What if you could finally achieve your dream of starting a successful business? Many of us dream of breaking out from the pack and starting our own business. However, there is always the risk that your business will fail and you’ll be back submitting job applications. The key, then, is to start a business in a growing sector. And what sector has shown more growth in recent years than IT? By becoming a managed service provider (MSP) for IT services, you can enjoy the fulfillment and financial freedom of owning your own business. Keep reading to discover exactly how to get started!
What Is a Managed Service Provider?
Our guide is going to help you learn how to become a managed service provider for IT services. But first, we need to answer a basic question: what exactly is a managed service provider?
Managed service providers (or MSPs) provide certain services to businesses that the businesses cannot provide for themselves. With an IT-focused MSP, you would be offering technology-related services to businesses that need additional support.
In most cases, these will be businesses that don’t have their own dedicated IT department. To such businesses, it is cheaper to pay for an MSP “as needed” than it is to pay for an entire IT department’s salaries and benefits for the entire year.
Technology Is Key
There are MSPs designed to provide a range of different services to businesses that need them. At this point, you may be asking yourself: “why should my MSP focus on technology?”
The short answer is that businesses have invested extensively in IT and will continue to do so for the foreseeable future. Almost every aspect of our work lives is centered around technology, and these businesses understand that investing in IT is an investment in the safety and success of their company.
As an added benefit, IT-based MSPs are very versatile even when the market is uncertain. For example, the COVID-19 pandemic saw many businesses make cuts to their existing IT staff in the name of balancing the budget. And this was just one part of many changes that are seemingly here to stay.
However, the same companies that had difficulty paying for their own in-house IT teams will be happy to embrace a reliable MSP that costs a fraction of what they were previously paying.
A Growing Market Meets Uncertain Businesses
It’s easy to see that technology has become an increasingly important part of daily lives and our work lives. And this has happened very fast. For many managers and workers, it may have happened a little too fast.
Ever work for a company that suddenly gets access to new hardware or software? No matter how awesome the new gadgets and apps are, it takes a lot of time to properly train everyone involved in how to use the new technology.
Put these ideas together and you’ll see the reality of the 21st century: companies are investing in IT without fully understanding how to make the most of it. This is where your MSP business comes in.
In short, you can provide technological access and expertise to companies who need help. And companies of every size are happy to go with an MSP instead of spending large amounts of time and money on recruiting and training an in-house IT team.
What Services Should I Provide?
Earlier, we gave a top-level overview of what managed service providers do. But for an IT-focused MSP, it’s worth considering which services you should provide.
Many MSPs offer basic services, including installing hardware and software and managing email. And a good MSP should also help with remote monitoring and management. Some companies may also need help with network, hardware, and software maintenance.
Finally, all companies benefit from data backup and recovery services. Honestly, your best bet is to determine what the specific technological needs are for your local businesses. By making sure you cater to those needs, you can pave the way to your own success.
Different Kinds of MSP Businesses
We have reviewed some of the basics about what MSPs are and some of the services you may choose to provide. Beyond that, though, you need to determine the exact business model your MSP will follow.
For example, some MSPs focus on one or two verticals and market themselves to very specific niches. Others decide to specialize in a certain platform or a certain type of technology (such as SAAS).
Some MSPs play the role of consultants to other businesses. In addition to helping those businesses with their technology needs, such an MSP would also help with other matters that contribute towards the growth of that business.
Plenty of MSPs now specialize in security. Given how many high-profile stories there are each year about hacked databases and leaked information, more businesses see the value of investing in better security.
Finally, the most successful MSPs may start offering their services to smaller MSPs. This provides the infrastructure necessary for the smaller business to grow while also demonstrating the best practices necessary for the smaller MSP to reach its full potential.
The Benefits of Starting An MSP Business
Still on the fence about whether to become an IT service provider? If so, it’s important to take a closer look at both the pros and cons of running such a business.
Perhaps the biggest benefit for an MSP is that you will have a steady paycheck from the different businesses you work with. Many who start an MSP began by offering their services for small terms or short projects. Once you have your own business, you can look forward to a consistent stream of business rather than the “feast or famine” income from freelancing.
Additionally, an MSP usually requires very few employees and very little overhead. You can be a successful MSP serving multiple companies while still enjoying the benefits (including lower overhead costs) that come from running a small business.
