sample msp business plan

7-Part MSP Business Plan Template – from tech to CEO.

Most msp business plan templates focus you on doing work rather than building a business, what you need as an msp owner, also, where are you, the msp owner, in the standard msp business plan template, so, what should be in an msp business plan template, why you need an msp business plan, what makes an excellent msp business plan, where can i find traditional msp business plan templates, quarterly business review template, what does msp mean, related posts.

Do you find running an MSP stressful?

Do you wish you had more time?

Do you wish your business operated more efficiently so that someone else could do the work? Then you are in the right place. Our business plan template isn’t your typical business school drivel. This plan is about how to get your MSP right – the steps you need to take now to make running an MSP less stressful, give you more time, and create an efficient business where anybody can do the work.

So… ready to get started?

If you do a Google search for an MSP business plan template, you will find dozens of variations on the same theme. Wrapped in different language and slightly different words, you will find a list that looks something like this:

• Executive summary
• Company description
• The products and Services you offer.
• Marketing plan (how you will sell)
• Competitive summary
• Operations plan
• Management and organization (how you structure the company)
• Startup expenses and how you will get the money.
• Financial plan
• And lots of appendices supporting all the assumptions you made above.

There is nothing wrong with these categories; they are correct, and understanding them is useful; the only problem is that they don’t help you build an MSP business – they focus you on MSP delivery.

There are a number of sample business plan templates that will guide you through crafting your traditional business plan, the SBA has good advice here , and Live Plan offers a great tool you can use to build your plan.

What I’d like to do is introduce you to a more effective way to plan your business, one that plans your business around you and your needs, rather than a random set of factors that the SBA thought might be a good idea.

When you are starting an MSP, you have no competition. Seriously.

This may sound blasphemous, but as long as you are less than $10-15 million in sales, there is plenty of business out there, and nobody cares enough to steal it.

You are probably not looking for investments, so who cares about your executive summary or company description?

When starting or growing an MSP, your MSP Business Plan template should instead focus on standardization and building the business machine. 

If you are building a business, it must align with your needs and desires. You should be clear about what you want and the business’s role in helping you achieve what you want.

In our program, we ask people to write a prosperity plan that defines the impact, freedom, and wealth goals they want to attain. If you and your business are not aligned, building it is likely to turn into an energy-sucking exercise rather than a life-affirming one. It is critical that your needs are in your MSP business plan template.

In addition, you, the business owner, are the biggest wildcard in growing your business. Your mindset will enable or limit it, your idea that will form its basis and your passion that will ignite the rest of your team. 

The standard template leaves you out of the business. We think that is a mistake and suggest that there are other types of business plans for growing businesses.

Our business plan template includes these seven elements:

• The business definition : this includes all the stuff in the traditional business plan but goes a bit further. We suggest you look at the nine elements of the MSP business model (Value proposition, how you attract customers, how you relate to customers, your sources of revenue, your key activities, your key resources, your partners, and sources of cost). But we also want you to think about your vision, mission, and values because these are essential to growing your team and the business.
• The processes you need to deliver. How will you attract, convert, deliver and complete your business activities? Make this repeatable.
• The factory, what is all the stuff you need to run your business and make it work?
• You , what you want out of the business; your impact, freedom, and wealth goals. It is also important to think through how you keep yourself accountable and how you will overcome the mindset challenges that we ALL face. 
• People , or your team, and how you will build a team, engage them, and ensure they are all working toward the same goal.
• Metrics and money so that you can measure your performance and plan your finances.
• Invention , because you will always face hurdles, and it is in overcoming these hurdles that you develop the intellectual property that sets you apart. 

In our experience, the process of thinking through these seven areas is essential to building a successful MSP business and a useful MSP Business Plan.

Now, in opposition to the “follow a traditional plan” camp, there is the “you don’t need a business plan” camp.

But you do need a plan.

First, writing an MSP business plan is a valuable exercise: it allows you to think through how you will build your business, what it will look like and what your priorities are. The practice of thinking, imagining, and visualizing your business is important.

More importantly, a business plan keeps you on track and supports you in delivering meaningful results.

Research conducted by Bplans.com suggests that businesses with a business plan:

• Grow 30% faster than those without. 
• Are twice as likely to grow , secure finance, and woo investors.
• Are 129% more likely to grow beyond the startup phase and 260% more likely to develop from idea to new business. 

These statistics sound reasonable to us, though our experience suggests that a business plan is even more critical than they suggest (though we don’t have supporting statistics).

Almost always, when we start working with an MSP, they are struggling to grow, the owners are underpaid and overworked, and the team is not aligned. These MSPs also never have a workable business plan.

So if you are ready to grow your business, download our free managed service provider business plan pdf and start today .

This is what Investopedia says makes an excellent business plan:

Good business plans should include  an executive summary and sections on products and services, marketing strategy and analysis, financial planning, and a budget . Investopedia

Here’s what we say:

Your MSP business plan template doesn’t need an executive summary; we don’t care. What it needs is a clear plan that you can follow to help you grow your business.

An excellent MSP business plan template defines where your business is and where you want it to go. It gives you a pathway to get there, it focuses you on building your MSP business model . An excellent business plan serves you and helps you build your business.

Well, there are not a lot of great MSP business plan templates out there, but there are some standard business plan templates that are worth checking out, if you are so inclined.

The SBA has a nice overview of a traditional business plan and how to use it, and they also have examples. You can find the SBA’s Business Plan template here .

Score also has a good template which you can find here . Score is a great organization, but most of its advisors are retired corporate executives who never built a business. Their advice is well-meaning but generally not tailored to the needs of small, growing MSP businesses.

Looking for a Quarterly Business Review template to combine with your MSP business plan template? Well, we don’t have one. What we do have is a Strategic Business Review template – so much better than a quarterly business review! And you can find it here.

A managed service provider (MSP) is a company that provides IT services to organizations. These services include managing and maintaining their IT infrastructure, applications, and systems. MSPs typically offer various services, such as monitoring, troubleshooting, and repairing IT systems, managing backups and data recovery, and providing technical support and advice.

MSPs can offer their services on a contract basis, typically for a fixed fee or a monthly subscription. This can provide organizations with the benefits of having access to expert IT support and resources without having to hire and manage their own in-house IT staff. MSPs can also offer a range of flexible service levels to meet the specific needs of different organizations.

MSPs can be a useful option for organizations that want to outsource their IT management and support to a third party, as they can provide a range of expertise and resources that may not be available in-house. This can help organizations to focus on their core business operations while still having access to the IT support they need to maintain their IT systems and ensure they are running smoothly.

What is a Business – the 7 Elements of a Successful MSP

How to start and run a business – build a business machine

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Managed Service Provider Business Plan Template

Written by Dave Lavinsky

Managed Service Provider Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their managed service provider companies.  We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a managed service provider business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Managed Service Provider Business Plan?

A business plan provides a snapshot of your managed service provider business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Managed Service Provider

If you’re looking to start a managed service provider business or grow your existing managed service provider company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your managed service provider business to improve your chances of success. Your managed service provider business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Managed Service Provider Businesses

With regard to funding, the main sources of funding for a managed service provider business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for managed service provider companies.

Finish Your Business Plan Today!

How to write a business plan for a managed service provider business.

If you want to start a managed service provider business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your managed service provider business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of managed service provider business you are running and the status. For example, are you a startup, do you have a managed service provider business that you would like to grow, or are you operating a number of managed service provider businesses?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the managed service provider industry.
• Discuss the type of managed service provider business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of managed service provider business you are operating.

For example, you might specialize in one of the following types of managed service provider businesses:

• Lower-level Managed Service Provider: At this level, the managed service provider will oversee all IT services and provide appropriate support. However, the managed service provider will not be included in planning or business adjustments to service. The client is notified if there are issues or threats to security and will advise to control or make repairs when needed.
• Mid-level Managed Service Provider: The mid-level managed service provider will offer a mix of technology-related services, in addition to IT support and maintenance. Monitoring and securing the client from threats is a paramount feature at this level.
• High-level Managed Service Provider:  A high-level managed service provider will offer the comprehensive level of managed IT services, including IT support, communication systems, data analytics, and wireless network support.

In addition to explaining the type of managed service provider business you will operate; the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of companies under contract, the number of high-level services forecast, reaching X number of clients served, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the managed service provider industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the managed service provider industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your managed service provider business plan:

• How big is the managed service provider industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your managed service provider business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your managed service provider business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: all industry sectors, including corporations, government agencies, and high-security companies.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of managed service provider business you operate. Clearly, high-security businesses would respond to different marketing promotions than retail corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regard to demographics, including a discussion of the ages, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other managed service provider businesses.

Indirect competitors are other options that customers may use that aren’t directly competing with your service. This includes software programs, cloud computing services, and applications. You need to mention such competition, as well.

For each direct competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. However, you should be able to find out key things about them, such as

• What types of customers do they serve?
• What type of managed service provider business are they?
• What is their pricing (premium, low, etc.)?
• Do they offer any unique or special values for customers?
• What are their weaknesses?

With regard to the last two questions, think about your answers from the customers’ perspective. And, don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide options for multiple-location services in a single contract?
• Will you offer services that your competition doesn’t?
• Will you provide additional services, such as cloud computing?
• Will you offer better pricing or package services?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a managed service provider business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of managed service provider company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide ongoing management of a client’s AWS infrastructure, or work with clients to reduce operational overhead and risk?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the services you offer and their prices.

Place : Place refers to the site of your managed service provider company. Document where your company is situated and mention how the site will impact your success. For example, is your managed service provider business located in a standalone building, near a corporate business center, or in a commercial district?  Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your managed service provider marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Reach out directly to corporations with service needs
• Engage in email marketing
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your managed service provider business, including answering calls, planning and providing IT services, billing clients, managing and maintaining equipment and software, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to secure your Xth contract, or when you hope to reach $X in revenue. It could also be when you expect to expand your managed service provider business to a new city.

