Ian Richardson is a man who believes in the power of process and profitability (and he’s positively passionate about those points). He believes that in an MSP business, there are many secrets to success, but there are a few in particular that he swears by.
For example, it's vital to come up with and document all processes. Chart a course and stick to it, no matter what. He also touts the importance of setting up a strict budget to manage profitability.
“Figure out a financial target for bottom-line profit, as well as a true pricing scheme for your offering, and stay within those lines,” says Richardson.
Richardson sat down with us this week to go through his tried-and-true tips for MSP success, including power of the "p's." And other delightful alliterations.
1. Document all processes that are key to the business.
Do this up front. Choose the most important 20-40 items that are vital to your business and get them documented using a method that is simple, yet effective. Once you’ve done this, train in-house and outsourced resources on these processes frequently.
“Almost all of our issues to date have come from a communication failure, which is normally driven by someone ‘doing their own thing’ in some way, shape, or form — outside of a normal process,” states Richardson. “If you outline the ‘way’ things should done from the get-go and do not stray, things will be more predictable for everyone involved. When it comes to processes in business, predictable is good. Surprises are bad.”
2. Outsource items that are commodities.
Technical skills have become productized. Customers aren't paying for a service that one MSP does better than the next; instead, they're paying for a product (tech support) that's going to be the same at every MSP.
For example, a customer calls needing a password reset. This is something that eats up a significant amount of time for help-desk technicians. Why waste your in-house talent on these mundane tasks that generate no revenue?
Outsource the lower-end skill sets that anyone can do, and focus on using employee/in-house assets on billable items that add value (configuring a new system, troubleshooting an integration, installations, consulting, training).
If you’re doing a fixed-fee model, figure out something that will deliver fixed costs for service, and mark it up. You will scale much faster if you do this from the beginning.
3. You don’t need to be excellent at everything.
You only need to be excellent at the things that matter. Everything else is a distraction, and can dilute your business. Play to your strengths — find your core competencies and stick to them like white on rice.
For example, it’s fine to do managed print or telephony if they are a core competency. If not, simply accept the fact that those are things you do not offer, and move on. Don’t get mired in IT functions that are outside of your scope; you have to be OK with saying no.
Shiny objects can be a large, costly distraction, but it's to your benefit to keep your eye on the prize(s). This increases your strategic significance as an MSP.
Ian Richardson is the chief executive officer and founder of Doberman Technologies. Ian has 15 years of IT experience, and has been nationally recognized as a leader in his field. Doberman Technologies is a small business I.T. services firm that exists to help our clients achieve their goals through our team. Doberman holds partnerships with Microsoft, Cisco, and Lenovo, and specializes in Healthcare I.T. support, security, and compliance management.