Four Keys to MSP Success (Regardless of the Economy)

By Maurice Saluan 1

Many managed service providers talk about good business strategies for the bad economy. I prefer to look at what you can do to increase your chance of success in good times as well as bad. In this blog entry, I offer four tips for ongoing business success — regardless of the economic climate. And in my next blog entry, I’ll take a closer look at a specific vertical market opportunity that’s ideal for managed service providers.

Four Steps to Increase Your Your Business Performance:

1. Remember CASH is king. Capital expenditures are being held to bare minimums. By you and your clients. Your clients’ preference is for operating expenditures and utility computing. You should do your best to provide your services by billing monthly. Make sure you have lease programs available for your clients’ hardware purchases. Take steps necessary to improve your own cash flow. Keep Days Receivables Outstanding (DRO) in check. If you don’t know your average DRO, you may be falling behind without even knowing it. If you know your clients are falling behind, offer payment plans. Some cash is better than none.

2. Maximize Profit Margins: Make sure you maximize profit margins on all products and services you offer. Just turning dollars will kill you. Also, offering free service with hardware purchases will put your business in a negative cash position over time.

3. Focus On Growth Markets: Based on all accounts, SMB’s will drive business growth through the economic downturn. Offer products and services which solve business problems that SMB’s have. What are the technology-related solutions that SMB’s are looking for? According to various VAR publications, those are:

All are expected to have double digit growth for the next 5 years.

4. Acquire New Vertical Market Customers: New client acquisition is more critical than ever. You will lose some clients so make sure that you have more coming in than going out. Taking a vertical approach — and focusing on the right vertical — will ensure more success if you target industries that are somewhat immune to the recession.

Care to debate me on the points above? Let me know. And for my next blog entry, I’ll return with some practical guidance for vertical market success.

Note: Maurice Saluan is VP-Channel Management for Zenith Infotech as well as seasoned sales veteran in the managed service arena. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor.net’s 2009 Platinum sponsorship.