In the ever-evolving landscape of technology, businesses increasingly rely on managed service providers (MSPs) to maintain, optimize, and secure their IT infrastructure. As MSPs play a critical role in the success of modern organizations, the need for a structured approach to their selection becomes paramount.
This checklist can serve as an indispensable tool for businesses getting into the managed services business to understand if they have covered all business nuances that they should have as an MSP.
The checklist if you are starting out as a managed service provider business
1. Have a proper business plan
In any business, it is essential to have your business plan chalked out. The same rule needs to be applied when you are starting an MSP business.
- Keep in mind your business goals and mission
- Your target market, including location, industries, types of companies, and size.
Managed Service Providers should have a business plan in place, considering the demand for MSP services in the chosen market, as well as the competition present.
After analyzing the target market, MSPs should have a business model in place, along with the appropriate pricing for the services. Some MSPs also provide packages with varying service bundles and price ranges. The business model can include the number of contracts needed to ensure that the services are adequate. Having an idea of your clientele’s interest will help you deduce your stability in the market.
As a good Managed Service Provider, have all your documents in place to chronicle the processes, the plan, the growth, etc. of the company, thoroughly. This will not only help you understand your business trajectory but will allow you to explain what you do to your employees as well as future investors and define the target market and the industries you plan to serve.
2. Define your service offerings
The MSP should be able to explain the nature of its business and the services it will offer. Whether you’ll be providing cloud services and cybersecurity, or your service offerings will include remote monitoring, helpdesk, data backup, and IT infrastructure consulting, all the details should be documented clearly.
The MSP company must establish the costs and capacity needed to validate its business model based on the number of users or endpoints it can manage. Proper Service Level Agreements (SLAs) should be established, and the preferred tools and vendors should be mentioned.
It is always a good move when MSPs emphasize and render a unique value proposition to its services that sets the MSP apart from competitors.
3. Cover all legalities
A business that is compliant with industry standards and properly licensed helps increase its credibility and add value to its services.
- Make a note of the legal structure of your organization, such as sole proprietorship, partnership, LLC, or corporation.
- You should be registered with the appropriate government authorities, should have the necessary licenses and permits, and should comply with all relevant regulations. A proper business structure (e.g., LLC, corporation) and its legal considerations should be well documented.
Various certifications like ISO, ECMA, CMMC, etc. help your customers understand your products and management quality standards. Multiple vendors like Amazon, Cisco, Google Cloud, and Axelos provide these certifications.
4. Get insurance
A good MSP should have the appropriate insurance coverage, including general liability insurance, professional liability, property insurance, and cyber insurance in place. You can also offer cyber insurance to your customers as an additional service. Your insurance coverage will help your customers understand how you will handle cases like ransomware attacks or major outages of cloud-based services affecting their businesses.
- For the well-being of the employees as well as the firm, you should invest in workers’ compensation and employment practices liability insurance.
- These policies should not only cover any accident and injury caused at the workplace but also protect against incidents like breach of contract or risk of false allegations.
5. Acquire technical expertise
A business is as good as its employees. And this is especially important for an MSP.
- A group of qualified and skilled experts will ensure that product performance is top quality and compliant with industry standards, which will in turn help you boost your MSP business revenue growth.
- As an MSP, you should also have strategies to train and upskill your existing staff by obtaining relevant industry certifications and vendor training. This will improve the team’s skillset and enhance your credibility with your customers.
6. Have the right tools and technologies
Another essential ingredient for a successful Managed Service Provider business are the tools at hand. The company should have the necessary hardware and software tools for service delivery and ensure that the quality is impeccable and constantly upgraded and updated.
- An MSP business is entrusted with client data that is highly confidential. A robust security system and maintenance policies should be present to protect customer information against cyber-attacks, security breaches, and infrastructure outages.
- You as an MSP should be able to provide ample backup in the event of infrastructure failure or cyber-attacks to ensure zero disruption and business continuity for your customers.
7. Make relationships with distributors
An MSP depends on distributors to provide it with the software and hardware as well as for a lot of services it provides. Thus, you need to have a reliable set of software and hardware distributors to expand your business. Some vendors like Acronis specialize in security and will provide the best software in the cybersecurity market. And others like RackNap will arm you with a marketplace and subscription business management software for automation of complete customer lifecycle.
You should also be an active participant in communications and training activities by distributors. This will help you to stay informed about new opportunities and skillsets needed to stay updated on the latest technologies.
8. Delight your customers with personalized services
It has been long established that the customer comes first. Making sure that all the needs of your clients are met is a sure-shot way of ensuring customer retention as well as business growth.
- Establish email and messaging accounts, set up a phone system and offer free calls for customer support. Implement auto-response for after-hours to be a reliable and competent Managed Service Provider. These measures will create a trust factor that your company will not leave its clients in a lurch during an IT fire.
- You should also document customer service procedures and train your team to solicit referrals and positive reviews.
- You should have well-defined metrics to measure service quality and detect early signs of decreasing service levels.
- A CRM solution should be in place to manage customer data and interactions, build customer profiles, and facilitate better conversations, tracking the history of interactions and contracts.
- Implementing a reward program for new customer acquisition as well as good performance are some tactics used by lots of MSPs to ensure customer retention and incentive for the sales team to perform better.
9. Focus on marketing activities
Marketing is essential to all businesses.
- Quality MSPs create a professional brand identity, including a logo, website, and marketing materials, all of which are ways to market your business.
- A messaging document to highlight your unique selling points and expertise and a website that showcases credentials and case studies, and active social media accounts are all positive signs that you allow customer engagement and have a strong presence online.
Competent MSPs will not only have an online advertising setup but also consider offline marketing channels, join local business communities, attend relevant events, host webinars or events for small business owners, and encourage customer referrals to stay relevant and stand out in the crowd of competitors.
10. Network to increase your worth
A person’s net worth is their network, and the same concept applies to businesses as well. MSPs should have a network of partners to deliver services that it doesn’t offer, establishing a referral network with other companies. A good MSP will join industry associations, attend conferences, and participate in local business networking events.
11. Craft a compelling growth strategy
The evidence of the success of a business lies in its expansion and growth. Look out for partnerships and mergers that will amplify your services offering and allow you to tap into various markets and specializations.
Having timelines and deadlines for the business is an indicator of a company that likes to stay on the right track and is driven to give its best to the operation.
12. Have a contingency plan
Lastly, all businesses come with risks, be it the market, the country’s economy, war, or even natural disasters, having a risk mitigation plan in place is a sign that your MSP business will weather most storms.
For a business to thrive, it needs to constantly evolve, accommodating all the changes the current market is going through, as well as preparing for future possibilities. An MSP too needs to constantly review and update its plans and offerings to assist the growth of customer business.
It is also a good idea to seek feedback from industry experts, clients, and mentors. This will help you streamline and refine your MSP business plan thereby improving your chances of long-term success as a managed services provider.
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