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Is Your Managed Services Business Running Into These 5 Problems?

Posted February 10, 2014by Ray Vrabel

5-msp-problemsThere are many opportunities in the managed services provider (MSP) industry. In fact, MarketsandMarkets expects the managed services market to grow from $142.75 billion in 2013 to $256.05 billion in 2018, a 12.4% CAGR in the next 5 years. However, many MSPs struggle with some common problems, which make it difficult to capitalize on this growing market.

In this post we are going to look at 5 of the most common problems we see MSPs encounter and offer some direction for each issue. Let us know what you think and feel free to provide any information or insights in the comments section.


Problem 1: Steadily Increasing Sales

The key to growing any business is maintaining a steady increase in sales. If you want to grow your MSP business, you need to find a way to make steady sales in order to consistently grow your revenue. Many MSPs simply rely on referrals in order to find new business; however, this is not a sustainable model and won’t allow you to obtain steady growth.

How to break out of the referral model:

  • Lead with something the competition doesn’t. You can’t afford to be a ‘me too’ seller in an increasingly crowded market. Find a way to differentiate yourself, your service offering and/or your approach to stand out from other providers
  • Hire professional sales people. Yes, it can be a pain to find real sales talent, but there are ways to find the right people. While it takes an investment in time and resources, hiring good sales people will benefit you long-term and help you consistently win new business.
  • Stop planning and start selling. It’s important to be strategic in your sales strategies, but don’t paralyze yourself by trying to come up with the perfect strategy off the bat. Like all things in business, it takes time to learn and evolve your strategy to fit the market you’re selling to. Don’t be afraid to get started, just be sure you’re tracking your successes and failures so that you can learn from your experiences.


Problem 2: Marketing Your Business

Marketing goes hand in hand with selling. Having a strong sales team with no marketing is like having great wide receivers with no quarterback. You need someone to throw the ball so that your sales team can make some catches.

Many MSPs struggle with building a marketing program because they simply don’t know how to get started. Marketing does not need to be a foreign concept just because you consider yourself a “tech guy”. There are many simple steps you can take to get started.

Marketing Tips:

  • Leverage internet marketing to find and engage new prospects
  • Networking is key, both on a local level and a broader more industry-focused manner. Look for speaking opportunities and industry events where you can go to share your ideas and connect with peers
  • Outsourcing some of your marketing can help. You may not have time to run your company Twitter account, but perhaps a local internet marketing firm will do it for $25/month.


Problem 3: Staffing

Staffing is difficult for any business. Are you utilizing your tech staff to the fullest? Are they working on the right projects? Is it possible to stay ahead of the curve and predict where you might need staff in the future?

Staffing Tips:

  • Consider outsourcing portions of your business, like service desk, which can be more difficult to manage and keep appropriately staffed.
  • Don’t get caught short. This can be a good problem to have, because it means you have business coming in. But if you can’t deliver on time, that will lead to more problems for you in the future.
  • Build a road map of employee needs. This may seem tedious but planning beats reacting any day.


Problem 4: Finding the Right Vendor

Centralizing by finding the right vendor to help facilitate your growth is critical. As with most things there are many options in the market and you need to be very discerning about your choices.

Centralization Tips – Find a vendor that:

  • Aligns with your business model
  • Fills the most important gap in your business and that scales with you
  • Offers flexible pricing
  • Focused on continuous innovation to accommodate new technologies


Problem 5: Achieving Operational Efficiency

In order to make everything work, you need to tie together all the different pieces of your business. Achieving operational efficiency may seem overwhelming, but thankfully, it’s not impossible.

Efficiency Tips:

  • Don’t ever adopt a ‘set it and forget it’ mindset. The MSP space is very fluid and you will need to be aware of the shifts occurring in the industry
  • Experiment but be sure to ‘do to wrong quickly. This concept is critical and is been used by successful players in the Internet space for many years already.
  • Seek help from those who have gone down the road already. You may not be speaking to other MSPs, but find similar businesses and seek out their leadership/network.

We realize there are many more issues that MSPs face than just these mentioned here, but we hope this serves as a good reference in case you need help running your business.


Are there common problems we missed? Do you have other tips for solving the issues above? We’d like to hear them in the comments!


Don't fall victim to MSP pitfalls! 

Ray Vrabel is Continuum's Director of Technical Account Management and participates in product and service growth initiatives, and also manages Continuum's Technical Account Management team, which supports over 3,500 partners worldwide. Prior to Continuum, Ray joined Zenith Infotech in 2005 and held several positions including Service Desk Manager, Sr. Technical Account Manager and Sr. Manager of Service Operations. He currently has over 15 years of experience in the IT industry, specializing in Managed Services, Disaster Recovery, and Cloud Solutions. Prior to Continuum and Zenith, Ray worked at ANH Refractories, a world-class provider of Refractories products, in their Service Desk Department supporting 53 locations and 1,500 employees. Ray also worked for a startup venture at Body Media a pioneer in wearable body monitoring systems as a technical lead in their Technical Customer Support Department. Ray holds a Bachelors of Science in Business Technology Support and Training from Indiana University of Pennsylvania.

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