Reasons an MSP Company May Fail— and How to Avoid Them

MSP companyAn MSP company needs to avoid mistakes that not just tech companies, but any small business, is in danger of making. Below are four well-known mistakes your MSP can make, as well as means of avoiding them:

No Value Proposition

Even a smaller MSP company can compete with big-ticket IT organizations. But you’ve got to compete with your strengths. A large operation will have enough services that they’ll likely end up charging more for some than your MSP may have to. As a startup, what you might do is specialize in an area where you can provide cheaper solutions locally than larger competitors.

From there, build up your client base, and expand as possible. To do this you need a value proposition including statistics relevant to the demographic you’re aiming toward. You need to show you can save them over competitors, and how other customers have benefited from what you provide.

Failure to Generate Greater Revenue than Operating Cost

Keep close tabs on generated revenue. Even if it’s only a little higher than costs, that’s okay. It just must remain above necessary expenses to keep the doors open. The moment that stops, you’re in danger of failure.

That said, sometimes profit of this kind may take a few years, owing to loans and the like. Plot things out and build a sustainable business model, then assure metrics are within the “safe” ranges of that model perpetually. When things start slipping, it’s time to start trimming whatever fat you can and optimizing toward your strengths.

Being Unable to Transition as the Market Does

Cloud computing has given way to the Internet of Things. IoT, much like cloud computing, has begun to define edge computing, where IoT devices are used to process data much like servers networked together in the cloud. The internet is becoming decentralized, and there are further transitions in terms of augmented reality (AR) on the way. Your business needs to have an operational model which is capable of producing profit enough that you are able to transition without lost revenue.

Poor Leadership

Bad leadership will sink your MSP like a man-sized hole in the bottom of a canoe. It doesn’t matter how strategic or profitable your operations are if the leader of your tech vessel has you aimed at a waterfall crashing on jagged stones. The ship will break. You’ve got to have checks and balances to determine leadership accountability and to balance power.

Establishing Your Business

An MSP company with good leadership, that transitions with the market, that generates profit over cost, and has a value proposition that’s properly balanced, is situated to avoid some of the more common operational errors which cause SMBs to fail. Consider where you are presently and whether you need to repair existing operational protocols or not.

Vincent Tedesco

Vincent Tedesco

Vincent Tedesco is the President and the CEO of Total Technology Solutions, a full-service IT solutions provider distinguished by broad expertise in managed IT services in Long Island and a singular focus on the needs of their clients. Vincent has over 30 years of experience as an IT leader, from his early years beginning at Computerland and to founding and growing Total. He founded Total in 1988 and spearheaded its evolution in the ever-changing technology marketplace by providing consulting and IT support in Long Island. Total Technology’s mission is to secure and to have IT support in Suffolk with reliable solutions and exceptional service so that Total clients can focus on their core business.