The last year has been a doozy for everyone, including MSPs. The definition of normal was completely reset for society, business, and beyond. It was a tough year full of adjustment, and it’s safe to say most of us were happy to say goodbye to 2020 and to welcome 2021.
As MSPs embrace the new year, many are now asking an important question: How do I scale my business in 2021?
We’re looking at a new business landscape in 2021, with varying degrees of virtual work, shifting technology needs, increased concerns around cybersecurity, and more. MSPs will need to proactively respond to these challenges and changes to keep business running smoothly and to take advantage of new opportunities.
We see five key ways to do this. Read more on how each of these areas can help MSPs scale in 2021.
1. Do More With Less
MSPs large and small all face the same challenge: How can I do more with less?
Efficiency is the name of the game. To improve efficiency, a solid sense of your cashflow is the first step. Knowing where every dollar goes will quickly reveal where there are inefficiencies, what’s unnecessary, and where more investment is needed.
Technology can play a big role in doing more with less—for example, by automating routine tasks with good RMM software, MSPs can free up technicians’ time for other (and possibly more important and/or lucrative) tasks.
If you’re looking to improve your MSP business’ efficiency in 2021, step back and assess your setup, asking questions like:
What are the priorities for the year?
How many people do I have?
How many more do I want to hire?
What kinds of software tools and platforms do I have?
What software and platforms are on my wishlist?
Where are the bottlenecks or pain-points?
Can I solve those challenges with what I have, or do I need a new approach?
There’s a difference between mission critical investments and resourceful, strategic shifts in priorities. You may need to make some investments to scale (like switching to a new RMM platform) while other problems can be fixed by re-allocating responsibilities (such as having employees split a task into areas that align with their expertise). That said, everyone is trying to squeeze productivity out of every resource, and it’s important to be mindful and not sacrifice culture (more on that below) for the sake of productivity.
2. Cultivate the Right Customers
A huge part of scaling is working with the right customers. No two MSPs are exactly the same, and the ideal customer will vary. The ideal customer will often depend on your goals for growth, in-house vs. external skill sets, and the offerings you currently have vs. those you plan to add.
Some MSPs may want to specialize in a niche, such as doctors’ and dentists’ offices, lawyers, repair/mechanic shops, or hospitality. Other MSPs may want to diversify, bringing on new verticals—expanding their transferable skills, for example, from servicing doctor and dentist offices to law practices, two areas that require high security for sensitive information. Or perhaps you define vertical opportunities not by industry, but by service speciality—read our blog post on how TSPs can capitalize on vertical opportunities for more thoughts on building out a client base strategically.
The market conditions in 2021 will impact the types of clients you target. For example, hospitality businesses such as restaurants and hotels may not need expanded MSP services, whereas doctor’s offices may be facing a huge uptick in virtual patient visits, necessitating new solutions and support.
Some key questions to consider may include:
Do I already service this type of business?
If not, what skills/considerations are specific to their vertical? Do I have that expertise in-house?
How well is their industry doing right now?
Are they facing new IT or security challenges I already support, or that I can support with new offerings? (See more below for thoughts on expanded services.)
How far along their IT journey are they?
How much business do I already service, and how many more hours can my team accommodate?
Is it better for me to have a few, larger clients or multiple, smaller clients?
By deciding what kinds of clients you want and then carefully cultivating a customer base that meets those criteria, you will set your MSP business up for strategic growth in 2021.
3. Explore New Offerings
To scale in 2021, MSPs will need to think about what they can offer to both existing and new customers. Diversification in offerings can be a great way to scale without even needing to bring on net-new customers.
There are likely service offerings that your MSP business is handling well—your bread and butter. Maybe it’s device management or software patching. But the last year redefined priorities for many industries, and it’s likely that both existing and new customers are facing new challenges and fears.
These challenges may be opportunities for your MSP to provide additional support.