Management Team

To demonstrate your managed service provider business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in operating managed service provider businesses. If so, highlight this experience and expertise. But, also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a service provider business or successfully owning a small IT service business.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you contract with 5 corporations per day, and/or offer service packages for large entities? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your managed service provider business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a managed service provider business:

• Cost of managed service programs, software and computer equipment
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses like legal expenses, permits, computer software, and equipment (if you’re a new business).

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of contracted clients you serve.

Writing a business plan for your managed service provider business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the managed service provider industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful managed service provider business.

Don’t you wish there was a faster, easier way to finish your Managed Service Provider business plan?

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Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s business plan advisors can give you a winning business plan.

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Tech Accelerator

Guide to building and executing an msp business model, this managed service guide provides an overview of how to get started in the msp business, covering the basics of building a service provider and the challenges in doing so..

• John Moore, Industry Editor

The MSP business model emerged in the late 1990s, a product of the internet's meteoric rise, and has matured into a widely recognized mechanism for delivering IT services.

Awareness of managed service providers has grown among customers, from SMBs to enterprises. MSPs are called on to provide services such as remote monitoring and management, cloud consulting and migration and cybersecurity. The increased visibility of MSPs, and their recurring revenue streams, have made them an attractive target for investors.

Prospects for future growth are strong, especially now that more customers rely on IT to provide products and services in a rapidly digitalizing world.

Benefits and Challenges

Entrepreneurs considering the launch of an MSP business, or investors eyeing MSPs as an investment opportunity, should consider the pros and cons of managed IT services.

First, we'll take a look at the main benefits.

Predictable, recurring revenue. Managed services are sold as a subscription, with customers paying a monthly fee. This approach provides a consistent flow of monthly recurring revenue (MRR) for the MSP, in contrast to the unpredictability of generating revenue from one-off projects. The stability of MRR is part of what has attracted investors to the MSP sector. So, although the entrepreneur might be far from needing an exit strategy, it's good to know that one exists.

Opportunity for higher margins. Many companies that transitioned into the MSP business model were originally resellers. Those companies sought higher profitability in services as hardware margins eroded over the years. MSP business management software and various automated tools offer service providers the ability to support multiple customers with a relatively small number of employees, opening opportunities to boost profits.

Opportunity for expanded services. MSPs that successfully launch an initial service line are poised to provide additional offerings, from IT strategy consulting to backup and recovery. Those additional services help a provider avoid customer churn because clients can meet more of their needs through the MSP without having to turn to other suppliers. Add-on services also increase the amount of revenue generated per month, per customer.

Ability to tap mature technology . Early MSPs built their own tools or used commercially available, but non-MSP-specific, data center management software to run their operations. Today, MSPs have a wide range of purpose-built software products to manage their businesses. Remote monitoring and management (RMM) and professional services automation (PSA) products are among the offerings that can serve as an MSP's technology foundation.

Service provider startups interested in seizing those MSP advantages will encounter challenges along the way .

Developing the initial offer. An early task for the MSP is developing and pricing the offer. There are numerous pricing models -- see section below -- from which to choose.

Obtaining talent. MSPs face the same technology talent shortage as any other technology business. The problem becomes more acute as the MSP ventures into high-demand areas, such as cybersecurity and cloud engineering.

Marketing services. Most MSPs rely on with word-of-mouth promotion and customer referrals to get off the ground. At some point, however, MSPs tend to reach a plateau in which new sales just keep up with the natural rate of customer attrition. MSPs must develop a marketing plan to promote their value proposition, maintain a healthy sales pipeline and keep the company growing .

Gearing up for vertical markets. As MSPs expand, they might choose to focus on one or a handful of vertical markets. To pursue such a strategy, a service provider might need to acquire specialized industry knowledge or develop expertise in technologies endemic to particular industries.

Adjusting to changing market conditions. MSPs operate in a dynamic, rapidly changing market. Service providers must constantly refine their business plans to remain relevant. The arrival of cloud computing, for example, compelled many MSPs to reinvent their services . They must also adapt to macroeconomic patterns and unpredictable events, such as the COVID-19 pandemic. The latter has presented MSPs with several challenges, including the need to develop business strategies that take uncertainty into account. The pandemic's financial lessons favored service providers with broader portfolios that provide a mix of security, collaboration and cloud offerings.

How to Build an MSP Business Model

Entering the managed services market requires several steps. Here's a summary.

1. Define the business strategy

Where, what and how are the first questions to answer when devising the core MSP strategy. What geographical area or areas will the company pursue? What services will the MSP provide? How will the MSP deliver the services offered? MSP veteran Dave Sobel advised entrepreneurs starting a service to consider focusing on a line-of-business technology, which lets the MSP deliver business value with an offering specific to a vertical market. The MSP business strategy can extend to how the MSP plans to work with customers' internal IT teams. The co-managed IT services approach , for example, aims to create a cooperative relationship between the MSP and the IT department as opposed to an adversarial one.

2. Determine the pricing model

Pricing is an element of business strategy that deserves special attention. An MSP's pricing model provides the basis for recurring revenue. In addition, proper pricing will make it easier for customers to assess and consume a provider's offerings. An MSP can choose from at least six popular pricing models , which run the gamut from simple plans to all-encompassing packages. Which model works for an individual company will depend on the scope of the services it plans to sell and the intended customer base.

MSPs starting from scratch have a clearer path when adopting a pricing model. Companies transitioning to the MSP business model from a different approach will likely need to revamp their pricing to obtain a predictable revenue flow. Once a pricing approach has been established, MSPs must learn how to stay competitive without slashing prices . Techniques include paying close attention to labor costs and focusing on a vertical market or technical specialization that reinforces the company's value in the eyes of customers.

3. Create and offer an SLA

An MSP must offer a service-level agreement (SLA) to govern its relationships with clients. The SLA documents the services the MSP will provide, defines the standards for delivery and establishes the means for redressing issues. Service provides might also create a master service agreement, which sets forth the general terms and conditions for client work. The service agreement might incorporate the SLA by reference. SLAs help manage customer expectations and provide customers with a tool for comparing offers from different MSPs.

4. Create a sales and marketing strategy

Sales and marketing are often not the strongest parts of an MSP's business. Engineers and technicians often launch such companies, which initially gain new customers through referrals rather than active selling. MSPs built as lifestyle business might not need to grow past a certain point. But service providers that seek continued business expansion will probably need to create a proactive sales and marketing effort.

Creating an MSP sales process starts with finding an experienced MSP salesperson. People with that experience are difficult to find, so an MSP might need to hire salespeople and train them on the fundamentals of the technology and the MSP business. Another option is to have an MSP technician, in a sales engineering role, partner with a salesperson on customer calls. The sales process should be standardized, from the initial contact with a prospect to order processing.

A sales and marketing strategy rests on two essentials: knowledge of self and knowledge of customer. An MSP needs to know its strengths to craft a go-to-market message. Based on that insight, a service provider can also develop a profile of the ideal customer and then focus its sales and marketing activities in that direction. Consultative selling, which zeros in on a client's pain points, is another approach that MSPs can adopt when targeting SMB customers . MSP marketing considerations include making sure website copy speaks to targeted customers, building a brand around core services and appointing one person in-house to take on marketing duties.

5. Develop a recruiting strategy

An MSP that launches with a core group of employees will eventually need to recruit talent in order to serve customers as it grows. An IT recruitment strategy should ideally strike a balance between looking for required skill sets and looking for personality traits that fit the organization's culture. Technical expertise, while important, isn't the whole employee picture. Service providers seeking new employees should consider an applicant's ability to cope with pressure, learn as they go and adapt to unexpected situations.

6. Think about the type of MSP you want to become

A startup MSP might initially concentrate of basic services , such as network monitoring and management. But it's never too early to think about a growth trajectory. A service provider should assess customer needs to determine next steps, such as offering backup and disaster recovery or cybersecurity. Eventually, an MSP can choose to specialize in one or more areas. Here are some possibilities:

• Vertically focused MSP . Here, the MSP would acquire expertise in one or more verticals and go to market as an industry-specific service provider.
• Platform-oriented MSP. An MSP can choose to focus on a particular technology stack, public cloud infrastructure platform or SaaS offering.
• Consultative MSP. Early-stage service providers tend to focus on the technical aspects of supporting customers. Providing consulting services, however, puts MSPs in a position to address business concerns. MSPs can evolve to the point of offering a virtual CIO service.
• Managed security services provider. An MSSP offers a range of services to help customers address security, privacy and compliance issues. While MSSPs specialize in security, MSPs increasingly offer at least some security features.
• White-label service provider. An MSP, at some point in its development, might decide to offer its infrastructure to smaller MSPs. This MSP business model variation can provide a range of offerings, including network operations center services, staff augmentation and cybersecurity.

7. Embrace change

The IT services market is subject to constant change. Channel companies have continuously evolved over the years, from resellers to solution providers to MSPs to cloud-driven MSPs. A service provider can expect to transform its business model every few years and must tweak its service mix on an ongoing basis. Transformation can prove expensive and disruptive to employees, vendor partners and customers. MSPs will need to periodically evaluate the feasibility of launching new lines of business and explore how a new business model would affect its web of relationships.

Executing the MSP business model

The task for service providers shifts from planning to execution once the MSP business model is in place.

The client onboarding process is a key aspect of bringing a business model to life. The customer relationship depends on this early step. MSPs should document and standardize the process to make it consistent. Client onboarding typically involves several actions, including assessing the client's IT infrastructure and tools and identifying specialized requirements with respect to specific technologies or vertical markets. The process also aims to provide a smooth transition for the customer along the relationship continuum, from presales and sales to ongoing operations. MSP employees involved in the process can include an onboarding manager and customer advocates.

