When I think back to the heady days of starting my first MSP some 20 years ago, my memories are full of excitement and all-encompassing panic. I’m sure many of today’s MSPs can still relate to these feelings.

Like many, I entered the MSP market from a tech background, originally operating as a one-man IT band. In its early stages, an MSP feels financially safer than most startups, since a single customer means a guaranteed regular income (providing you keep the customer of course!). However, that doesn’t mean you shouldn’t adopt a startup survival mentality.

After all, the other similarities to startup and sole trader culture are also present: suffering from any time taken off away from the company and a lack of expertise in certain areas. This is to be expected, but can be damaging in an MSP’s early stages.

That startup mentality remained as we took on our first employees. After a particularly successful early project, we wound up with access to over 100 customers and needed to quickly grow our team to keep up.

We still didn’t have an office at this point, so we all worked remotely. Like any startup, we shared responsibilities, regardless of how much we did or did not know about the many roles we were sharing.

Getting serious

Many MSPs will stay at this stage for some time, which is exactly what we did. After getting comfortable, and confident in our own ability, we finally found the headspace to begin thinking about our future as a company.

It was at this point we realised that, there was a lot more we could be doing. From here we turned part of my house into our office, got uniforms, started nurturing and better understanding our customer relationships, and took things up a notch.

This is a defining moment for any MSP. For us, it was the moment we saw what we needed to do to transform from a scrappy startup to a bonafide business. 

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We started making better decisions. We brought more senior people on board, introduced a help desk, employed technicians to ensure we had all the expertise we needed, and truly began to operate as a team.

Ultimately, we became a much better business. We began looking forward by planning for the future and strategically thinking about our growth; which is something that we hadn’t done much of previously. I’m sure any MSPs reading this can relate.

Turning it up to eleven

Our evolution didn’t stop there. At some point in an MSP’s growth, the penny drops and they learn just how much of an impact technology can have on the day-to-day of their business strategy.

In our case, this happened when we implemented an ERP system, which allowed the whole company to communicate, collaborate, and stay abreast of all the moving pieces that had previously lived in scattered, disparate places. This had a profound impact on our business, but the frightening part is that we almost decided against it. We were so used to operating in the early stages of MSP growth, with little finances available, that taking the step towards an expensive system like this was still a scary prospect. We finally bit the bullet though, and it totally transformed the way we operated.

From there growth continued for us at a steady rate, before eventually plateauing. Many MSPs will face this same challenge once they reach a certain size. Many business advisors will reassure you that this is par for the course. The challenge lies with what you do next. 

Without a major change to our business, we were destined to become stagnant. Rather than stubbornly continue to try and grow beyond our means, we explored alternative avenues to take our business to the next level.

We achieved this by merging with another MSP, but the solution will naturally vary for each individual MSP. After a lot of research, negotiating, and time spent getting to know one another, we merged with a similar organisation. This was the biggest change we ever faced.

Our chosen MSP had a similar customer base to ours, less rigidity, and a different senior structure. We learned a lot from one another and it was truly disruptive, in all the right ways.

Go your own way

Every MSP journey is unique. What worked for one may not hold the same results for another. However, there are a few qualities I’ve seen in my time that always deliver.

Those that do well have strong vendor relationships that they nurture. They often exclusively sell that one vendor end-to-end, eventually becoming a preferred supplier as a result. I’ve seen this have lasting impacts on an MSP’s success, especially compared to balancing relationships between several vendors and struggling to service them all.

For the individuals at the helm of MSPs, those with a clear roadmap tend to succeed. I didn’t have an exit strategy or future plan until some years into my MSP journey. I’d advise anyone in a similar position to adopt one as early as possible. Having an idea of where you want to end up will keep you on the right path along the way.

After all, it’s easy in this industry to lose sight of things. Having a map to guide you that you can regularly check, will help you navigate the many stages of MSP growth.

Ready Set Managed

Photo:  markara / Shutterstock

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Posted by Andy Cocking

Andy Cocking was one of the founding directors of Computeam, a UK MSP which focuses on the education sector. Since leaving the company after 20 years of service, he has become regional account director at Barracuda MSP.

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