What the JOBS Act Means for MSPs
Critics who call President Obama “anti-business” may need to reconsider that assessment in light of the JOBS (Jumpstart Our Business Startups) Act he signed earlier this month. The bipartisan legislative package is intended to increase capital formation, accelerate the growth of startups and entrepreneurial ventures, and ease the process for privately held SMBs to go public. One of its key measures legalizes “crowdfunding,” or the raising of equity capital from private investors who may not meet SEC accreditation, with certain restrictions.
The JOBS Act only officially became law earlier this month, so it will be a while before its effectiveness at stimulating the growth of SMBs can be assessed. However, assuming that the bill is even moderately successful, MSPs who specialize in serving SMB clients have a great opportunity to help bolster the growth of SMBs while increasing their own profitability. MSPs should develop two strategies in response to the JOBS Act, one for new startups and one for existing private companies that go public.
New Startups Need Pretty Much Everything
Especially in this age where a “startup” often consists of little more than a concept and garage space, new startups enabled by the JOBS Act will need pretty much every type of managed service you can think of. Tech-oriented startups (while the JOBS Act does not specifically focus on the tech sector, it’s safe to assume most of the new companies relying on crowdfunding and other new sources of capital will be IT-focused) will probably have their basic IT infrastructure taken care of, but these companies will still need help in areas such as finance and accounting, HR, marketing/sales, and general operations.
MSPs can provide immediate, on-demand access to software packages that ease the management of all these important business functions, without the hassle of systems implementation, integration, maintentance, or having to hire extra staff. Reducing the need for staff is one of the most critical advantages MSPs can offer startups who do not have the money to pay employees or the time to invest in finding and training qualified people.
SMBs Going Public Must Step Up Their Game
A privately held SMB planning to go public is most likely already successful and has most of its day-to-day IT and operational needs under control. However, these companies still need to “step up their game” in areas such as compliance and reporting, and undergo rigorous due diligence. Also a shift in focus to quarterly earnings, instead of the longer-range profit goals many private SMBs pursue, means they will have to analyze and report differently. MSPs can shoulder much of the new workload going public creates, and also provide quick and easy access to additional IT resources newly public companies may suddenly find they require.