Realizing the benefits of the MSP model -- namely, the opportunities for recurring revenue and higher margins -- will depend on a service provider's operational efficiency. An MSP that fails to deliver quality services or struggles with keeping labor costs in check will have a hard time retaining customers or turning a profit.

Specialized software for managing and automating an MSP's operations plays a crucial role in sustaining the business. RMM software, the technology cornerstone for most MSPs, lets service providers remotely manage their customers' IT infrastructure. In addition to keeping tabs on a range of customer gear, from servers to mobile devices, RMM also manages patching and software updates. PSA software tools , meanwhile, automate an MSP's core business functions, playing a role like that of ERP in other types of businesses. PSA functionality varies from one software vendor to another, but typical functions include time and billing, project management, ticketing and reporting.

Although RMM and PSA serve as the technology underpinning for many MSPs, those products aren't the only approaches service providers employ. Other companies use a combination of network performance monitoring, IT service management and CRM products, for example.

Flexibility should be built into an MSP's operations, given the pace of technology change and the potential for unforeseen events. The COVID-19 pandemic, for instance, disrupted many types of businesses, but perhaps had less severe effects on the MSP model. Many industries, amid work-from-home directives, needed to develop remote workforce management strategies . MSPs, however, founded on the concept of remote management, have long maintained distributed workforces. Service providers might have expanded the population of remote workers and relied more heavily on collaboration tools, but rarely needed to devise an entirely new strategy for managing remote employees.

Other MSP trends managers should prepare to accommodate include the increasingly complex nature of managing multi-cloud environments , the evolution of cybersecurity needs and rising demand for automation.

Dig Deeper on MSP business strategy

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Managed Service Provider Business Plan Template & Guidebook

If you're an aspiring entrepreneur looking to start a managed service provider (MSP) business, then the #1 Managed Service Provider Business Plan Template & Guidebook is your go-to resource for setting up a successful and lucrative enterprise. This comprehensive guidebook provides all of the information and tools necessary to put together a comprehensive business plan from start to finish, outlining the key elements required for making your MSP business profitable and successful. With detailed considerations for sales strategies, marketing initiatives, financial plans, and more, this template and guidebook will help you develop and implement an effective strategy for success.

Get worry-free services and support to launch your business starting at $0 plus state fees.

How to Write a Managed Service Provider Business Plan in 7 Steps:

1. describe the purpose of your managed service provider business..

The first step to writing your business plan is to describe the purpose of your managed service provider business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a managed service provider business:

Our mission at XYZ Managed Service Provider is to provide cost-effective, tailored IT services and solutions to our clients, enabling them to achieve their organizational goals by expediting their operational efficiency and maximizing the return on their IT investments.

2. Products & Services Offered by Your Managed Service Provider Business.

The next step is to outline your products and services for your managed service provider business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your managed service provider business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your managed service provider business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your managed service provider business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a managed service provider business?

• Computer hardware, software and networking equipment
• Backup and recovery systems
• Access control systems (e.g. authentication and authorization)
• Security systems (e.g. firewalls, antivirus, etc.)
• Support tools (e.g. monitoring, ticketing, etc.)
• Management tools (e.g. asset management, reporting, etc.)
• Licenses for operating systems, applications and other technology products
• Business permits or licenses as required by your local jurisdiction

5. Management & Organization of Your Managed Service Provider Business.

The second part of your managed service provider business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your managed service provider business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Managed Service Provider Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a managed service provider business varies based on many different variables, but below are a few different types of startup costs for a managed service provider business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your managed service provider business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your managed service provider business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your managed service provider business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Managed Service Provider Business Plans:

Why do you need a business plan for a managed service provider business.

A business plan for a managed service provider business is essential for clearly articulating the company’s objectives and strategies, as well as for organizing the internal operations and resources of the business. The plan can also be used to create a budget, outline marketing plans and strategies, and provide detailed information about services offered. Additionally, developing a business plan can help in securing loans and investments from potential investors, as well as attracting potential clients.

Who should you ask for help with your managed service provider business plan?

You should ask a business consultant or a professional with experience in business planning. They can help you with the specific details of your business plan and ensure that it is comprehensive and well-thought out. Additionally, they can provide guidance on the best ways to market, finance, and manage your managed service provider business.

Can you write a managed service provider business plan yourself?

Writing a managed service provider business plan is a complex task that requires extensive knowledge of both business strategy and the specific managed service provider industry. It is highly recommended that a professional consultant be consulted in order to ensure the plan is created correctly and accurately reflects the goals, objectives, and strategies of the provider.

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We're newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

From assessing market viability and formulating business plans to selecting the right technology and navigating the financial landscape, I am dedicated to helping fellow entrepreneurs overcome challenges and unlock their full potential. As a steadfast advocate for small business success, my mission is to pave the way for a new generation of innovative and driven entrepreneurs who are ready to make their mark on the world.

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How to build a profitable MSP business model

Modern organizations are reliant on IT services to deliver at a rapid pace in our increasingly digital world, presenting managed service providers (MSPs) with an opportunity for immense growth. 

The statistics are telling: More than 75% of the largest venture capital investments have gone to IT infrastructure and industry-focused enterprise software companies.

To help your organization better realize this growth and success, we’ve compiled a guide on creating the ideal MSP business model. A successful business model can help your MSP become more profitable, boost your customer retention rate, and increase your recurring revenue . 

Finding your position in the MSP marketplace 

A profitable business model in any field should be designed around three basic principles:

• Profitability . Is the business model going to effectively be able to make more money than it spends via client sales and other forms of revenue?
• Client service . Does the business model allow for a standard of service that will keep clients satisfied?
• Growth potential . Does this business model have the capacity to scale and grow, while still maintaining success in the other two areas?

Building around an effective business model means an MSP can provide a streamlined, but effective service that supports more clients, keeps profits up, and moves towards business maturity .

With that said, you can have all the expertise and skill in the world and still fail to become a profitable business. Let’s take a look at the foundation of a successful MSP business model.

The foundation of a successful MSP business model

When building your MSP business model, certain characteristics can help elevate your practice above the competition. 

Start with identifying a concrete niche and value proposition. If your goal is to help businesses reduce the overhead costs associated with full-time IT personnel, prepare to hammer that point home in your marketing materials and business pitches. A successful business model will allow you to strategically add new services to your arsenal as you grow, but being a generalist from the start will hurt your chances for success.

Picking a defined model and sticking to it also matters. The last few years have seen some change in the MSP business model, as reported in a 2022 CompTIA survey . In that year, 63% of MSPs said they took on a hybrid model, which allows them to provide managed services alongside other offerings, such as product sales. That’s up from 56% in 2021. 

Why is this important? The appeal of a reliable MSP often rests on a diverse service offering. Organizations seeking a long-term MSP may want a mix of VAR, CRM and advanced cloud and cybersecurity support. To be that successful provider, it’s important you stay updated on the latest business process trends to fine-tune the MSP business model that works for you and your clients. As needs evolve, so should a forward-thinking MSP. 

Lastly, it’s important that you consider some of the hurdles you may encounter, especially in those early stages of business. This may range from general operational issues to MSP-specific, solution-based issues. Knowing these early on and having a plan to address them will help set you up for success.

Creating a profitable MSP business model

How you set up your MSP business model, or cloud MSP business model, could be critical to how you maximize profit. The global MSP market is forecast to reach $354 billion by 2026—up from $242 billion in 2021. Efficient operations are critical to maintaining your competitive edge while growing revenue and profits. 

With these considerations in mind, let’s review the steps to creating a successful MSP business model.

Define your MSP business strategy

When it comes to your MSP business model, the strategy is the guiding force. How you plan to best service your clients while building a profit should inform different areas of your model. 

For example, in other industries, SaaS businesses may find value in offering both a la carte and bundled and tiered packages of their services. In the MSP industry, focusing on bundled/tiered packages is often recommended.

Why is this the case? Karl Palachuk, author of Managed Services in a Month and the four-volume Managed Services Operations Manual, shares his perspective that a top MSP business model should offer bundled packages and move away from a la carte offerings. He noted the “platinum” bundle should address the many needs an organization is facing, such as cybersecurity services, spam filter, storage, backup, email, and network security. He also added that a platinum package should include any unique offerings that differentiate a given MSP from the competitors. 

Bundling can make it easier to streamline your clients' entire business operation framework and increase the number of client interactions. This can have a positive impact on retention rate, since you have the ability to proactively solve a host of challenges.

Your sales and business development strategy goes hand-in-hand with your product strategy. Historically, MSP sales have largely been made through referrals and word of mouth. While this is still the case to some degree, the industry has seen rising inorganic growth via mergers and acquisitions.

While building your business strategy, you may want to consider if a merger or acquisition is a long-term goal of yours or not. This may affect your relationship with other MSPs in the industry as you grow. Learn more about this path in our on-demand webinar, Mergers and Acquisitions: A Matchmaking Process for MSPs .

Determine which services your MSP will offer

On the topic of services, what types should you specialize in? As mentioned earlier, being a generalist too early on can be a mistake for many MSPs.

One of the best ways to approach selecting your service offerings is following the data. Cybersecurity is an acute need across the board, with new and familiar cyberthreats on the rise and a known gap in cybersecurity talent . This means cybersecurity can be a good starting point for your MSP. 

As you grow, you can look into common cross-sell or up-sell opportunities like data backup and disaster recovery within a bundled or tiered package, as well as proactive maintenance.

Ultimately, your internal expertise and the current market demand should help inform your service offerings. You can continue to evolve your strategy as you build an initial client base and your organization becomes more mature.

Choosing the right MSP pricing model type

Another important element of your MSP business model is pricing. The right pricing model is necessary in order to maximize recurring revenue and achieve your target profit margin. 

