Career / Career Progression

How Any IT Pro Can Build an MSP Empire

by Team Nuggets
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Published on August 11, 2017

It can take years to grow from a junior-level IT pro to someone who has the answers for almost anything. In some IT roles, there is only so much you can do to advance your career. Sure, you learn new technology each year, but you're still stuck responding to trouble tickets and issues in a dead-end job. Maybe the only way to advance is to either go into management or start your own managed services provider (MSP) empire.

Management might be a good track for some people to pursue, but many IT people (and programmers as well) complain that going into management creates a barrier between you and the excitement of designing and creating networks and software. The interesting, fun hands-on work you did before, likely will be replaced by spreadsheets and meetings once you move into a manager role. You can have the best of both worlds by building your own business, specifically in the MSP arena.

Establish Your Market

Different sized businesses require different amounts of support. A small home-based business might only need a few hours of your time each month, but enterprise-level clients will require several hours a week as well as increased resources. Do you have the capacity to support the enterprise or do you need to start with small businesses?

This step requires some market research on your part. Research local businesses, both small and large, to assess potential customers. You also need to do a pricing analysis to figure out what your market can afford. Too cheap and you could come off as an amateur. Too expensive and you will have a hard time competing. So, it's crucial to determine your true market value.

Identify What You Best Offer

You must be realistic about your skills and experience. If you've never worked in a data center, how can you offer data center support? As an MSP, though, you can outsource the support to another contractor. Starting an MSP takes experience, as well as good contacts, should you need to hire additional support.

What you support will also determine your pricing. Don't undervalue your skill set, but set reasonable rates for your own services and then determine costs associated with outsourcing additional help. It's tempting to do it all yourself, but it's better to pay the price for help rather than walk away with unhappy customers.

Hire Sales People

IT can be an isolating career but it can be great for people who don't like small talk or long conversations. Introverts, rejoice! If you find that salesmanship is not your thing, you'll need to find a great salesperson to sell your services.

This means that you also need to consider their commission and what you'll pay them per contract. Of course, you'll have a website, but that won't negate the need for one-on-one conversations with your potential customers.

Determine Your Payment Schedule

There are three main ways to get paid: Monthly contract pricing, hourly pricing, and hybrid pricing. With monthly contracts, you get paid a set amount to support a system. This is beneficial when you first start out because it's guaranteed income. The problem occurs when you start to exceed hours set aside for the customer.

Hourly is beneficial for the customer. They pay as they need you, but this can be unstable as an MSP since you don't know the volume of support the customer will need. You have no way to plan your schedule.

The best option for both parties is a hybrid that combines hourly with a flat-rate contract. Your customer buys blocks of time in sets of 10 or 20 hours. You get paid regardless of whether or not they use them, and they go hourly should they exceed the set amount.

It takes time to get started, so you'll need some cash reserves while you increase your customer base and establish yourself. Remember that it can take years for a business to start operating in the black. Hard work, experimentation, and dedication are all a part of having a successful MSP business.


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