Recently updated on October 25th, 2022 at 11:29 am
With trillions of dollars being spent on technology every year, businesses large and small have found themselves pouring growing amounts of their revenue into IT. That’s great news for you if you’re thinking of opening up an MSP business!
MSP (managed services provider) is a term that describes professional organizations that work as external contractors to solve client IT needs. If you can get your MSP business off the ground and connected with clients, you can do extremely well. Accomplishing that, however, is no small feat.
Curious to know what steps you can start taking today to realize your MSP dreams? If so, we welcome you to keep reading.
1. Know Your Stuff
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If you’re going to compete in the IT sector you must have a good handle on what business IT needs to look like and how to address them. We’ve seen many entrepreneurs try to enter the MSP space with no IT background and the intention of hiring the brains they’ll need to be competitive.
While that strategy works for some, believe us when we say that as a startup, it’s important that you are one of the leading minds in your business. If you leave all professional expertise to hired hands, you’re going to struggle to carve out a direction for your company.
Getting a trade degree in IT is a great place to start if you’re looking to amass education in the field.
2. Assess Your Market
Do the businesses in your area need an MSP business? Typically, you’d want to target companies that are in the small but growing to the mid-sized business range. That’s because ultra-small businesses usually don’t have the budget for IT and large companies have internal IT teams.
The good news is that if you don’t see the right businesses in your community to target, a lot of managed IT services can be done remotely. That enables you to target people outside of your geographic market.
We’d still recommend starting your MSP business plan by working with local businesses and then scaling into remote, long-range relationships, if possible.
3. Identify What You Can’t Do
We mentioned earlier that you don’t want to hire your way out of the issue of having no IT experience. On the other hand, if you’re somebody that’s versed in IT but are not an expert in certain facets of it, you’d do well to bring on people that compliment you.
As a start-up, it would be optimal to hire a business partner that can work on the promise of owning a piece of the company. That way, they’ll be more involved and you won’t have to worry about payroll expenses.
If you don’t know any partner-material people, you can bring on subcontractors or employees to fill in your knowledge gaps so you have a full service to present to your first few customers.
4. Develop a Marketing Plan
You know about IT. You know where your customers are. You’ve filled in your expertise gaps… Now it’s time to take your IT talent to your target customers via a robust marketing plan.
Marketing can be difficult, particularly in the competitive realm of IT. That’s why we always advocate startups that work with professional consultants which you can click here to learn more about.
If you opt for the DIY approach, consider a localized campaign to start (leaving brochures with businesses in your area for example). You may then want to expand to PPC ads that are targeted at your community, social media posts, and similar digital marketing techniques.
5. Collect Social Proof
One of the most powerful drivers of quality marketing and customer acquisition is social proof. For the uninitiated, social proof is when people with credibility say that what you do works and is worth the investment.
The most obvious example of social proof that we see today is reviews that people leave on Yelp, Google, and other platforms.
When you’re first starting an MSP business, one of your top priorities as you get customers should be turning their experiences into social proof. Even if you have to bend over backward to get it, ensuring that your first 5+ customers have 5-star experiences and that they share those experiences will be invaluable to your business picking up momentum.
6. Pivot and Scale-Up
By now, you’ve managed to sell your first melody of services to your first few customers. Hopefully, your transactions have been well received.
If they haven’t been, perfect your current products and customer relationships. Once you get those right, start adding more products, take on remote clients, raise rates, and start expanding your venture.
With inflation and competition hitting markets daily, if you’re standing still, your MSP business continuity will fail. Don’t get too comfortable and always have an eye on taking your organization to the next level.
7. An MSP Business Is a Venture That’s Built for Tomorrow
A common concern that smart business owners have when launching ventures is whether or not their companies will be relevant in the future. While the answer to that question is not “yes” for all businesses, for an MSP business, it is.
Consumer and business leaders are relying on technology more every day. Not less. You providing services that enable them to get more out of those interactions is something that will always be in demand.
We hope we’ve given you the guidance and the confidence you need to start building your company. If you’d like additional insight on the MSP business model, MSP services, or related topics, we invite you to read more of our blog content.