MSP pricing model types

MSPs can leverage a variety of pricing strategies to meet specific client needs and services offerings:

• Monitoring : Monitoring provides networking and alerting services and can adapt to any service level. This can help organizations with insufficient IT staffing monitor their infrastructure in a cost-effective manner.
• Per-user: A flat fee is applied to each end user per month and covers all the end users’ devices.
• Per-device : Similar to per-user, except fees are based on the number of devices supported. This allows for simpler price quoting.
• Tiered : Bundling services into packages and building in pricing increases from tier to tier based on client needs can open the door to effective upselling.
• All-you-can-eat : This model features a flat monthly fee inclusive of all remote and on-site support and services, a good fit for organizations looking to avoid fluctuations in monthly costs.
• A la carte : While some in the industry are moving away from this concept, some organizations like startups may opt for this model to address ad hoc needs without long-term commitment.

Ultimately, selecting the right pricing model for your MSP should consider you overhead, client base, and service catalog. For a comprehensive look into putting together the best pricing possible, check out our eBook, Pricing IT Services: A Complete Guide .

Design a sales and marketing strategy for your MSP

An effective sales and marketing strategy should include inbound and outbound elements. While a strong foundation of technology specialists is at the backbone of any effective sales team, effective sales and marketing campaigns can help scale your business from good to great.

You may benefit from hiring salespeople with deep knowledge on the technical nuances of the solutions you offer. When you hire an MSP engineer who is also a sales professional, it’s a win-win: your MSP benefits from having a knowledgeable sales pro who knows the technical angles of the product, and the clients you work with will be better served by a salesperson who understands their pain points.

Trust is the cornerstone of retention and recurring revenue in the MSP space. Leveraging testimonials and social proof in your marketing collateral can help you earn that competitive edge. 

Consultative selling can be another effective sales strategy, which involves building a dialogue with clients to establish their unique needs and pain points. With customer success at the forefront instead of sales quotas, MSPs may experience shorter sales cycles and stronger retention rates. 

Find and retain the talent your team needs

Determining a recruitment strategy can be extremely valuable for your MSP business model. Once you’ve identified the talent gaps on your team, consider what your employees can take on and whether hiring is necessary to deliver the service your clients demand. 

When faced with a shrinking talent market and rising labor costs , outsourcing incident response services can be another way to deliver superior service with limited in-house resources.

Begin executing the MSP business model

Now that you’ve curated the elements needed for your MSP business model, it’s time to deliver. Operational efficiency is core to execution, but what does that look like?

When onboarding new clients, documentation and standardization are key to consistency. Assess the client's IT infrastructure and identify any specialized requirements in relation to specific technologies or vertical markets. 

You want to lay out processes that allow for an easy transition for clients along the relationship cycle, from presales and sales to continual operations. Good candidates from your team to get involved in the process include an onboarding manager and client advocates.

Know when your model needs to change

Your business model needs to provide consistent client service and maintain profit while building a foundation for growth. With technology and solutions always-evolving, success can feel like a moving target. For this reason, it is important to constantly evaluate your business model to optimize for customer satisfaction, growth, and profitability. 

Profitability issues are generally the first sign you may need to adjust your business model. To learn more about the best-in-class practices to maintain your profit margins, download our eBook, How ConnectWise Can Boost Your MSPs Profitability .

Find tools and solutions to support your business model and goals

Every MSP runs differently, and there is no “one-size-fits-all” solution for building a healthy and profitable business. That is why ConnectWise is here to help MSPs of all stages achieve profitability and operational maturity. 

Our suite of business management solutions for MSPs can set you up for success with robust PSA, quote and proposal automation, IT documentation, and business intelligence software. Request a demo to fast-track your growth today. 

What services do MSPs typically offer?

Common services offered to clients include managed security services, managed networks and infrastructure, remote or on-site IT support, business intelligence/data analytics services, managed cloud infrastructure services, wireless and mobile services, and more.

How do MSPs differentiate themselves from competitors?

As challenging as differentiating can be in the MSP space, you can set yourself apart by offering a range of bundles and tiers, sporting the top network uptime performance, hiring specialists in areas other companies don’t include in their staffing, and adding a suite of software solutions to your service offerings that boost overall capabilities and efficiency.

What is the typical contract length for MSP services?

It may be common to see a one-year short-term contract for MSP services, but a typical contract length for most MSPs is three years.

What kind of support and communication can clients expect from their MSP?

 Because trust is foundational to the MSP-client relationship, the more communicative and proactive you can be, the higher the client retention rate will be. 

Communication success begins during the client onboarding process, when it’s essential to have a 360-degree view of the company’s network infrastructure and requested services. Keeping that communication open, along with support channels, will lead to a stronger working relationship for all parties involved.

Recommended

A Guide to Creating MSP Business Plan

• MSP Business Plan

If you are running a managed service provider, it is possible that a good amount of your customers come from referrals. These can be a great source of business, especially for those that are just starting up. However, as your company grows, it is important to expand your business without relying too much on referrals while ensuring that you have adequate resources. This is where the MSP business plan enters the picture. Creating a comprehensive MSP business plan can help work your way towards business expansion.

The Basics of an MSP Business Plan

An MSP business plan is a high-level document that defines your strategy, long-term goals, success metrics, pricing, and potential profitability. Having a business plan will help you predict the events that could threaten your business posture. Understanding the cost of IT services will allow you to come up with the perfect budget and maximize ROI for your business.

Now what are the necessary elements when building your MSP business plan?

Mission statement

You need to create a mission statement for your MSP business plan . It should specify the reasons why you do what you do. For example, what value can you offer to customers? Here are some examples where you could take inspiration from:

• Help small businesses set up and maintain effective IT infrastructure
• Deliver support for client hardware
• Maintain efficient and secure IT systems
• Become a leader in technology and the best IT service provider

After coming up with your mission, share it with your team so everyone will be able to live by these values.

MSP Executive Summary

This tells the “why” of your business. Start by determining what market needs does your MSP address. Identifying this is critical because your business’ executive summary must exhibit your goals about the main drivers of your business.

After doing a thorough analysis of your current business and financial situation, you can add your MSP executive model into your business plan . The things that should be included in your executive summary are the overview of the nature of the business, customer description, challenges your MSP try to solve, as well as the services you offer.

An MSP executive summary can save you resources by identifying a defined scope of services and target market. This could help explain to your team what projects and goals should be prioritized.

Local MSP Market and Competitive Analysis

MSPs are a localized type of companies. In order for you to succeed, you should be able to build a solid client base. Performing a local market analysis will require you to collect information about competitors in your market area, within 10-30 miles of your operations location. Make a research about various pricing strategies, offerings, and the unique services they offer to customers. Know about the demographics of their customers – are they small businesses, healthcare, legal, or manufacturing? Business planning can be seamless once you identify these key market analysis questions.

MSP Operating Plan

Your MSP operating plan will determine how you will perform the work. What people, processes, and technology will you utilize to provide high-quality services? If you are already running an MSP, identify the areas that need to improve.

In addition, you should also consider your own inventory. What products do you need to run your business? Will you require on premise hardware or on demand software? Another question to ask is the location of your MSP.

MSP Financial Planning

When considering your financial plans, you should compute your profit margins and examine your potential revenue sources. Having a strong sense of your financial situation can help move your business forward.

While a break/fix model may have worked for your MSP in the past years, you should consider transitioning clients to a per-user or per-service approach if necessary. Your financial plan should revolve around Key Performance Indicators (KPIs) and business goals. The KPIs should include:

• Monthly recurring revenue
• Sales conversion rate
• Source revenue

Setting up Goals with your MSP Business Plan

After setting the strategies for your MSP business plan, make sure that they are compliant with the SMART framework. SMART is an acronym that stands for the following elements: Specific, Measurable, Achievable, Relevant, and Time-based. You want to have a clear vision for the future of your company, as well as the goals and objectives for each project that are carefully planned, clear, and trackable.

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Final Thoughts

Planning can help you achieve the goals you have set for your MSP company.

When organizing your MSP business plan, you should think about your customers, your team, the potential market for your services, and your sources of income.

If you are looking to improve customer experience as part of your business planning, you may use MSP tools provided by ITarian. We offer a centralized platform to reduce operational costs and improve quality of service.

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6 Things To Look Out For If You Want Your MSP Business Plan To Be Successful

• November 2, 2022

It’s time to get very clear on what your MSP business plan should look like.

In today’s world where there is such a big need for a well-crafted and managed IT infrastructure in order to keep your business running… You as an IT services business owner, or MSP, should know that it is time to start tightening up your MSP business plan if you want to become and remain successful.

Fear is an odd thing. I met a guy once who makes a living wiggling into tiny, dark crawl spaces under houses, where mold, feces, poisonous spiders, snakes, rats, and other unsavory things abound. He was impressed at my fearlessness in speaking in front of thousands of people. He said he could NEVER do that, yet he woke up every day and went to work in places that would give me a claustrophobic heart attack. Running a business CAN be really scary at times, but people are often scared of the wrong things.

Here are the top 6 pitfalls of an MSP business plan that SHOULD terrify you to the point of taking swift action on getting them fixed.

1. not knowing what your employees are saying to your clients and prospects is a quick ticket to losing current clients and preventing the gain of any new clients..

Like the thrill of haunted houses and scary movies? Then allow me to suggest a totally free way to leave you unable to sleep at night: Eavesdrop on what your employees are saying to clients and prospects. A chill will run up your spine, guaranteed. Consider this recent interaction I had at the airport checkout when buying a little snack for the plane:

The salesperson says, “You know, this is $8,” with an incredulous look on her face and emphasis on the EIGHT DOLLARS. I reply, “Yes, I know.” (I actually didn’t but didn’t care.) She persisted, “Are you sure you want to get it?” At that, I replied, “No,” and walked out to buy it somewhere else.

Oh, but that doesn’t happen in YOUR company, right?

A friend of mine with a dental practice was told by a patient that she heard the receptionist telling a potential new patient that the doc was MUCH more expensive than other dentists in the area because he had three kids in private school. I have personally required clients to let me listen to inbound call recordings from Google AdWords and was utterly floored by what was said and how the call was handled.