Consider the explosion of remote work in 2020. This new workflow has changed many elements of business, such as:
Expanded security perimeter as more people work from home
Varying internet speeds/quality, depending on employees’ home setups
Devices being used for both work and personal purposes
Increase in virtual software, such as video conferencing, at businesses that may traditionally rely on in-person business dynamics
Shift from on-premise servers and local software to the cloud
Need for VPNs or other security services to protect WFH employees
Less opportunity to service or replace hardware, such as corporate laptops and cell phones
Or take, for example, cybersecurity. Once seen as a problem only for large businesses, small to midsize businesses (SMBs) are very much at risk for cyberattacks. The 2020 Verizon Data Breach Investigations Report found that for businesses with less than 1,000 employees, 74% of reported attacks were perpetrated by external actors. The most common attack method for these organizations, also according to the DBIR, was phishing.
Fortunately, our 2020 State of SMB Cybersecurity Report found that 86 percent of SMBs said cybersecurity was one of their top five priorities, and 73 percent planned to invest “more” or “much more” in cybersecurity over the next 12 months. That same report found that 91 percent of SMBs would consider working with a new IT provider for the “right” cybersecurity offerings.
Many MSPs who didn’t start out with security offerings or who don’t have a deep background in the field may feel overwhelmed trying to decide what to offer for security solutions. But that’s no reason not to dive in. For SMBs concerned about cyberattacks and other security threats, MSPs who expand their expertise and offerings to include cybersecurity support stand to grow their businesses. That goes for both existing and new customers.
Fortunately, today, expanding offerings to include security doesn’t mean that an MSP has to build new products or design new services themselves—or even hire new workers. Rather, an MSP could offer an outsourced SOC, monitor for threat detection with specialty software, provide security information and event management (SIEM) services, etc. The right mix of offerings will be different for every MSP business, but diversifying into security can help with scaling.
4. Invest in Training & Education
Investing in training and education for your staff will help you expand to new offerings and win the right customers by demonstrating expertise. Many new areas for MSPs—such as cybersecurity—require new skill sets, vocabulary, and more. Some new offerings may require your technicians to pass certifications, too. Other certifications may not be an absolute requirement but can help build customers’ confidence that your team has the expertise to support them.
Remember: Training and education isn’t just for engineers and technicians. MSP owners can often benefit from education, too. Learning about new areas, like cybersecurity, can be an invaluable way for MSP owners to lead by example and identify new business opportunities.
Spending time and resources on training, education, and certification can seem daunting, but it’s a great way to improve the skillsets of your team, grow customer relationships, and continue to provide quality customer service.
5. Create a Sustainable and Attractive Culture
Last but not least, it’s important to make your MSP a great place to work if you want to scale through hiring. Happy employees do better work, and new talent looks for not only great benefits, but also a thriving culture. 2020 was a difficult year for many people, from financial hardships, to family challenges, to health fears. And, on top of that, many companies have lost the sense of community that comes from running into each other in the kitchen and hallways.
In 2021, MSPs will need to be deliberate and thoughtful about their internal cultures. It’s a good time to get creative.
For example, the importance of our local communities and businesses has never been more apparent. Consider supporting a local non-profit or charitable organization by allowing employees to select a deserving organization and then matching employee donations. Or, since there aren’t any more team-building lunches, could you organize a weekly Zoom coffee chat and send everyone gift cards to their local cafe?
At the end of the day, an MSP is really the people who work there. So by making sure your team feels fulfilled and that your culture remains strong, you will have a healthier, happier business in 2021.
2021: A Year of Opportunity to Grow Your MSP Business
We’re so ready for 2021. Last year, many MSPs did some soul-searching and had the time and opportunity to re-prioritize their business goals and needs. Now that we’re starting with a fresh, new year, MSPs can put their plans into action. By prioritizing, cultivating the right customer base, offering new services, investing in training and education, and creating great cultures, MSPs can scale their businesses and succeed in 2021.
Author Geoffrey Willison is COO at ConnectWise. Read more ConnectWise guest blogs here.