Q1 is almost over and it’s time to take a little pulse check. If you started the year with a set of goals, now’s the time to start thinking about how you’re doing. Establishing a regular, quarterly cadence to review your business is critical to maintaining positive momentum.
The first quarter of 2020 has seen a more challenging macroeconomic environment than prior quarters. While the last half of 2019 saw 2.1% GDP growth in the US, Q1 2020 very well could fall short of that. The coronavirus has suppressed economic activity in many countries around the world, and nobody should be surprised if it happens everywhere else, too.
Still Big Opportunity
While SMBs might be tempted to curtail IT spending due to economic uncertainty, the need for investment in cybersecurity, backup and recovery, and compliance is actually increasing. This is absolutely NOT the time for a small business to spend less on these critical IT functions. Ransomware attacks continue at a rapid pace, and new compliance laws like CCPA and the New York Privacy Act (which will likely pass) raise the compliance stakes significantly for SMBs.
For MSPs, of course, this means opportunity. Leading vendors are upping their security, compliance and backup offerings, and quite frankly these should be standard for any MSP. IT Glue’s most recent Global MSP Benchmark Survey identified these offerings as the most important opportunities in the channel today.
So, what happens if the economy really does start to falter? This is why you should get your clients on term, and yourself as well. Term contracts mean cost and revenue certainty. Your clients might talk about delaying hardware upgrades, but the fundamentals like monitoring, upgrades, service desk, security, compliance and backup should not be subject to delayed spending. If your clients are on term contracts, that monthly revenue is locked in.
This same principle applies to your costs as well. When you know how much you’re going to spend each month you have more control over your margins. Fluctuations in the business cycle are less likely to represent an existential threat to your business.
A Few Final Thoughts
You’ve got targets for revenue growth and cost containment. If you’re not yet meeting your revenue targets, look to the revenue streams that aren’t going to be adversely affected by the business cycle. On the cost side, keep thinking of ways to save money. Unemployment is still very low – 3.6% overall in the US, and much lower for tech talent. So you will need to get the most out of your team. Give them the tools they need to be more efficient, so that you can contain labor and operating costs. Yes, sometimes you have to spend money to make money, but saving money in the long run is exactly how you handle economic uncertainty, and meet your strategic objectives regardless of overarching economic conditions.
IT Glue is one of those investments that helps you save money, and these savings are achieved almost immediately. As if that weren’t enough, we can also offer security, compliance and backup products from our partners that will help you generate revenue by tapping into IT spend growth areas.
So take a quick look at our demo as a starting point, and get your MSP on track for the 2020 you envisioned at the start of the year.