On MULTIPLE occasions, I’ve heard techs say to a prospective client calling to inquire about whether or not the company could assist with an IT project, “We can’t help you. We ONLY do managed services,” then proceed to give out the phone number and website of a competitor.

For starters, you need a playbook, process, rules, and scripting for how the phone is answered, how a client is taken care of, how an upset customer is talked to, how an appointment is booked, how an appointment is confirmed, etc. But MORE important than that is checking for COMPLIANCE with those rules and scripts. Everyone likes to do the rah-rah team motivation stuff, but hardly anyone will do the auditing and enforcement piece.

2. If you are lacking a compelling reason for a prospect to actually meet with you, then you’ll never get your chance to even try gaining their business.

The other day, I had a client who is desperately trying to break into a new market as the first big step in their MSP business plan, and it is one that they said they have extensive experience and background in. I got on the phone to help assist in crafting their website copy and an offer to get them in and use throughout their marketing. When I asked them to give me a SINGLE (not multiple) reason for their defined prospect to meet with them, they came up empty.

I tried a different angle: What are the top three biggest problems you can solve for your prospects? Nothing … just vagueness. “We make their systems stay up and running.” Geez. How about ONE problem you can solve? Nothing. Okay, so tell me what you know about your competition and where they are failing. Who are these clients already buying from? No clue. Frustrated, I told them I could not help them and refunded their money.

I can’t work with someone who is that clueless not only about their chosen target market but also about what they bring to the table — then expects ME to somehow give them a magic pill to get customers to flood their doors waving checks. Look, this is Business 101: Money goes to perceived value initially (marketing), then REAL value after they buy . If your prospect cannot instantly see how working with you will greatly benefit them, you need to go back and work harder on your value proposition.

Bottom line: If your company and marketing are EASY to ignore, that should scare the crap out of you.

Further, a USP has to be in your DNA, not some tagline or sales letter I write. And YOU need to know your customers, market, and competition thoroughly. That is not my job, and it’s shameful for anyone calling themselves an entrepreneur to be and stay ignorant.

It’s a recipe for frustration, low margins, slow to nonexistent growth, slow sales, and price resistance. Yes, I’m a great marketer, but that doesn’t mean I can wave my magic wand and pull a USP out of my butt for anyone who shows up on the doorstep.

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3. Failure to build, maintain, and farm a list of qualified, interested prospects will greatly stall your MSP business plan from being able to move forward.

Not having a good, productive list of prospects puts you at a MASSIVE disadvantage in new client acquisition. Not only is it harder to convert cold prospects, but it’s also more expensive and time-consuming. You also cannot know, with certainty, how your marketing will perform (with a house list, you get to know your averages). Further, you’re totally and completely flat-footed should you lose a major account or encounter some other sales disruption in your company because you have no pipeline of “ getting ready-to-buy ” prospects.

It’s much easier to maintain a relationship than to initiate one, yet I know of many MSPs who’ve been in business for 10, 20, or even 30-plus years and don’t have a list — and if they do, it’s some dusty old relic that hasn’t been touched in years! Your list, and more specifically your RELATIONSHIP with your list, is the single biggest asset in your company — yet for most MSPs, it’s awash with missing and incorrect information and ZERO systems in place to nurture the relationships.

4. Lack Of Accountability For Anyone Or Anything Important

Roughly half the salespeople I interview tell me they weren’t given a quota. No quota! How can this be? It’s because someone dumber than a box of rocks hired them. Even more common is no accountability or coaching; their managers didn’t monitor them in any way … just the two-part training of “good luck and hang in there.” ( Where Have All The Good Salespeople Gone? ) But it’s not just sales — ANY position in your company ought to have some accountability for hitting some metric, quota, number, percentage, or goal, INCLUDING YOU. You (and your team) cannot hit a goal you don’t have!

4 key items every sales rep in your organization needs to know:

1) What is their quota or goal

2) The minimum number of sales they need to bring in to keep their job

3) Backward numbers for specific daily and weekly activities they need to HIT their quota

4) The high-payoff activities they need to perform to maximize their time and productivity. (Otherwise, you’ve got an army of the walking dead wandering around, hoping to sneak up on someone — but it’s YOUR brains they’ll eat.)

Top 10 Characteristics Of A Successful MSP’s Salesperson

5. Your MSP business plan MUST have a numbers-driven marketing plan in place as well.

I’m not talking about a marketing schedule of promotions, tweets, posts, and newsletters. I’m talking about a specific GOAL for new clients, sales, profits or all of the above, working down to the specific number of prospects you need to target to hit said goal. Money is not just sloshing around in the streets for anyone walking about to pick it up. Disorganized, random acts for client acquisition and revenue generation should scare you. It IS a weakness that needs to be addressed.

New Client Acquisition By The Numbers

6. You cannot wait until your accountant finishes your tax plan to finally know if you have made yourself profitable.

The other day, a client asked, “What is gross profit?” I almost choked. Do I even need to teach this? Kevin O’Leary said, “One hundred percent of the successful businesses that come on Shark Tank know their business and their numbers cold. They know where break-even is, and who their competition is. It is clear how big the market size they have the potential to reach is. They also know their customer acquisition costs and the lifetime value of a client. Those who don’t get funded are easily stumped by those numbers.”

Kevin’s counterpart on the show, Robert Herjavec, CEO of Cyderes (a $1.2 billion MSSP) said, “If you don’t love numbers, you don’t love business.” The financial numbers — and sales and marketing numbers — are the heartbeat of your organization. They need to pulse on a regular, routine basis, not once a year when you listen in to find out the patient died three months ago! Yet, so many small MSPs don’t really know what their sales are today or will be this month or this quarter. They have no sales pipeline, no knowledge of inbound leads, appointments set, close rate, average sale, or gross margins.

Many people are beaten down by the requirement to really KNOW their business and numbers — they’re not excited by it. Personally, I don’t “love” all the numbers and tracking, but there are certain things you have to get good at if you’re going to run a successful business. My feeling is that if it has to be done, let me learn to do it RIGHT and put a system to it (tracking the numbers, reviewing the numbers), so it’s less painful to do.

If you want your MSP business plan to be successful, then you must fall in love with the numbers and tracking, but most MSPs will never get to that point.

They keep running their business, denying, resisting, and resenting doing the things that must be done (the tracking, training, and management) — doing it only when forced to do so when things get SO bad that they cannot stand it anymore, but then still doing it poorly, desperately seeking someone to just do it for them, outsourcing or abdicating the responsibility to incompetent and inexperienced staff or vendors, starting over again and again.

We all know you can’t manage (or improve) what you don’t measure and track. Your sloth in these areas is your burden to bear, a cost to pay. You have to either decide you’re going to get ’er done and figure it out or constantly be held back by it. If you’re a business owner, this IS your responsibility and your job. If you don’t like it, perhaps you might look to go to work for someone who will — now, there’s a scary thought!

In conclusion, if you really want to have a successful MSP business plan, you must avoid these 6 pitfalls.

You have to understand how your employees are representing your company, and have a very clear reason you stand out from your competition. Make it a priority to consistently build and maintain a qualified list of prospects, hold your employees accountable, and be aware of your numbers. You can’t afford to not know if your business is profitable until the end of the year, so knowing your numbers is crucial.

If you’re an MSP (or IT services business owner) that wants help tightening up your marketing plan so that you can start to focus on other areas of your MSP business plan, then TMT offers a FREE downloadable guide that can help you get started. Click below to download.

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Your Guide to a Solid MSP Business Plan

Without a complete business plan, an enterprise is likely to fail, and managed service providers are no exception. A business plan is an essential item for any MSP that wants growth and profits.

Initially, your IT company might have gained its first clients from referrals or business acquaintances, but by itself, this is an unreliable channel. Growth requires a business plan.

In spite of the importance of a business plan, there are many service providers in the market that operate without one. In this article, we’re going to review how to create an effective MSP business plan that will help you move your business ahead.

1. Executive summary

First, you should describe your current business situation, what you have now, and how you’ve managed to get to this point. You should provide:

• A brief summary of what your company does
• Key milestones in your company’s history
• The team, who helps you to run the project, and how experienced these people are
• What helps you to stand out from competitors
• Your current financial state.

2. Local market analysis

Next, you should gather and summarize information about the other companies currently in your market that offers similar services to similar customers.

Try to find out as much information about your competitors as you can: what they offer, where they advertise, the resources of their capital and other key metrics.

3. Mission statement

If you still don’t have a mission statement, you absolutely need to create one for your IT services business plan. Your mission statement is the core of your business, and the reason why you do what you do. Of course, the first thing that you may think of is money. But let’s look a bit farther outside of your office. What value can you offer to the world?

Here are some good examples of what a strong MSP strives to do:

• Help small businesses create and maintain effective IT infrastructure
• Provide effective support for client hardware
• Develop and maintain efficient and secure IT systems to support all customers
• Become a technology leader and the best IT service in the provider’s local area.

Once you establish your mission, share it with your team to make sure that everyone has the same mindset and shares the same values.

4. State your vision

To create an effective mission statement, you need to have a clear understanding of where you would like your business to be in one, five and even 10 years.

What would you like your key metrics to be over time? How many clients do you plan to work with, and how much revenue do you want to receive on a monthly basis?

5. Set up clear goals and objectives

The following are the metrics that can be measured and expressed with the help of precise numbers:

• Number of customers
• Number of new customers you plan to onboard per month
• Monthly recurring revenue
• Number of devices to monitor
• Number of new devices to be added each month
• Number of workers

6. Structure of operations

This portion of your MSP business plan should contain a step-by-step guide describing how you plan to reach your goals.

List exactly what should be done on a daily basis, and what functions your employees need to fulfill. What should be done to set up your office? How will you scale your operations to correspond with your future growth? What kind of skills should your workers have?

Review every aspect of your business and list all current operations and any projected future needs that align with your business plan.

