MSP Profitability Calculator: Results
How Does Your MSP Measure Up?
This is your average price, based on your recurring revenue and the number of seats supported. Seat price is a leading driver of MSP profitability. Low AISP indicates a gap in the value perceived by clients.
This is your average monthly revenue from managed service agreements. Low average MRR lowers profitability, and usually indicates a gap in the perceived value of your MSP offering. A low average MRR often equates to lower MRR sales results.
Leverage is the relationship between an hour worked and a dollar earned, so it’s a measure of overall service effectiveness. It’s the amount of annual service revenue you generate, divided by the total number of employees in your company. Factors that impact leverage include service delivery efficiency, average seat price and total reactive time.
The reactive support level is the relationship between the number of reactive tickets and the number of seats under management. It is a leading indicator of MSP maturity. A high reactive support level number indicates that you’re too reactive, your profitability is low and your seat price is too low.
How much more money could you be making each year? Your unrealized profitability is the amount of money left on the table when you’re not operating as a World Class MSP. This is the annual profit you would realize if your leverage were at World Class standards. If any number is in this box, your business is missing out on potential earnings.