Guest Column | August 24, 2012

The #1 Obstacle To Your Managed Services Growth

Dave Sobel

By Dave Sobel, director of partner community, Level Platforms

One of the biggest challenges VARS face as they make the transition into managed services, or MSPs must contend with as they build their business, is dealing with customers who don’t want to be on a managed services plan. Do you walk away from the opportunity? Do you make an exception for a potential customer? Can you change the customer’s mind?

This is always a tough question, and the answer usually depends on the business maturity of the MSP. For an MSP who is not yet profitable, or still working to cover basic business costs, I can never recommend turning away work where you can make a profit. Note that I didn’t say take any opportunity that crosses your desk. If you can’t cover costs, don’t do it!

However, as your MSP business matures and you’re making a profit, it’s often necessary to start focusing on the work that fits your business model and goals. The core idea behind managed services is that process is followed and systems are used to gain efficiencies and deliver a consistent service to the customer. Contracts and engagements that don’t fit this model will cause inefficiencies and drive down profit. As an MSP’s business  matures, it becomes increasingly important to only make exceptions when there is a concrete commercial benefit. Maturing MSPs will find fewer and fewer compelling business reasons to make this exception.