7. Marketing plan

As we’ve already stated above, you can’t rely solely on referrals. You should always have a solid marketing plan to attract new customers. Write down the sources that you’re going to use for advertising: your blog, CPC (cost-per-click) or CPM (cost-per-media) platforms to drive traffic to your website, or traditional media such as print and TV/radio advertising. Learn what b2b lead generation tactics you might want to use .

Calculate your advertising budget and how much you expect to pay per lead.

8. Sales plan

Finally, you should calculate and write down your sales metrics.

How many leads per salesperson do you expect to get per month? How many salespeople do you need in total? How much will each one be compensated per month? How are you going to compensate them for their efforts?

A solid business plan is an advantage for any managed service provider. Knowing what to expect in the near future and beyond can eliminate several headaches for a business owner.

When you know how to compose a business plan, you set up a strategic roadmap for your IT company and have something to show to potential investors. As soon as you implement the plan into your business processes, you will notice the benefits and how much easier your business processes become.

Alexander Negrash is director of marketing at CloudBerry Lab . Read more CloudBerry Lab blogs here .

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Developing a successful MSP Business Model: a comprehensive guide

Introduction.

In today’s technology-driven world, businesses rely heavily on efficient IT systems to operate smoothly. Managed service providers (MSPs) play a crucial role in assisting organizations by offering proactive IT management, support, and strategic guidance. However, building a successful MSP business model requires careful business planning, a solid business model, and the ability to navigate the dynamic landscape of the MSP industry.

According to a recent survey, the global managed services market size was valued at USD 267.3 billion in 2022 and is expected to grow at a compound annual growth rate of 13.6% from 2023 to 2030. In this article, we will delve into various aspects of developing a thriving MSP business, including the MSP business model, pricing strategies, targeting the managed services market, and establishing productive vendor partnerships in the managed services space. We’ll also investigate how Parallels RAS can contribute to your successful MSP business, and how you can become a partner today .

Understanding the managed service provider (MSP) business model

The MSP business model revolves around providing comprehensive IT services to clients, which are typically invoiced on a monthly subscription basis for a specified duration, typically through contracts spanning 1, 2, or 3 years. By combining multiple services into a monthly fee structure, MSPs provide clients with a comprehensive IT solution that caters to their needs. This model offers cost predictability, scalability, and the ability to offload IT infrastructure management to the MSP.

MSPs can establish long-term relationships with recurring revenue streams. Instead of relying on a break-fix approach, building an MSP business plan to focus on proactive remote monitoring, maintenance, and management of clients’ IT infrastructure is key. MSPs offer a range of services, including data backup and recovery, cybersecurity, remote management, hosted desktops and applications, cloud-based solutions, and help desk support. MSP clients benefit from access to robust IT services while focusing on their core business objectives.

When reconsidering building an MSP business model, there are several key performance indicators (KPIs) and objectives that can help gauge the success of your MSP. Meeting or exceeding service level agreements (SLAs), receiving positive customer feedback, and maintaining a low customer churn rate help to build customer satisfaction and loyalty, which are crucial for long-term success.

Profitability and cost management are also key considerations for an MSP, monitoring metrics such as monthly recurring revenue (MRR) growth, new client acquisition rate, and controlling operational expenses enable you to maintain a healthy financial position to ensure growth and success of your MSP business.

Parallels RAS offers MSPs a cost-effective solution by incorporating built-in security, multi-factor authentication, high availability load balancing, and streamlined management.

Identifying your target market

Identifying and targeting managed services customers is a critical aspect of building a successful MSP business. By understanding the specific needs, pain points, budget constraints, the local MSP market, and IT requirements of potential clients, MSPs can shape their services and pricing to deliver maximum value across all target markets.

SMBs often have limited IT resources and expertise, making them prime candidates for outsourced managed IT services. MSPs can tailor their offerings to address the pain points commonly faced by SMBs, such as data security, network stability, and scalability.

Mid to large enterprises typically have complex IT infrastructures, multiple locations, and a high demand for specialized services. MSPs targeting this market segment should emphasize their ability to handle large-scale projects, offer 24/7 support, and provide customized solutions. Addressing the needs of large enterprises, such as data governance, compliance, and business continuity, enables MSPs to develop comprehensive service offerings and pricing models that meet their needs.

Certain industries, such as healthcare, finance, or legal, have distinct IT requirements and compliance regulations. MSPs can specialize in serving these industries by understanding their unique requirements and tailoring their services accordingly. For example, healthcare organizations may require HIPAA compliance and data security expertise, while financial institutions may need robust cybersecurity solutions. By developing industry-specific knowledge and demonstrating compliance expertise, MSPs can position themselves as trusted partners within these sectors.

Setting the Right Pricing Model

Determining appropriate pricing strategies and MSP business plan is crucial for MSP profitability. Common pricing models include tiered pricing, per-device pricing, and per-user pricing. Each model has its own advantages and considerations, and MSPs must assess factors like service scope, client requirements, and market competition, as well as associated costs when setting prices. Flexible pricing options, such as bundling services, can provide value to clients while maximizing revenue for MSPs.

Tiered pricing : This model involves offering different service levels or tiers, each with a specific set of features and price points. Clients can choose the tier that aligns with their needs and budget. Tiered pricing enables MSPs to cater to a range of clients, provide flexibility, and upsell additional services as clients’ needs evolve and scale.

Per-device pricing : With this model, MSPs charge a fixed fee for each managed device (e.g., servers, workstations, network devices) within a client’s infrastructure. Per-device pricing offers transparency and predictability for clients and enables MSPs to scale prices based on the number of devices under management.

Per-user pricing : This model involves charging a fee for each user or employee within a client’s organization who requires IT support and services. Per-user pricing accommodates organizations with varying user counts and provides a straightforward pricing structure.

Conducting regular cost reviews are essential to ensure competitiveness and profitability in the dynamic MSP industry. Changes in vendor pricing, such as increased license and cloud storage costs, can impact MSPs’ profit margin. Managing these changes means managed service providers can adapt their business strategy and guarantee a sustainable pricing model.

Developing a service portfolio

MSPs create a service portfolio by combining various technologies and manufacturers to offer a comprehensive and integrated suite of managed services to their customers. MSPs need to understand their customers’ specific needs and pain points. This involves conducting a thorough assessment of their IT infrastructure and processes, identifying areas for improvement, and understanding their business goals. By gaining insights into customer requirements, MSPs can design a service portfolio that addresses their unique challenges.

For example, an MSP might partner with cloud service providers, backup solution providers, virtualization platform providers, and cybersecurity vendors. The goal is to curate a set of technologies that work seamlessly together to meet customer requirements.

The key lies in packaging these services together as a cohesive managed services business model and offering them within a single monthly billed service. By aligning services with specific industries or compliance requirements, MSPs can position themselves as trusted experts and drive growth.

The importance of vendor partnerships in the MSP industry

Vendor partnerships are vital for MSPs to deliver high-quality services to their clients effectively. Collaborating with reputable technology vendors provides access to innovative tools, software, and expertise, enabling MSPs to enhance their service offerings. These partnerships also facilitate efficient issue resolution, product training, and marketing support.

Building productive vendor partnerships requires a strategic approach. Collaborating with vendors who offer reliable products with a full feature set, comprehensive support, and attractive pricing helps MSPs deliver exceptional value to clients. Effective vendor management involves regular communication, staying informed about new technologies, and providing feedback for product improvement. Building strong relationships with vendors can lead to exclusive benefits including co-marketing opportunities, technical training, and enhanced customer relationships.

Implementing a robust sales and marketing strategy

By implementing a robust, well-defined sales and marketing strategy, MSPs can effectively target their desired markets, differentiate their services, establish competitive pricing models, and leverage vendor partnerships to enhance their sales and marketing efforts. MSPs can pursue growth strategies such as customer acquisition, expanding service portfolios, entering new markets, and nurturing client relationships.

A well-executed sales and marketing strategy combined with a strong business value proposition and supported by effective vendor partnerships can help to fuel MSP growth and build a successful MSP business model. Collaborating with vendors is essential for MSPs to access sales training, marketing resources, and technical support. Vendors can offer training programs to enhance the sales skills of MSPs’ teams and provide marketing collateral, co-marketing opportunities, and lead generation to support marketing plans.

Emphasizing customer service and satisfaction

Customer service and satisfaction are paramount within managed services. MSPs not only provide technical support but also become strategic partners in managing their customers’ important data, systems, and infrastructure.

Responsiveness and high service levels are essential in providing proactive support, managing critical customer data, and maintaining customer trust. By delivering exceptional customer service, MSPs can not only meet customer expectations but enhance customer satisfaction, build long-term relationships, and establish a positive brand image in a competitive market.

By embracing the MSP business model, understanding different pricing strategies, targeting the right market segment, and establishing productive vendor partnerships, MSPs can build a successful business plan to position themselves for growth and profitability.    Parallels RAS (Remote Application Server) is a comprehensive virtual application and desktop delivery solution that can be leveraged by MSPs to deliver virtual applications and desktops to organizations as part of a managed service solution. The seamless integration of Parallels RAS enables MSPs to provide a combined managed IT solution, encompassing virtualization, cloud services, data protection, and cybersecurity. And this enables MSPs to effectively manage and support integrated technologies, providing a comprehensive solution that meets their customers’ evolving IT needs.

