Let’s face it. At the end of the day, you’re in business to make money. What you need it for – to provide for your family, secure your retirement, travel the world – that’s up to you. But you can’t do any of those things unless you make the money in the first place. IT Glue’s VP Product, Luis Giraldo, ran a 2-person MSP making $1.2 million, and this blog series will highlight some of the lessons he’s learned along the way about making money in the MSP game. Here’s part 3:
Understand customer value
What is the value of your business to customers? As an MSP, your service goes beyond crushing tickets. Your value to your customer is to help them solve their business problems. If you are doing that, and driving change for your customers’ bottom lines, then you are providing value that they are willing to pay for. Remember: your clients’ success is your success.
To maximize your profits, you need to increase your revenue and lower your costs. Set goals for how many seats you want to sell and make sure you follow through with these deliverables. Cutting unnecessary waste and focusing on increasing productivity will help save you time and money. Increasing your margins will not only increase profitability, but position your business to be more scalable going forward.
Manage the book of your business
Churn is evil. It costs a great deal more to acquire a new client than to keep an existing client happy. So, keep tabs on your customers and the services they are paying for. Do you see room for any upgrades? Keep in mind the potential for cross-selling and upselling of seats. But don’t sell them stuff they don’t need. Look for things they do need but aren’t yet buying from you.
Make customers accountable
Just like customers rely on you to deliver, they need to be accountable too. Ideally, you should have no accounts receivable and no outstanding credit – this only creates unnecessary risk. Make a deal with your clients and outline the payment details in your contract agreement. Ask for payment upfront and be strict about it. Whatever you do, don’t provide your services for free or on credit.
IT Glue is a documentation platform aimed at IT professionals. Information is imported from PSA, RMM and other tools into IT Glue, where it is organized for ease of access. Document both hardware and software using automated processes to reduce the time it takes to onboard new clients. LucidChart and Word integrations help you document processes and documents as well. With relationship mapping and a robust search, your team will reduce the amount of time they waste looking for information by 50% or more.