The Coronavirus outbreak is dominating not only the country’s news cycles, but our lives. Right now, we're seeing how external factors can impact the economy quickly in a big way. No one knows what the ultimate impact will be on the global economy (or even your local economy). I’ve been talking to our TruMethods peer groups over the past year or so about the importance of understanding the economic cycle — and now you know why: You as a MSP owner must always prepare for the next downturn.
Here’s the thing: We don't know if the Coronavirus will push the economy into a recession or if the markets will rebound and delay the next downturn. What we do know is the next downturn is coming, and the current news makes this very real — so how do you prepare your MSP business?
First, you must have command over your revenue and cost drivers. Are you above or below your turning point? If you're below, how much monthly recurring revenue (MRR) do you need to stay above break even? What percentage of that is your current MRR run rate? This helps you evaluate your potential risk.
Remember: Project work doesn't necessarily vanish. It just gets postponed at the beginning of a downturn. What happens is everyone freezes and takes a “wait-and-see” attitude on new projects.
Review your customer base and assess who would be severely impacted by a Coronavirus incident in your area. Ensure your employees are prepared to work remotely for a period of time. Reach out to every client and have the same preparedness conversation. This is an opportunity to not only strengthen strategic relationships, but generate additional revenue. This is a great time to be sure that you're on the same page with every client in terms of their strategic roadmap.
Look at the next three to four quarters and ask about critical projects, so if there's a change, customers know what they need to budget for the worst-case scenario. Hopefully, you’ve already built a strategic roadmap for every one of your clients inside of myITprocess if you are a TruMethods member, so this task should be very easy. If you haven’t, I would contact your TruMethods Member Success Advisor and ask for help or schedule a demo of our software to see what you’re missing.
We don't have a crystal ball. But you do have time to think through the impact of external factors before they start.