MSP Sector Specialist Startup
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I'm kind of on the other end of the spectrum. I worked for a $100Mil MSP, and did not feel like I was being treated or compensated fairly so I took "The Leap". I don't outsource anything, I took out a 5K loan to give me a month to get busy. Ultimately you need to figure out "how big how fast" you want to get and put the pieces in place to succeed. I've loved starting small. I grew 100% my first year, and will grow by 40-50% this year if trends stick. I am still a one man show, kind of preferring to do work in the 100ish employee medical clinics and healthcare environment. There are so many books, webinars, blogs, websites, seminars, DIY, etc etc out there it's easy to get overwhelmed. the A #1 most important thing, is to have the Entrepreneurial Spirit. If you do not, it will be a tough road ahead. It takes a special kind of crazy to leave a comfy 8-5 and plunge into many many months of working til you can't stay awake. But for me, I wouldn't have it any other way. I love the freedom it now allows me to work from home, spend time with my family, and the financial rewards aren't too bad either.
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@scottalanmiller Yes I intend to outsource as much as I can through a white label IT company here in the UK. Initially it wont be the most profitable as they take a large chunk of the rates but it means I can start getting my client base up while still employed until I have enough cash flow to sustain a wage.
@Hubtech I was thinking of doing similar ie taking a loan to get things moving. I've been looking at this as an option for a few months but the time restraints with a young family on top of work commitments mean there's not enough hours in the day to make meaningful progress. Before 'taking the leap' I presume you already had some clients lined up waiting for you to start or did you use that month to find them?If you guys don't mind divulging.. There are so many business models for pricing I think I am just going with the norm ie X per PC, X per server, then on-site day rates or higher monthlies for no-cost on-site visits. Is this really the best way to go or is there a better way of doing things? I've found I could have a company of 30 users who call once a week with a printing issue, or a company with 15 users who constantly need assistance. The cash-to-work ratio just doesn't seem to add up sometimes.
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Keep in mind that NTG offers outsourcing in the UK as well. Just in case you were interested. NTG offers a larger spectrum of services than pretty much any SMB IT Outsourcer and includes availability of US resources as well which is handy for off-hours support.
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Be wary of taking out loans to get going. It's a solid plan but takes on risks that make success even harder. It can help you to be successful, but it can also hasten a demise. Basically it just ups the ante.
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I did not have any clients lined up. After I left my previous employer I had to fight a Non-Compete that would have essentially required me to move out of the Southeast US. Post legalities, many of my previous clients came a running to me because my replacement wasn't up to snuff for them.
As far as pricing structure.....it's tough to have a super rigid structure when you start up because well....you just want revenue initially. There is usually a provisional month of hourly billing to learn a new client, get all of their pain points out of the way, and get in the groove of their business, then I offer a managed package. managed package (depending on the client) could be x/workstation and x/server if it's a pretty "simple" environment. If there are a bunch of specialized applications that are "needy", you up the price accordingly. Managed Contracts are important, the cover what is in and out of scope. for my managed clients, if there is out of scope work, it's billed at a discounted hourly rate.
Loans aren't a bad thing, if anything it's a motivation. But it seems like you're willing to give away a lot of your revenue up front to outsource, that's not my cup o tea
Perhaps a line of credit is more your style, that way you're not paying for anything you're not using. Without having some sort of collateral up front, a LOC would be a tough sell to a bank.On an aside, what is your current position?
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Essentially I am a glorified server/network administrator as I look after everything (internally). My job title is Systems Administrator but I wouldn't consider myself in that bracket. Previous to this, I became the backbone for a one-man-band IT company and Cloud Service provider who decided after hiring me he didn't need to do anything. So I ran his show for 2 years making him a shed load of cash while I did the graft. A lot of pain, but a lot of experience, so alls well that ends well.
I am only keen to farm out work while I am still in employment, to curb the necessity for borrowing. If I can keep employment while bringing in clients that are supported elsewhere it gives a small user base to get things right before jumping ship.@scottalanmiller You've certainly peaked my interest with the outsourcing option. I'd definitely be interested in discussing that further. Do you have UK based technical specialists available should I need it for technologies out of my personal portfolio?
