Most MSP business owners begin their careers targeting small to medium businesses. They do this for a number of reasons. Sometimes, they want to keep their clients in a local or regional area. Other times, they feel that these are the size of businesses that most need their services. While this is a good way to start out in the business world and helps you work out any kinks in how your MSP operates, there may come a time when you’re ready to go after some bigger fish.
Going ‘upmarket’ is the term for setting your sights on larger, enterprise businesses as your target clientele. While this can result in higher revenues, more prestige, and a faster-growing business, it can also involve plenty of pitfalls. Are you ready to take your MSP upmarket? Here are some signs that your team is on the right track to target bigger prospects:
You Have a Cohesive Team That Works Well Together
How long have your current employees been with your MSP business? While almost every company will have some inevitable turnover, it’s important that you have a core group that’s loyal and have learned how to best work together. You may see some minor players coming in and out of the picture, but for the most part, your main managers are in it for the long haul.
If you’re still experiencing growing pains and haven’t developed a core team yet, you might not be ready for the big leagues.
You Can Survive a Longer Sales Cycle
Selling to local small businesses usually means a relatively short sales cycle. You meet a prospect at a networking event, learn more about each other, and find out they’re in need of your services. Many times, you can get the deal closed within a week or two.
This isn’t the case with large enterprise prospects. The normal one-to-two-month sales cycle you’re used to could easily expand to six months to a year or more. Do you have enough in the bank to handle this longer sales cycle? Are your salespeople prepared for a lot of leg work with no immediate results? If so, it could be time to make the move.
You’re Willing and Able to Customize Your Offerings
Enterprise businesses have different needs than their smaller counterparts. To attract and win their business, you may need to have more security or have customized features that aren’t currently part of your service.
Are you prepared to change the services you offer depending on what larger clients need? Do you have the development team in place that can facilitate these changes? If you’re more comfortable sticking with your current plans, you might not be ready to upmarket.
You’ve Got a Big Enough Marketing Budget
Marketing to small businesses, if done effectively, can be relatively inexpensive. Join a few network groups, run some Facebook ads, and get to know the right people and this could be enough to keep you busy.
Enterprise businesses, however, expect a bit more. You may need to implement inbound marketing strategies, run national campaigns, and invest more money in your website and SEO. This isn’t cheap, and you need to make sure you have the money in your budget to do it the right way. If you’re not comfortable with spending quite a bit more on marketing efforts, you may be better off in the SMB market.
Your MSP business might be ready to take the next step and target larger, enterprise businesses that will fuel growth. If you’re considering going upmarket, make sure you have the right pieces in place to do it right.
