Enterprise Fuel, Part 1: The Virtuous Growth Cycle
BY IT GLUE | July 17, 2020
Any small business bigger than a hot dog stand needs technology to thrive – though for that matter, even a hot dog stand needs a solid Instagram game. This increasing reliance on technology means that SMBs are driving demand for managed service providers, so much so that the MSP industry is still growing despite all of 2020’s challenges.
While the MSP space has traditionally been a diffuse collection of small players, the biggest companies in the space are now becoming substantial in their size. Though there’s certainly more than one flavor of large MSP, they do tend to have certain features in common. In particular, the next gen MSP is focused on process and efficiency. They use this efficiency to deliver a high level of customer service, consistently, and at a lower price than most of their competitors can offer.
It’s a virtuous growth cycle – when you have better service at a lower price, you attract more clients. With more clients, you invest in better tools and processes, and build efficiencies that allow you to scale substantially. This allows you to drive down your price and improve service delivery even more. Businesses have always grown this way, as it’s the path to building an unassailable market position.
Over several iterations of the virtuous growth cycle, with due attention paid to improving processes and re-evaluating tools, an MSP can go from mom-and-pop to small shop and all the way up. The increasing complexity of IT needs of SMBs, especially in domains like cybersecurity and compliance, means that even larger SMBs are finding benefit from managed service providers. An acceleration in this trend – possibly driven by a large-scale shift towards remote work – means that the ceiling for MSP size and profitability is higher now than it ever was before.
Thus, the processes and tools that drive you to grow aren’t just nice to haves – they’re your enterprise fuel.
Over the course of the next few weeks, we’ll start to map out what this looks like for today’s ambitious MSP. The constraints to growth in the MSP space are really starting to come off, since more capital and talent is flowing into the business than ever before. We’ll talk about this concept of enterprise fuel, and what steps you can take today to get into a virtuous growth cycle of your own.
