New Year’s Resolution: Trim the Fat From Your MSP’s Budget
Is your 2021 budget feeling tighter than usual? Then it’s time to get creative in order to accomplish everything you want to this year. It’s not too late to make a New Year’s resolution to create a leaner, more powerful spending plan.
Liongard Chief Financial Officer Josh Tabin says it all boils down to finding focus and making sure your dollars go where they’ll make the most impact. By following these tenets in 2020, Tabin helped the Liongard team thrive amid the pandemic and guide the company’s finances as it became the Fastest Growing Company in Houston.
So, whether you’re looking to increase margins, sell your company, acquire other managed services providers (MSPs) or simply stay afloat in the aftermath of COVID-19, focusing on efficiency will help get you there.
Find your budget winners—and budget busters.
Before you start allocating funds, Tabin recommends starting with a thorough analysis of the effectiveness of your operations over the past year (or longer). Staff ratios and ticket resolution times are a good place to start, and the more metrics you have available, the more complete picture you’ll get. You can also ask:
- “What process improvements can I make to gain better efficiency?” Can you automate any part of the documentation, onboarding and/or system monitoring processes? Doing so will allow your staff to “do more with less”—i.e., help your MSP grow, without a major expenditure. Similarly, if you can implement a software that only costs a fraction of what it will return to you, it’s a no-brainer to allocate funds there.
- “How do I currently spend money, and what are the returns on that spending?” This includes evaluating how effective each member of your team is and determining if any shift in roles or responsibilities would yield greater returns (and higher employee satisfaction).
- “How much money do I make per customer?” Assessing which customers provide the largest margins and what type of customer is less profitable will help you identify your ideal customer and spot gaps in efficiency. It may also lead you to reconsider how you price your products and services.
Reassess for COVID-19-related changes
Most MSPs started 2020 off with office-centric operations, but as we all know, that quickly changed when the pandemic began. If you have a plan to continue a hybrid or totally remote model, determine whether that’s more or less expensive than a brick-and-mortar office.
As a growth-minded MSP, you’ll also want to reassess how you typically acquire customers—and how COVID-19 changes have affected both your approach and your budget. Most people have limited their in-person sales calls and meetings, so ask yourself if you have an effective “virtual selling” model in place? How much does it cost? Having the capacity and expertise to grow without setting foot in a client’s office or an industry event, Tabin notes, will not only help you scale back on travel expenses, it will also allow you to branch out far beyond your geographical location, if you haven’t already done so.
On the flip side, make sure to also consider how your MSP’s distributed model changes how you support your customers, and what affect it has on your budget.
Position your MSP for a merger, acquisition or growth
While larger MSPs or private equity groups interested in acquiring other MSPs want to know your MSP’s margins and profit levels, they’ll also be focused on your customer retention and growth rates. “Low churn and fast growth demonstrate efficiency—something necessary for a smooth integration,” Tabin says.
Efficiency also puts your MSP in a better position to be the one acquiring other MSPs. If you’re already using a software that automates many of your processes, it’s simple to bring another MSP’s clients into the fold. “Poor integration is where M&As can fall apart,” notes Tabin, so consistent technology and effective onboarding of customers are worth allocating funds to.
Even if you’re not looking to sell anytime soon, efficiency naturally makes your MSP stronger, and more valuable when you may have your eyes on merging or acquiring.
Leverage automation to trim your budget
Automation opens the doors to efficiency, productivity and growth ability. If you focus on eliminating manual tasks and time-consuming trips down rabbit holes looking for answers, you’ll easily free up money in your budget in a number of areas—from billing and account management to sales, staffing and support.
To improve the health of your budget and get lean in 2021, Tabin recommends focusing on getting the best return on every single dollar your MSP spends. Advanced automation from Liongard lets you make the most of your budget through:
- Automating Documentation. With Inspectors that discover customer data swiftly, onboarding gets trimmed down from weeks to hours. Plus, unified visibility and data free from human error mean no more stale data to cross check or manually update time and time again.
- Actionable Alerts. Take monitoring from a reactive to a proactive activity and allow your team to provide better service to customers. Simply choose the metrics you want to be notified about, set your parameters, apply them across your customer base, and you’ll automatically receive tickets when your attention is needed.
- Metrics and Reporting. Access thorough and efficient analysis of the information that matters most to you, without the hassle. Instead of manually combing through each customer, or each system, to piece together a report, just select the data in Liongard you want to see and generate a report in seconds. Understanding your customers’ needs and opportunities helps you become not just their managed services provider, but their IT consultant—a valuable position for the growth-minded MSP.
“In essence, Liongard gives MSPs the ability to generate at least 10X return on their investment,” Tabin says. Whether coming through greater efficiency, recouped productivity and/or growth opportunities illuminated by the platform’s unified visibility, returns like that just made it a whole lot easier to slim down your budget—without reducing headcount, sacrificing margins or adding stress to your team.
Ready to make a resolution you can follow through on? Schedule a Liongard demo to learn more about how our advanced automation can help you get the most out of your 2021 budget.