Better Call an MSP Part 5: Identifying the Stage of your MSP - Where Do you Fit?

various ways MSPs can help their SMB clients work through the most challenging daily business issues.

In last month’s installment of, “Better Call an MSP,” I discussed concerns on how telecommunications companies (or telecoms) are being deemed a threat to solution providers. This time, I’d like to talk about the future, rather than the present, and more specifically, “life after managed services.” I’ve had several conversations at recent industry events where this topic has surfaced. I have spoken with partners who seem to fall into one of three categories when it comes to what stage they are in with their MSP, and I’d like to explore the specific stages of a MSP business.

1.) Ready to Sell the MSP? As I delve into the first category, it’s almost as if I’m describing a stock portfolio. Think about when you invest in stocks, bonds, mutual funds, etc. for your retirement or other reasons, and you look at the types of funds that offer aggressive, moderate or conservative growth. The same can be said when it comes to managed services. If you are at a crossroads when it comes to your company, and you’ve been grinding away for many years, then it might be time for you to find your best offer and sell. However, if this is the path you choose and identify with, it doesn’t mean you have to walk away completely. I know many MSPs, who after creating and building their businesses, wanted to focus on other ambitions, but still wanted to be involved. It is an option to sell, but while you may not be involved in the daily operations, you still may want to have a say in big business decisions, for instance on a chairman level. There are many MSPs who play this role, and they have the freedom to capture their true entrepreneurial spirit while still being involved in the original company they created. After all, a true entrepreneur never really stops thinking, developing and creating, right?

Some signs to help identify you may be ready to sell are:

• You are optimizing your company and grooming it to go lean and mean for the highest valuation possible.
• You feel your heart just isn’t in it anymore, and you find yourself looking at new opportunities.
• You attend industry trade shows/events and you spend more time on the golf course rather than networking at sessions and on the show floor.

2.) Status Quo/Moderate Growth: While I admit that the expression “just coasting by” usually has a negative connotation, in this situation, it can be thought of as your MSP is simply “status quo” and that can be a good thing. If you identify with this category, you aren’t at a point where you are ready to hang up your hat and sell the company. However, you aren’t looking to expand by 300 percent in the next year and add several new clients and staff; you are happy with how the business is running with current clients and staff. You also don’t hold on to a “noisy” client (or take on a potentially difficult one) just to make money or to grow. Being operationally sound is what’s most important to you.

You may fall in this category if:

• You are generally happy with the daily activities of your business.
• Growing your business 10 to 15 percent per year (rather than 200 percent) is a solid win for you and your team.
• You don’t take on new clients (or keep difficult ones) just for the sake of extra money.
• You are happy with your current lifestyle, and while your company is doing well, you aren’t looking to be the biggest company in your market.

3.) Aggressive Growth: With this category, I would say it is the easiest to see right away, because with this one, you are constantly thinking about your business, how you can make it better, and how you can grow and make more money. MSPs that are looking for aggressive growth set high expectations for both themselves and their staff. They are usually looking to grow the company in the 200-300 percent, and are constantly focused on fine-tuning their services for current clients, while developing strategies to take on new clients. Many who are in this category often look outside of their immediate geographical area to expand, and many others are doing this more and more. They are at the forefront of expanding their business by either partnering with other local, like-minded MSPs or through acquisition.

You may identify with this category if:

• You map out a plan to aggressively grow your business within the next two years.
• You start to look for acquisition opportunities within your local market.
• You also feel like you are ready to expand beyond your local market and begin seeking out MSPs in other geographical areas that are ripe for acquisition.
• You are focused on the next wave of customer success.

Regardless of what stage your MSP is currently in, it’s important to evaluate your goals periodically. Be cognizant of where you want to head in your career or whether you are nearing retirement and think about necessary preparations, regardless of the stage.

Raymond Vrabel is Continuum's Director of Technical Account Management and participates in product and service growth initiatives. He manages Continuum's Technical Account Management team, supporting over 3,500 partners worldwide. Vrabel has more than 15 years of experience in the IT industry, specializing in managed IT services, disaster recovery and cloud solutions. Follow him on Twitter: @rayvrabel.