7 Business Changes MSPs Must Make Immediately: Pivot Now
Amid the coronavirus pandemic, MSPs should make the following seven business strategy, sales, finance and process changes — effective immediately, ChannelE2E recommends.
Updated March 19, 10:45 a.m — 2020: We are seeing cases spike on in New York State. Much of the data spike is due to the improved availably of testing — which is welcome news. But for those who have the virus, a small percentage of people of all ages (college and above) are winding up in intensive care. So:
- Updated March 19: I would strongly recommend MSPs avoid on-site project work at all costs — even if it means sacrificing March 2020 IT project revenues. Instead of on-site work, make sure you have a rock-solid work-from-home strategy for your business that extends into at least September 2020 as part of your business plan.
- Updated March 20: In New York, all non-essential businesses and their employees must now work from home, as part of Governor Andrew Cuomo’s latest plan. The Takeaway: MSPs in every state that go fully Work From Home will be best positioned to assist customers over the long haul if/when coronavirus hotspots break out in your business region, ChannelE2E believes.
- Updated March 19: Don’t be afraid. Do take action. As New York Governor Andrew Cuomo indicated on March 19: Fear can be more dangerous than the virus. We all know how to deal with it — stay at home, and “act on facts rather than fear.”
Original March 18, 2020, blog below
The seven recommendations…
1. Social Distancing:
- Work from home for everyone — no matter where you are in the world. Assume your offices and all of your customers work in a city or region that will face a shelter in place government order or consideration at some point — even if such a lockdown never occurs.
- Follow this advice from Perspicuity, an Ingram Micro TrustX Alliance member in the United Kingdom. Perspicuity CEO Ben Gower is UK president for the TrustX community. Gower states (and ChannelE2E emphasizes in bold):
“It’s business unusual, let’s do it…
We love meeting you, and we still will, but for now we are going to work with you to deliver our services remotely: we think it’s the responsible thing to do, so video and Teams chat it is for now. Maybe it’s overkill, but the reality is we can do this. We’re changing the way we work to be a responsible world citizen whilst keeping the wheels of business turning, there is no excuse to stop, it’s a temporary measure and we’re up for the challenge. We look forward to continuing our work with you, we look forward to what we’re going to learn on the journey, and we wish you all good health, good luck and good business.
From all of us at Perspicuity”
2. Question Every Assumption About Your Business: That advice is based on guidance from Sequoia Capital to its portfolio companies. What does that mean?
- On a daily basis: CEO and CFOs and trusted members of the executive team should reexamine cash runway, funding, sales forecasts, marketing, headcount and capital spending.
- On a weekly basis: CEOs and CFOs should meet virtually with executive teams to double check revised information. Re-forecast your business Q2, Q3 and Q4 2020 performance on a weekly basis, and take special note of forecast change trends.
3. Stop Selling. Start Listening: Don’t sell. Don’t visit. That does not mean halt communications. Instead, ask customers about their urgent needs via phone, email and other digital pipelines — then see if it’s reasonable for your business to fulfill those needs. Don’t commit to fulfilling the requests before you’ve taken step 4 below.
4. Quietly Perform End-Customer Business Assessments: Determine…
- Which of your customers are best positioned to still be in business by September 2020 — and which ones could potentially be out of business by September 2020?
- Find tactful ways to ask your customers about their business financial standing, recent changes to cash flow because of the pandemic, etc.
- For peak load times, prioritize urgent IT projects & customer support based on your new matrix of customers that are well-positioned to maintain business operations through September 2020 and beyond.
5. IT Projects & Payments: Many MSPs are taking on urgent “work at home” projects for customers. The projects often involve hardware purchases (laptops, monitors, keyboards, printers, etc.).
- Emergency hardware purchases should be paid in full by the customer the moment the contract is signed and before green-lighting any hardware purchases and deployments.
- Products should be shipped directly to their deployment destinations, with simple self-service setup instructions that don’t require an on-site tech visit.
- Make exceptions to payment terms only when you’re absolutely sure there’s no risk or at least minimal financial risk to your business.
6. Financial Relationships: Double check existing lines of credit. Remember: The best time to established a line of credit or take a business loan is before you need it. Financial pipelines with extremely low interest rates are open right now. You don’t know if or when those lines of credit will close.
7. Remember: Communicate confidence in every one of your interactions — with family, with friends, with employees and with customers. I’m a glass-half-full type of guy. Long term, MSPs will be fine. But near term, it’s foolish to assume monthly recurring revenues (MRR) are somehow protected from a potential coronavirus recession (which appears likely). Or worse, a potential economic depression.
Got questions about what I’m hearing? Email me: Joe@AfterNines.com.