• Easy deployment and management : Parallels RAS provides a streamlined deployment process, enabling MSPs to quickly set up and configure virtual applications and desktops for their clients. The management console offers a centralized interface to efficiently manage and monitor the entire infrastructure.
• Scalability and flexibility : Parallels RAS is designed to be scalable, enabling MSPs to easily accommodate growing customer demands. It supports various deployment scenarios, including on-premises, hybrid, or fully cloud-based, providing flexibility to tailor the solution to the specific needs of each client.
• Multi-platform support : Parallels RAS supports a wide range of platforms, including Windows, macOS, Linux, iOS, and Android. This enables MSPs to deliver virtual applications and desktops to diverse client environments, ensuring compatibility and accessibility across different devices.
• Security and compliance : Parallels RAS incorporates robust security measures to protect client data and applications. It includes features like two-factor authentication, SSL encryption, and granular access control to ensure secure remote access.
• Cost efficiency : Parallels RAS offers MSPs a cost-effective solution by incorporating built-in security, multi-factor authentication, high availability load balancing, and streamlined management. It supports integration with popular hypervisors, such as VMware, Hyper-V, and Nutanix AHV, enabling MSPs to utilize their preferred virtualization platform. By leveraging these features, MSPs can enhance security, minimize downtime, and improve productivity. This ultimately leads to significant cost savings and operational efficiency gains.

Learn more about how to become a Parallels RAS Partner.

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How to Build a Successful MSP Business

Many MSP owners struggle with building their businesses when they’re focusing on improving the wrong aspects of their operations.

The key to growing a successful business is always to enhance what matters to your customers. By doing so, you put yourself in a better position to make the right decisions more easily when the pressure is on.

Even though building a successful MSP business takes time, if you stay dedicated to reassessing the way you operate when necessary, your likelihood of thriving is high.

How’s your tech support?

The fact is that your customers are primarily concerned with IT support. They want to know you’re going to work to resolve technical issues when they arise, as quickly as possible. Failing to deliver this essential service to your customers in a timely manner could prove disastrous for your reputation.

So, do yourself a favor and evaluate your help desk ticketing system . Is it enabling you to provide the best support you can possibly provide? If not, compare it with other available solutions. There are plenty on the market today, so test out as many as possible.

Also, consider the following. What are you doing outside of your help desk solution to ensure you’re on top of your tickets? Have you implemented IT ticket management best practices? What about your people? Are they properly trained? Alternatively, you might consider help desk outsourcing to resolve issues faster and to boost your performance.

Further reading Creating an Effective MSP Help Desk

Ensure consistent delivery of service for each case: use a Standard Operating Procedure for handling incoming support calls.

Deliver more than just IT services to your clients — provide business solutions

Businesses typically turn to MSPs when they’re having issues with their IT infrastructures. While this isn’t necessarily a bad thing (since you’re in the business of delivering IT services to businesses), top MSPs expand upon their offering by encompassing more than just IT — and this sets them apart.

Instead of simply delivering IT services to your clients, assess how you can help with solving their complex business challenges . Become part of those discussions by asking the right questions and evaluating and understanding their unique business models. For example, could you assist them with streamlining business processes by implementing new-technology solutions? What about improving the way your clients' customers interact with them? Is there anything you can do from a technology standpoint to improve that experience?

Top MSPs take a holistic approach when assessing customer needs. By thinking too narrow, you leave money on the table. Always look at the bigger picture if you want to come out on top as an MSP.

Further reading How to Enhance Customer Experience

More From Forbes

What to consider when you're starting an msp business.

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Becoming a business owner and working toward financial freedom is a commendable idea, but starting a new business requires a lot of research and planning. The managed service provider (MSP) business is no different. But considering the general outlook of the managed services market, I think this is a great time to start your own MSP business.

Between 2019 and 2025, Grandview Research estimates that the CAGR for the MSP market (paywall) will be around 11.7%. I expect this high growth potential will attract a lot of competition to the industry.

However, this certainly doesn't mean you cannot grow in the MSP world. Laying down a proper foundation is extremely important if you're looking to thrive in the managed services domain. But before you jump on the bandwagon, here are a few things you should focus on to keep your head firmly above water in the MSP industry.

Develop Your Offering

While they're transitioning to managed services, most IT service providers make the mistake of offering what is popular in their industry. Instead, your offering should be based on your strengths, existing clientele and location.

When you're developing your offering, you should also think about the value of your services to your clients. Your services should offer a unique value proposition (UVP) that sets you apart from your competition.

Many MSPs thrive by specializing their offerings for a particular vertical. When you become an expert in a vertical, you understand the customer's space and know their pain points. With this knowledge, you can serve your customers better and boost customer satisfaction. Satisfied customers could bring in more referrals, and you can use their testimonials to appeal to top players in the vertical and take your business to the next level.

Choose The Right Software

Many MSPs use software to help manage the endpoints of their clients and help with the business side of running an MSP.

Some MSPs make the mistake of choosing the least expensive solution in the market. This may not get you anywhere because your functionalities could be extremely limited. The requirements of MSPs vary from one another, so you need to find a solution that helps you provide great service and boost profitability. Before you choose your software, ask the following questions: Does it provide the IT functions I need? Do I require mobile capabilities? Can this software streamline the work process and reduce the cost of providing service?

When you answer these questions, you will be able to narrow down your choices to the right solution for your requirements. The goal of this technology should be to streamline your work process, bring down the cost of providing service and boost customer satisfaction.

Focus On The Business Side Of IT

Any new business requires proper planning and a road map to execute said plans. Sometimes, technology experts who start MSP businesses find it hard to get a grip on the business side of things. IT managers can delve into the business side of technology by tracking certain metrics that provide a better understanding of how the business is doing.

Some of these metrics include ROI, monthly recurring revenue, average profit margin, average deal size, customer churn and customer satisfaction. As you start tracking these metrics, you can identify the redundancies in your operations and come up with a strategy to eliminate them.

Apart from tracking growth, you should create a sales and marketing strategy to advertise your services to your target market. You need to have a clear strategy on how you are going to generate leads for your business and how you are going to convert those leads into customers. As you gain more customers, you should also have a proper support team in place to ensure the continued satisfaction of your existing customers.

Determine Your Pricing Strategy

Pricing is one of the critical factors that could make or break an MSP business. For MSPs that are just getting started in the industry, coming up with a pricing strategy can be quite challenging. I haven't noticed any fixed pricing pattern in the industry because every MSP is unique. You need to come up with a strategy that aligns with your service offerings and business goals.

There are various MSP pricing models that the industry follows. Some widely used models include per-device pricing, per-user pricing, tiered pricing and a la carte pricing. Before you decide which model best suits your business, find out the benefits and advantages of each model, and take into consideration the models your direct competitors are following.

Often, MSPs face the difficult choice of either lowering their prices or losing customers. For new entrants, it could be tempting to drop prices as low as possible to bring in more customers. However, this could affect your growth potential and prove to be unsustainable as time goes by. Besides, if your prices are the lowest in the market, you run the risk of being perceived as cheap by SMBs that are willing to pay a premium price for high-quality services. You should find the right balance when you're pricing your services based on the value you offer to your clients.

Establish Strong Vendor Relationships

MSPs typically act as a liaison between their clients and various IT vendors. These IT vendors provide a range of solutions, such as remote monitoring, business ticketing, cloud backup, antivirus and more. These solutions are critical to the services that MSPs offer. When you're buying new solutions, you need to invest some time in the market and identify the right solution stack that you can resell to your clients.

You cannot establish strong vendor relationships overnight. You should take a long-term perspective when dealing with vendors. Communicate with them more often, and air your grievances immediately. As you gain more clients and acquire more experience in dealing with multiple vendors, you can build strong vendor relationships and use their technologies to help your clients.

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Managed Service Provider (MSP) Business Plan Bundle

About this item.

• Actual Sample Managed Service Provider (MSP) Plan
• Step-by-step Guide
• Business Plan Template
• Financial Worksheets

Product details

• Date First Available ‏ : ‎ October 18, 2011
• Manufacturer ‏ : ‎ Printedtree Publishing
• ASIN ‏ : ‎ 1623044863

Product Description

This bundle offers you everything you need including a sample managed service provider (msp) plan, business plan template to quickly create, edit, and print an professional formatted business plan, step-by-step business plan guide to walk you through the processes of creating a business plan one step at a time, A business plan presentation template, financial statement worksheets covering cash flow, profit and loss, sales forecast, cost of goods, break even and market analysis for your business plan, essential business forms, sales letters, necessary business letters, and legal forms, and a resource directory featuring contact information of businesses, professionals, and public sources for more help.

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12-Month MSP Marketing Plan to Get New Clients Consistently

Download this MSP marketing plan for proven month-by-month steps to generate qualified IT leads. You can also use this as part of your MSP sales plan. This free pre-written MSP marketing plan and template is in a checklist format to make it easy to customize and implement for your IT company.

Table of Contents

What is an MSP Marketing Plan?

MSP marketing is a strategic approach to growing your MSP business through specific marketing activities that generate qualified leads. It starts with creating your ideal client profile, also known as your buyer persona. Then, create or acquire MSP content that shows off your IT expertise in order to attract qualified clients. This allows you to use educational MSP marketing content to promote your business and nurture leads so they become “sales ready” to buy your IT services.

This MSP marketing plan template allows you to start quickly using copy/paste to get your plan started. Then, make edits as you would like – or simply follow the exact steps in the MSP marketing plan – to generate new business.

How to Use This MSP Marketing Plan

Here’s how to use this MSP marketing plan to grow your IT services or managed service provider business:

1. Download this MSP Marketing Plan (edit in Word, Docs, Pages):

2. Make edits to customize it for your business based on your time and resources 3. Follow the monthly steps to grow your IT business

To make it even easier, we’ve created a series of free MSP marketing tips to guide you through proven marketing strategies that result in more business.

Why MSP Marketing Is Critically Important

Before you read on, I want to share the eye-opening market potential in your local area.

This quick video shows how many people are searching on “managed service provider” and related terms. It’s a big number, and by following this MSP marketing plan example, you can stamp a bigger footprint for your services in your local area.

It’s not rocket science. Rather, it’s block and tackle marketing. Use the techniques in this plan to grow your business.

MSP Marketing Strategy

This MSP marketing plan is written as a monthly checklist. It uses a proven MSP marketing strategy that uses educational marketing to build your brand so clients think of you first for MSP services.

