Better Understanding the Top 3 Challenges Facing MSPs Today

Change, choices, credit: olaser via Getty stock photos

Having spent time with hundreds of different MSPs from around the world since starting our Business Transformation Program, we see that there are really three areas where MSPs are facing challenges today:

  • Top line growth—increasing profits and driving company growth.
  • Operations—understanding how people and processes can help you drive substantially more to the bottom line.
  • Organizational behavior—managing and developing your people and your teams as your business grows.

This list in itself probably isn't going to be news to anyone, but I think the way these topics are talked about within the N-able Business Transformation Program is a little different.

When we look at growing an MSP, to me there is a big issue around how we frame things. I've become convinced that there's conventional wisdom within the managed services industry that's just flat out wrong. And here's what I mean by that: there's a general perception within our space that MSPs are terrible at sales and marketing, and that's why they're not growing.

Challenging conventional wisdom on MSP growth

I think half of that is true. Yes, a lot of MSPs aren’t great at sales and marketing, but in reality that could be said about small businesses in general. When we look at MSP businesses that are growing above the norm, it’s often not because they're doing anything different from a sales and marketing perspective.

If we ask them, “How are you marketing your MSP?”, our experience is that the majority will come back with, “Oh, we don't have a formal marketing program.” It’s a similar story with sales. Often we find the fastest growing MSPs don’t actually have dedicated sales reps.

So, if all these companies that are growing strongly aren't actually doing a ton with marketing and sales, then the key to their success is clearly not sales and marketing! Obviously, they're doing other things differently when it comes to driving growth.

This means that a big part of the challenge for MSPs is weeding their way through all the conventional wisdom—everything they're being told—and really understanding what's driving growth. This is what we try to dive into as part of our Business Transformation Program.

Tapping into global patterns and insight

It can be tough when you're a growing MSP in relatively small geographical area; you have a very limited perspective from which to compare your business against others in a similar situation. And that's where, I believe, companies like N-able, which have tens of thousands of partners around the world, have a responsibility to help those partners understand where they fit in the bigger picture. This is why we are constantly researching what’s really driving growth, and looking to present that in a clear and data driven way.

Moving on to look at operations, the biggest challenge I see is that too many MSPs are trying to reinvent the wheel. There is so much good stuff out there already about how to drive best-in-class net profit. Folks need to be taking advantage of this, and they should look at joining peer groups, to help unlock the combined wisdom that is already out there. Of course, this isn’t necessarily the whole answer, but it will certainly give you enough to be able to accelerate your operational efficiency by years.

Finally, if we look at the organizational behavior side, that's a little tougher, and is probably a little more relevant to companies as they are scaling. We hear the same questions a lot of times from companies as they get up to 30, 40, 50 employees. They start asking questions like: “when do I hire my first CFO?”, “When do I hire my first CMO?”, and “What should I be staffing in-house versus externally?”

With all these challenges, listening to and learning from your peers is critical to helping MSPs make a difference in their own businesses. The Business Transformation Program is designed to facilitate an environment where they can do just that. All of our business transformation sessions are what we call expert-led and peer informed, which means that we put the emphasis on bringing in experts, facilitating challenging conversations, and encouraging debate. Our goal is to help direct what we think are the smartest conversations in this space to support our partners in taking their businesses to the next level.

Listen to Robert Wilburn and Chris Massey talking in more detail about Business Transformation:

Robert Wilburn is VP of Partner Growth at N-able. Read more N-able guest blogs here. Regularly contributed guest blogs are part of ChannelE2E’s sponsorship program