MSPmentor

Anybody with a competitive bone in his or her body hates to lose a deal to the “other guy.” But while a loss to a peer MSP can drive anyone to a cold adult beverage, nothing stings like losing to a customer “no decision.” You know the scenario. Here are three ways to solve it.

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When I want to learn about a business topic, I always try to get the scoop from people who are battling it out in the trenches. Real-world success trumps the white board gurus any day. So, for this blog post, I’m culling business insights, sales advice and cloud strategies from three MSP All-Stars. Here’s their guidance.

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Adios 2009!  Great to see you! In the rear view mirror, that is. Congrats to all those MSPs that persevered through the melt down — and even grew their business through the dismal macroeconomic climate. I’m on the record for calling 2010 a banner year for MSP revenue growth — but what about profit? EBITDA? Anybody that has ever talked to an investment banker, thought about selling their business, or buying someone else’s business knows that EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is a proxy for operating cash flow and one of the key multipliers that goes into an MSP business valuation. Is your business model shaped to achieve record EBITDA as your revenue trajectory zooms?

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Service Providers are worried about the future prospects of their current managed service offerings in the face of emerging competition. More and more customer compute dollars could flow toward cloud providers with huge scale advantages like Amazon, Google and Microsoft.  I get the concern. But the cloud genie is not going back in the bottle. Here’s how to move forward.

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A very cool part of my day-to-day calendar is dialoguing with early stage MSPs.  Why is it cool?  Because in a prior life I worked at an early stage MSP that moved out of a teething period of losing money and operational pain to achieve long-term, high revenue, highly profitable mature operations. I am often asked about critical success factors – what were the difference makers on our path to success?  While we executed many key moves (some right/some wrong), my answer to that question is always another question:  What’s in your Service Catalog?

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Like it or not, the reality for MSPs is that they’re only an SLA breach or significant outage away from losing a customer. This immense contractual pressure is a significant motivator that drives MSPs to develop sophisticated approaches to continuous service improvement.

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