Do you have a business plan for 2022? If so, do you have one that’s making you do something differently? If not, success will be out of reach.
An effective business plan is actionable. It provides you with steps to achieving your goals. It also provides a way for you to achieve not only your personal financial goals but also your company’s financial goals.
There are several things to consider when building your business plan.
Just get started
A lot of MSPs give me excuses when I bring up business plans. I often hear, “I’m already working as hard as I can,” or “I’m buried with reactive work.” And then there’s my favorite, “I need to finish a few things first.” I’ve been in this business for more than 25 years, and as an MSP, I’ve never walked into my office and said, “Oh, there are no issues today? I think I’ll start working on my business plan.” There will never be a right time to start your business plan. You just have to start. Once you have a plan, you can take a step every quarter, even if it’s small. If you don’t put a plan in place, every day is like the one before. A business plan gets you to where you want to be.
But first things first
Before creating your business plan, you must review your financial results for 2022. Look at revenue by category, gross margin by category, new MRR sales, churn, etc. You also need to consider some MSP metrics, including your average seat price, average MRR, and average customer size. You need to understand where your business is today to determine where it needs to be tomorrow.
What’s your vision?
One of the most critical aspects of your business plan is your vision. What’s your 10-year vision for your life and company? Do some soul searching. Are you where you thought you’d be? Is your company as profitable as you thought it would be? Consider how your expectations have changed. Has the reality of life and business changed and lowered your expectations? Think about how you want to spend your time in a decade. Then get down to the numbers by putting a price tag on your life vision, as time and money are two sides of the same coin.
Will you be successful?
Two key factors determine the viability of your MSP business plan: profitability and trajectory (your ability to grow). You will eventually achieve your goals if you understand and prioritize these two factors. Simply put, your profitability determines your future success. The more profitable you are, the fewer people, revenue, and sales you need to hit your goals. The value of your service offering is what drives profitability. The more valuable you are, the more clients are willing to pay for your services. MSPs have a value problem, not a price problem.
Did you forget about marketing?
Many MSPs forget to incorporate marketing strategies and processes into their business plans. Marketing can help you with getting the leads you need to generate more MRR at the right price. A well-defined marketing plan includes a way to promote your value proposition and establishes goals to connect with prospective customers. Don’t forget: Both online and offline strategies are needed to increase brand awareness.
If you haven’t already, watch the “On-Demand Recording: The Do’s and Don’ts of Creating a Successful MSP Business Plan” to get a better sense of what you should and shouldn’t include in your business plan. We get into the weeds in this one.
If you’re focusing on what I would call the result rather than the root cause, you will be in a world of problems. Instead of growing, you will be playing an endless game of Whac-A-Mole. But eventually, your arms are going to get tired!
With the right plan in place, you’re going to be doing things you need to move the needle.