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Yes we do have a few people based in the UK. I would be happy to discuss details with you anytime. We also have customers over that way that we need extra hands for from time to time.
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@Hubtech I like the concept of your provisional month of hourly billing to get to know a client. This sounds a great idea to prevent under quoting for time-hungry customers!
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The first 60-90 days is really getting to know the customer never flat rate yourself too quickly with anyone. It can really bite you in the butt either because you under quoted on your end or over quoted on theirs. A client who doesn't "see" your value and are paying too much will get cranky and leave. However there is no making some customers happy either.
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@Robin5170 said:
Essentially I am a glorified server/network administrator as I look after everything (internally). My job title is Systems Administrator but I wouldn't consider myself in that bracket. Previous to this, I became the backbone for a one-man-band IT company and Cloud Service provider who decided after hiring me he didn't need to do anything. So I ran his show for 2 years making him a shed load of cash while I did the graft. A lot of pain, but a lot of experience, so alls well that ends well.
I am only keen to farm out work while I am still in employment, to curb the necessity for borrowing. If I can keep employment while bringing in clients that are supported elsewhere it gives a small user base to get things right before jumping ship.@scottalanmiller You've certainly peaked my interest with the outsourcing option. I'd definitely be interested in discussing that further. Do you have UK based technical specialists available should I need it for technologies out of my personal portfolio?
Yup. Some people in the UK and more in the US.
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Do you guys find you get much work through your site or is that more of a formality than anything else?
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Thanks @Minion-Queen Really good advice, I'll definitely take that approach.
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@Robin5170 said:
Do you guys find you get much work through your site or is that more of a formality than anything else?
Formality. You need one so that people know you are real. But no one hires you through the web site.
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Actually most people go there and are surprised at all we do as they were heading there looking for one thing. So it is helpful just not our main draw of customers.
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@Minion-Queen said:
Actually most people go there and are surprised at all we do as they were heading there looking for one thing. So it is helpful just not our main draw of customers.
What would you say is your main draw of customers? Word of mouth? Or through the forums? It sounds like you get (or used to) a lot of work through building relationships on SW which I enjoy frequenting.
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@scottalanmiller Good to know thanks.
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@Robin5170 said:
The biggest thing I have noticed current general MSPs providing manufacturers is that they are not aware or do not understand the impact and therefore priority of different areas of a factory/site.
That's interesting. What kind of things do you mean?
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Do you plan to have ERP partners or work specifically with special software focused on manufacturing?
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@Carnival-Boy Using anecdotal experience, there is often an area of divide between office and factory/shop floor support. An office PC goes down and there are clearly defined SLAs, processes and procedures to cover it. This is less well defined on kit/systems on the shop floor. Due to the individual nature of manufacturer environments there is less one size fits all process diagrams to lay on top of the infrastructure, and what could be seen to be a minor issue to an IT tech could be costing the customer big money. If not identified early, then the delay is money down the drain for your customer, however if these are already defined by detailed analysis of your customer's setup and real-world impact on a number of scenarios across the business, priorities can be determined by the customer rather than by IT. This seems obvious, but simply due to the lack of experience outside from the office environment I think some MSPs struggle (I'm not by any stretch saying this is across the board).
At the end of the day, the name of the game is avoiding under the gun learning curves, by already planning DR type strategies as is already the norm with everyday IT infrastructure. Due to the many thousands of systems/vendors involved manufacturing, a lot of the time this will be simply vendor relationship and escalation management. Again, it's obvious, but is mis-managed frequently (I have found).
@scottalanmiller Initially not but something I would look at down the line if applicable. Depending on the industry I would assume (naughty) there is a spectrum of specific software designed with a type of manufacturer with their different requirement in mind eg food vs parts vs complete products etc. In this instance I wouldn't want to box myself in, but it's not something I have enough exposure to make a decision on yet. -
Don't necessarily have to box yourself in, but can be aligned with a major player or two that focus on your market.
