Q: In 2018, we really want to grow our MSP business. We’re having trouble putting together business plan that will help us do that, though. Where should we start?
Writing a business plan plays a key role in your MSP success. In fact, a survey showed that 79 percent of businesses with a business plan are financially better off, compared to a year ago. Before 2017 comes to a close, take some time to reflect on how the past year has gone and what business goals you want to achieve in the coming year.
When it comes to business planning, it may seem helpful to come up with an extensive plan, but instead we recommend formalizing your plan in a one-page document. This makes it easy for you and your employees to reference the plan and stay focused on your company-wide goals and expectations throughout the coming year. Here are our three key steps to developing a successful one-page business plan for your MSP:
Step 1: Define your business values and priorities
A successful business plan highlights your business values, priorities, and the vision you have for the company. To make sure everyone is on the same page, write out a brief description of your company’s values. For example, values for an MSP could include responding quickly to all tickets, working with customers to identify their needs, and collaborating as a team. It’s also helpful to explicitly state the priorities for your MSP business, so your team understands what projects and goals are most important. This could include your unique value proposition and what kind of service you want to deliver to your SMB customers.
A good way to gauge where your priorities are for the coming year is looking at your current strengths, weaknesses, opportunities, and threats (SWOT). By spending the time to think through these parts of your business, especially the industry trends and potential threats to your business, it can help you prepare to handle market changes. To really grow your managed service business, think about any opportunities you want to capitalize on in 2018. For example, more SMBs are looking for managed security services. Can you viably add security services to your portfolio to fit this need?
Sharing your business’ values, priorities, and SWOT in your business plan will help motivate your employees by letting them know exactly where your business is headed and how they fit into the plan.
Step 2: Identify key metrics
Next, figure out the high-level numbers you’d like to achieve in the next year, such as revenue and profit. Once you’ve determined these numbers, you’ll need to set a few key performance indicators (KPIs) to help measure your monthly — or weekly — progress. By measuring your monthly metrics against these indicators, you can catch any problems or roadblocks early on and steer your business in the right direction as a result. A few KPIs that you might want to track include the number of new customers added, the average revenue generated per account, cost of acquisition, and close rates. Your business’ KPIs will depend on your business model, values, and goals. So, you’ll need to choose the metrics that matter most for your business.
Step 3: Document short- and long-term goals
Finally, you should document both short- and long-terms goals that will guide you through a successful 2018 and beyond. Think about where you want your business to be in three years, and use that perspective to help you figure out where your business will need to be in two years, in the upcoming year, and even in the next six months. What steps will you need to take to achieve this growth? Break down your vision into small achievable milestones that you and your team can easily accomplish. You need to know what your long-term goals are so you can set short-term objectives and chose the key initiatives that will help you reach those goals.
One thing you can also include is a Big Hairy Audacious Goal (BHAG) that you’d ideally like to reach but that will require considerable effort. For example, if you’re trying to transition your business model to focus more on managed services, your BHAG might be making break-fix services account for less than 10 percent of annual revenue. It’s good to include a goal like this because it will inspire your employees to think differently about their work, hopefully sparking new ideas and discovering creative solutions to business challenges.
Once you’ve identified your business’ values and priorities, key performance indicators, and short-term and long-term goals, you’ll have a comprehensive one-page business plan that will help you achieve MSP success in 2018.
Photo: Rawpixel.com / Shutterstock.