As your MSP becomes more successful, it is very easy to expand and offer additional services. By expanding to meet client needs, you can create a very loyal base of existing customers. And the more services you offer, the likelier you are to attract brand new clients, helping you further expand your operation.
The Drawbacks of Starting An MSP Business
As great as it is to run an MSP, no business is perfect. And it’s important to know about the drawbacks you may face before you dive into a new business venture.
Early on, it may be difficult to recruit the talent you need. While the technological boom makes this a great time to start your MSP, it can also make it harder to find and hire the best workers that will help your business flourish.
And as with most businesses, it can be difficult to develop your pricing models (more on this in a minute). It’s important that your business turn a profit, but it’s also important that you don’t price yourself out of consideration for many prospective clients.
In the early days of your business, marketing may be a struggle. The most successful MSPs mostly rely on referrals and “word of mouth” marketing, you’ll need to do an aggressive early marketing push to get your name out there.
Finally, your business will need to adjust to changes regarding everything from technology to work culture (for example, the recent shift towards remote work for many businesses). Our guide will delve into more detail later, but it’s important for you to know that being adaptable is an important aspect of this business from the very beginning.
Multiple Pricing Models
Have you considered what your pricing model will be like for your MSP? The most successful MSPs typically offer multiple pricing models so that prospective customers can get exactly what they need.
As an example, some businesses may only want you to remotely monitor their network. Small businesses may appreciate pricing models that charge by the number of users or devices. Certain businesses may prefer a tiered model where different services are tied to different tiers and different prices.
And, of course, some businesses prefer an “a la carte” model that allows them to choose the exact services they need and no others. Only you can determine exactly which pricing models your business will offer to entice customers in your local area.
A Thorough Service Level Agreement
They say that the devil is in the details. And when you run your own MSP, the most important detail is the service level agreement.
This agreement is basically your contract with the client. The agreement specifies what services you will offer to the client, what deadlines you need to meet, what standards the client expects, and what your customer grievance process is like.
We like to think of the SLA as one of the best ways that you manage the expectations of your clients. And such an agreement helps to protect your business as much as it does your clients.
Marketing Your MSP Business
What is the best way to market your MSP business? The truth is that there is no “one size fits all” approach to marketing. Your exact approach depends on the focus of your business and the kinds of clients you are trying to attract.
If you are targeting SMBs, then you should consider consultative marketing. This lets you sit down with a CEO or manager to discuss the specific pain points of that business. After that, you can discuss the many ways that your specific services can alleviate those pain points.
If you’re targeting larger businesses, it is useful to create buyer personas. Such personas can help you and your team visualize the issues these larger companies are facing and develop a game plan for how you can help them.
Regardless of your target customers, digital marketing is important, especially at the very beginning. Make sure your website speaks directly to the concerns of your target audience. Consider investing in PPC while you build your organic SEO, and don’t forget to create a social media presence online.
Change: Your Only Constant
Part of running any successful business is being adaptable. But this is especially important in the world of technology, where change can come suddenly and unexpectedly.
Perhaps the best example of this came during the COVID-19 pandemic. Practically overnight, businesses all around the world had to develop strategies for remote work and remote collaboration between different teams.
That’s part of why becoming a managed service provider is so lucrative right now: there are still plenty of companies that need help adjusting to our new normal. But the pandemic and its effects are a powerful reminder that the technological landscape may change at a moment’s notice, and your business must be able to adapt.
Find Who Is Hiring IT Teams
Previously, we touched on several marketing strategies that may help you start your MSP business. But we saved the best strategy for last: approaching companies that are actively trying to recruit IT specialists.
Most companies turn to MSPs because those providers offer services that the company cannot handle in-house. If a business (especially a newer business) is trying to hire many IT employees, it is likely because they want to create an in-house IT team.
This provides a natural opportunity to pitch your business and your different services. Your goal is simple: to convince the prospective client that you can provide all of the services that an in-house team can at a fraction of the cost.
The best part is that this argument practically makes itself. When the company ponders how many hundreds of thousands of dollars in salaries and benefits they will have to pay an in-house team each year, the annual cost of your different pricing models will look better than ever!
Your Next Move
Now you know how to become a managed service provider. But do you know which established MSP you can learn quite a bit from?
Be Structured is an experienced MSP serving the Los Angeles area. To see how we can help you learn more about MSPs and even starting your own business, contact us today!