Yes, you can then move onto products you believe are what a customer really needs, but first, you need to make them a customer. To do that, you need to give them what they want.
Of course, to a certain extent, you can shape a prospective client’s expectations. And in an area as technical as the MSP business, an engineering dialogue will generally be required to ensure your understanding of a client’s wants and needs are accurate, but when all is said and done, the client is paying the bill so the client gets what the client wants.
2. Deliver on Promises
Once a client has signed on the dotted line, make sure you always deliver on your promises. Part of ensuring you deliver on promises is making sure the client understands the promises the way you think you’ve presented them. So, take the time to ask questions that can reveal if a client’s understanding of your deliverables is different to your own.
3. Maintain Cash Flow
After you’re winning sales and happy, here comes the hard part. I know, you would think the hard part is making those sales. In reality, however, the hard part is achieving and maintaining a healthy flow of cash. It doesn’t matter how much revenue is flowing into your company if your costs are too high.
Inadequate cash flow is a leading cause of failure, especially among young businesses. Even older, established businesses can be undone by cash flow problems, typically during times of rapid expansion.
So, while you’re focusing on building up sales, keep a very close eye on managing your organization’s cash position. Steps you can take to strengthen cash flow include:
- Ensure your product pricing is accurate – be wary of pricing too low just to win sales.
- Collect receivables ASAP – avoid 30-day and 60-day terms as much as possible
- Give clients incentives to pay earlier or up-front
- Reduce costs – find ways to cut costs, expand with minimal cost increase or incentivize employees to reduce costs
- Maximize the profitability of existing investments
Set clear objectives; the success and effects of which can be clearly determined and quantified. Establish a clear plan with actionable steps that will achieve these objectives.
Remember, a plan is simply a basis for change. Things change, and it might not be possible to stick to your existing plan, so focus on fulfilling your plans, but be prepared to change them. Conduct regular, periodic reviews of your objectives and plans to ensure they remain relevant. Build an organizational culture with a flexible mindset and readiness to embrace change.
As you may have started to realize while reading through this article, communication is a cornerstone of success in business. Effective understanding of a client’s wants and needs, clearly communicating deliverables to the client, communicating your business objectives and plans to all of your organization — these are all vital components in a healthy organization.
The list above is by no means an exhaustive exploration of vital concepts in a flourishing MSP business. It does set a tone, however. Take the points presented above and explore them. I’m sure you’ll find other ways to adapt and apply the mindset underlying these concepts in ways that will help you expand and thrive in a sustainable way.