2016 is halfway over. When you look back over the past six months, are you able to pinpoint positive changes made within your MSP? Or, are you in the same place you were on New Year’s Day?
Mid-year is a great time to assess your business and reevaluate your MSP business planning methods. This checkup is your opportunity to determine if you’re on course to meet your yearly goals and get your company back on track.
Are you already following a set business plan? If not, that’s the place to start. Having an MSP business plan may not guarantee that you’ll grow faster or make more money, but no World Class MSP got to the top without one.
Follow these pointers to learn how to conduct your mid-year business plan checkup.
Review Last Year
How was your business operating this time last year? To identify areas for improvement, you must first determine your starting point. There are a few aspects of the past year’s operations and performance that you’ll need to review, including:
- Gross margins
- New monthly recurring revenue sales
- Average AISP (all-in seat price)
- Average monthly recurring revenue
Outline these metrics from the last year, as they are important targets for you to use in setting and evaluating goals for your MSP business plan.
Assess Your Goals
You have both short- and long-term goals for your business. These are the goals you should be reviewing and evaluating on a regular basis.
- 10-Year Vision: Where would you like your business to be in a decade? How do you align your actions today with your overarching goals for the future?
- 3-Year Target: Your company could look a lot different in three years. You could be twice the size or half the size, depending on your success. You’ll be prepared for growth when you have targets for your next three years.
- Annual Plan: Where is your company going this year? Set monthly recurring revenue goals for the year and work with your team to achieve them.
- Monthly Action: What actions are you taking month to month to improve your business? You should be building upon your success each month to reach your annual goals.
Are you on track to meet the goals you set at the beginning of the year? Or, if you’re just creating a business plan now, are you in a position to meet those objectives? If not, you need to right the ship. There are two adjustments you could make: The first is to your goals, and the second is to your performance.
It’s possible that, due to circumstances beyond your control, you just won’t be able to make the goals you set at the beginning of the year. That’s normal in the business world. Your company may have experienced unexpected turnover. You might have encountered unplanned expenses. All businesses face setbacks, but the successful ones overcome them by being flexible enough to adapt. Look at your goals and determine if they’re really achievable. If not, set more realistic ones for the second half of 2016 – ones that are still going to challenge your team.
On the other hand, an inability to reach your goals could be due to the fact that you’re just not operating efficiently enough. Are you wasting time on IT tickets? Are you not generating enough monthly recurring revenue? When facing issues like these, focus your efforts on improving performance. If your sales are lagging, invest more resources in your sales team. Determine where improvements could be made and push your team to make them.
Having an effective business plan is the foundation for running a successful MSP. Take this opportunity to evaluate your mid-year progress and adjust your approach. With a strong, flexible business plan, you’ll be ready to meet your future growth goals.
Ready to put your plan into action? Download our business planning worksheet below.