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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.

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12 Comments

Comments

    ARLIN SORENSEN:

    Great guidance Joe. All of us have to adapt to a new normal, and the shift has to be about people, not the things we’ve been focused on during our years of prosperity.

    There will be a new normal, and the sooner we lead our teams to find it the better for all.

    Keep up the great work!

    Joe Panettieri:

    Hey Arlin: Thanks for the thoughtful reinforcement. #StayOnTheFarm and stay well. Keep me posted on what the community is saying.

    All the best,
    -jp

    Jason Hahn:

    Great read Joe, appreciate the share and info in such trying times.

    Joe Panettieri:

    Jason: Thanks for the note. Wishing you all the best as you navigate the pandemic.
    -jp

    Jacob:

    Nobody noticed there is no point 3?

    Joe Panettieri:

    Jacob: Thank you. Two follow-ups…

    A. Point 3 skipped because it was: PAY ATTENTION to every detail, no matter how small. If you’re missing facts to help drive business decisions, figure out if you can find the facts quickly. If not, make the best educated decision you can with the limited facts you have.

    B. Actually, point three wasn’t skipped. I failed to put a numeral next to one of the tips. But thanks for your correction. It’s a reminder that I have to pay attention to every detail as well.

    Be safe.
    -jp

    Gary Pica:

    Great work Joe, we all need to pull together and share as much as we can. Everyone is busy today and must think about when they won’t be. Plan now! You need to be better, more effective, more secure, more proactive, and more valuable to clients.

    Joe Panettieri:

    Gary: Wishing you, your family and the TruMethods community all the best.
    -jp

    Rex Frank:

    Joe,

    This is an excellent read that we have shared with all of our Coaches. If it’s okay with you, I’d like to include a link to it in our newsletter.

    Per Arlin’s comment, I’m still cautious about using the term “New Normal”. I believe there will be a New Normal, but what we are dealing with right now is far from what Normal will be. There is too much fear right now to consider it anywhere near Normal.

    We’re talking to our ITSP clients every day about the tactical decisions they are making on the fly. I’d like to commend the entire community on their efforts. I’ve witnessed amazing things happening in the last week. Most of them should have taken months to develop and deliver. I’ve seen tremendous amounts of teamwork with staff coming together with compassion and commitment like I’ve never seen before.

    I’m in the cup is half full camp as well. I am not going to underestimate our ability to pull it together and come through on the other side.

    Joe Panettieri:

    Hi Rex: Thanks for your note. Feel free to link to the content.

    Also, I’d like to reframe the New Normal discussion. I don’t think Arlin and many other leaders use it to describe fear. Rather, I think The New Normal involves the conscious steps we take to control our destiny — everyday.
    -jp

    Charlie:

    Thanks for the post Joe – important we are all playing heads-up, focused on the things within our control. Appreciate your voice – keep well!

    Joe Panettieri:

    Hey Charlie,

    Wishing you and the DataDog team all the best. Looking forward to visiting your NYC offices once we put the pandemic behind us. Stay well.
    -jp

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