Article | March 27, 2019

Transitioning From Break-Fix To Managed Services: Pricing & Operations

Source: IT Glue
Is Your CRO Charging You The Right Price?

The biggest shift in the transition from the break-fix business model to managed service provider (MSP), comes down to your pricing and operations. In other words, how much are you going to charge for your services, and how are you actually going to operate in order to provide these services. Consider the following.

Choosing the right pricing model

Break-fix businesses tend to rely on an activity-based revenue model. Your clients come to you with a problem, and they’re charged based on that circumstance. As an MSP, you’re likely going to shift towards focusing on your monthly recurring revenue (MRR), and thus be charging on a monthly basis.

The key to remember here is that you’re no longer simply stepping in when it’s time to solve your clients’ problems (thought your job will still involve some element of that). Rather, you’re preventing problems from happening in the first place. The service you’re providing is uptime, and for that, you’re able to create a more stable flow of revenue.