MSPs, Here’s Your Reality Check

I want you to think back to before the pandemic began in March of 2020. How have your customers’ needs changed? What are you doing for them today that you weren’t doing then? What tools have you added to your stack? What security process and governance have you added?

I hope the answer is that a lot has changed.

Your customers have hybrid environments. They have increased their dependency on technology. The security landscape has changed dramatically. Your tools and process should have changed too.

Now, here’s the reality check.

How much have your costs changed? Are your tool costs higher? Are you paying higher salaries? Do you know how much it costs to deliver additional processes?

If your prices have not increased significantly over the past two years, there are only a few reasons why. You’re either falling behind, seeing lower margins, or both.

I encourage you to do a deep dive into your Micro and Macro Picanomics. Go to the TruMethods portal to watch the videos on both topics and use the calculator we provide. For our peer members, we will be doing a special project on packaging and pricing this quarter.

A few tips come to mind.

Be sure that everyone who delivers services fits into one of your delivery areas. If not, you will not be capturing their costs. This means your margins will be lower than what you calculate. For tool cost calculation, take each tool that you include for the delivery of your managed offering and do a unit conversion to the average cost per seat. Remember that we’re targeting 70 percent of the gross margin on our core managed offering.

Our industry has gone through so many changes over the past few years. If you haven’t made the necessary adjustments in your business to adapt to the reality we’re now living in, it’s time to reassess your approach.

TOPICS: MSP adviceMSP securityMSP software tools
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