So you want to be a manged service provider? Recurring revenue from multiple customers sounds wonderful. But don’t forget, MSP rewards also involve some big risks. Johnny Kessel, one of the most vocal managed service providers I’ve met on the Net, has created a list of seven potential traps awaiting MSPs. Here’s a rundown of the challenges you’ll face when leaping from IT solutions to managed services, according to Kessel.

1. Blowing Your Entire Budget: I’m paraphrasing here. Johnny uses colorful language to describe a key mistake many VARs make — purchasing too many MSP platform licenses, which drive up costs before you even get on your feet as a managed service provider.

2. Customer Retention: Think you’ll keep all of your customers? Johnny says you won’t… and he provides some great reasons why that’s the case.

3. Network Operation Center Costs: Do you really need all of that big iron or should start small? Again, some great analysis here from Johnny.

4. Flying Solo: You can build a managed services practice or you can offer on-site break-fix support.
But you can’t do both, Johnny insists.

5. Overnight Sensations: Don’t count on instant success in the market. You’re gonna need at least six months to get your managed services off the ground.

6. Careful with Those Consultants: They want to share the secrets of MSP success, but you’ll need to open your wallet to get some basic advice.

7. Service Level Agreements: Do you need them in the MSP world? Johnny has some strong opinions on this question. Here’s his original post, along with extended analysis of each MSP challenge awaiting VARs.