Why an MSP marketing checklist?

Lists allow you to review each item and check it off as you do it. You can edit the tasks in this plan to make it your own. For example, change “Month 1” to “April” and so on.

You will notice that once a specific task is defined, such as creating an ideal client profile, we do not list out the detailed steps when you do that task again in future months. Just refer back to the earlier month in which you did the task.

You will also notice a theme: repetition.

MSP marketing is not something you do once in a while. There is deliberate consistency in messaging and actions in a good MSP marketing strategy. You will see actions that you do one month fall into place in future months.

More so, your sales team will leverage the activities in this plan as part of a MSP sales plan. They need educational content to stay top-of-mind with prospects. This MSP marketing plan will help you do this consistently.

Knowing Who You Are Selling To

A tighter message to your target audience enables you to sell faster and easier. Use our free 5 buyer persona examples for MSPs, which include key messaging points to help you craft your words.

Before You Start Doing Any MSP Marketing

Every company is different so you should tweak this plan according the time you can commit. Whatever you do, don’t start and stop. MSP marketing done in fits and starts doesn’t work. That just wastes your time and energy – and money.

If you are serious about growing your company, dive in! A world of treasures awaits you. Good luck with your business!

And also take a look at our in-depth guide on search engine optimization specifically for MSPs:

• MSP SEO and the Ultimate MSP Keywords That Capture Leads

If you’d like a detailed proposal on our MSP SEO Agency service, fill out this form:

12-Month MSP Marketing Plan

Msp marketing plan – month 1.

• Make a plan (or just edit this one), pick your team or sources of pre-written material (like MoreBusiness.com ) to help with your marketing content, newsletter, blog, slide decks. You can download this editable plan here:
• Organization size
• Job title and role within the organization
• Who has budget authority
• Key problems they face and how your solutions saves time, money and relieves headaches
• Roles of influencers (e.g., internal IT, accountants)
• Buying cycles
• Professional associations they join
• Conferences they attend
• Publications they read
• Set up a SendinBlue email marketing account to send an email newsletter automatically from your blog posts (watch our webinars)

Second half

• “Hi John, this is ____ from ABC IT Solutions. We’re taking a quick survey of our customers and I was wondering if you had 3 minutes to spare – I’ve got some really simple questions.”
• Who else was involved in the decision process?
• What factors were important in your evaluation?
• Why did you pick us over others?
• Where did you find out about us?
• What associations do you belong to?
• Which conferences do you never miss?
• … maybe other people in <association name>?
• … or your accountant/lawyer?
• Identify organizations your clients belong to
• Attend 1-2 networking events
• Review/redo web site with educational marketing content (use pre-written pages from MSP Website Content Kit , 7000 words ready to copy/paste)

MSP Marketing Plan – Month 2

• Review your buyer persona for “client pain points”
• Write headlines for 6 articles that would help a client
• Write the articles or have them written (or license them from MoreBusiness.com)
• Send 3 articles in a newsletter, post to blog
• Attend 2 networking events
• How to Protect Your Business From Ransomware Attacks
• The Most Overlooked IT Security Holes That Hackers Exploit
• Create a YouTube channel
• Post the videos on YouTube
• Mention the videos in your social media accounts

MSP Marketing Plan – Month 3

• Send next newsletter, post remaining 3 articles to blog
• Attend 2 events, register for 2 next month
• Continue interview/referral calls to existing customers
• Identify partnership opportunities
• Identify headlines for next set of 6 articles, write content or acquire it from MoreBusiness.com
• Contact 5 organizations that your clients belong to and offer to host a webinar, seminar or lunch-and-learn
• Share article links on LinkedIn (do this every month)

MSP Marketing Plan – Month 4

• Send next newsletter, post 3 articles to blog
• Attend 2 events, register for 1 for next month
• Draft a guide/white paper based on first seminar topic
• Send press release to promote your seminar next month
• View email analytics to see who is interested in what
• Contact those who clicked on articles to start a dialog
• The Most Common Ways Hackers Get Into Your Systems
• What’s the Difference between a Hub, a Switch, and a Router?
• Record a video using the slides and post to your YouTube channel

MSP Marketing Plan – Month 5

• Present first seminar at association meeting; give guide
• Print & mail guide to warmest prospects
• Attend 1 event, register for 2 for next month
• Setup next association seminar

MSP Marketing Plan – Month 6

• Assemble a guide based on prior articles that are similar
• Attend 2 events, register for 2 for next month
• View email analytics; make contact
• Identify possible trade shows/conferences to exhibit at
• The Differences Between Cloud Sync, Backup, and Storage in Plain English
• How to Protect Your Business From Phishing Attacks

MSP Marketing Plan – Month 7

• Print & mail newest guide to warmest prospects
• Present seminar at next association event
• Call newest clients to ask buyer persona questions
• Setup next association seminar event

MSP Marketing Plan – Month 8

• Draft a guide based on newest seminar topic
• Send press release to promote next month’s seminar

• Post guide(s) to web site behind form; advertise link
• 6 Important Data Backup Considerations
• How to Build a Disaster Recovery Plan
• Record as video and post to YouTube

MSP Marketing Plan – Month 9

• Present next seminar at association meeting; give guide
• Setup next association seminar; promote next month’s

MSP Marketing Plan – Month 10

• Attend 2 events, register for 2-3 for next month
• Call newest clients with buyer persona questions
• 5 Reasons Even the Best Free VPN Services Are Not Safe To Use
• Everything You Need To Know About Patch Management

MSP Marketing Plan – Month 11

• Assemble a guide based on prior articles that similar
• Identify headlines for next set of 6 articles, write content or acquire it from MoreBusiness.com’s MSP Marketing Content Library

MSP Marketing Plan – Month 12

• Develop/repurpose next seminar topic
• Review MSP marketing plan
• Identify steps and budget for next 12 months

MSP Marketing Plan Implementation Notes:

• Attending networking events can be done any time during the month. The task is listed in the first or second half just for ease of documentation, not for when your networking events will actually occur.
• You should publicize your blog posts to LinkedIn each time you post something. We’ve only listed it here once, but you’ll get more out of your MSP marketing plan when you do it each month.
• One way to send press releases is through online wire services, which can get your announcements placed in dozens (even hundreds) of publications.
• For trade shows/conferences, you will have to put those into your MSP marketing plan. We haven’t listed them in any particular months because they would vary based on where you are and who you target.
• For promoting your guides, you can advertise via links on association pages, LinkedIn, or even try Facebook. The key is to give away a useful piece of content that people would be willing to exchange their contact information for. Attend our MSP SEO Crash Course to learn ways that increase qualified leads from your website.
• Printing and mailing guides is not required for smaller budgets.

If you haven’t already done so, download this MSP marketing plan in Microsoft Word format for easy editing:

Get Pre-Written MSP Marketing Content

MSP marketing when done properly can help you achieve big goals. You can double or even triple the size of your business. In this MSP marketing plan, there are many tasks and you may find it overwhelming at first. That’s why it is best to leverage other resources at your disposal, like pre-written MSP marketing content.

Additional Resources to Make Your MSP Marketing Easy

MoreBusiness.com’s Content Kit can make your MSP marketing plan much easier to implement than doing it all on your own. It will help you attract new leads, boost referrals and close more business.

Two easy options to fit your budget:

• MSP Website Content Kit – get 11 in-depth, pre-written SEO-friendly pages for your MSP website, $399  $299 using discount code website100
• Content Library – access over 10,000 articles that you can edit – private label rights give you the ability to use them as your own articles

Get started today!

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MSP Business Proposal Template

In today's competitive businesslandscape, Managed Service Providers (MSPs) often struggle to create effectivebusiness proposals without a well-defined template. This challenge can lead toinconsistencies, missed opportunities, and a lack of professionalism.

This Business Proposal Templateoffers MSPs a structured framework to address client needs efficiently. Byusing this template, MSPs can clearly articulate their project overview, scopeof work, deliverables, timeline, cost, payment schedules, and terms andconditions. This ensures that both the MSP and the client have a clearunderstanding of the project details and expectations from the outset.

Used by 156 people

Unlock new business opportunities by leveraging our easy-to-use Business Proposal Template tailored for MSPs

Create winning MSP proposals effortlessly with our comprehensive Business Proposal Template.

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Zomentum has truly transformed our proposal process, making it more efficient and professional. With its revenue automation features, we've experienced a remarkable increase in productivity, saving us valuable time. The AI Writer is a game-changer, allowing us to create personalized and high-quality content for each proposal quickly. It has significantly improved our lead conversion rate, enabling us to focus on the next opportunity.

Zomentum has helped us in tracking quotes from customers without having to send PDF attachments in our e-mails and manually sign them. The support team is very receptive and always takes our suggestions in order to make it a better tool. I hope they continue improving it with more and more integrations to reduce manual entries as much as possible.

From quotations to opportunities, Zomentum helps us streamline the complete sales process, everything within a single, easily accessible dashboard. It also helps us to track the total number of proposals, leverage automation to send reminders to customers who haven't signed, and receive weekly updates on opened proposals. And on top of this, it integrates well with Connectwise flawlessly.

Initially, we used it to overcome Microsoft's NCE hurdles with digital signage agreements. But then we discovered its versatility. Now, we rely on Zomentum to effortlessly build proposals, create business cases, and attach quotes directly to the proposal. The platform enables us to track project progress and provide real-time feedback to our customers. It's streamlined our entire process, from proposal to billing. And it also integrates seamlessly with Autotask - our PSA and allows us to pull products and services from our inventory effortlessly.

With the AI Proposal Writer, we save 1 hour every day, allowing us to focus on other important tasks. The Template Library has been a lifesaver, enabling us to swiftly create quotes across various products. Zomentum's standardization of our proposals ensures consistent messaging for all clients, resulting in improved quote-to-closure rates.

Join leading IT Partners who use Zomentum to design their proposals and close deals faster.

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