Minor Adjustments Can Create Major Results For Your MSP Business

Of course, any MSP owner would love to discover the ‘secret’ of the industry and use it to become instantly drowning in profits. While it is possible to make your MSP incredibly successful, increasing your net profit doesn’t require any drastic moves.

Raising your MSP’s profitability requires small, trackable moves that are easy to implement but can lead to massive growth in the long haul. Here are a few quick moves that can positively change your MSP.

Adjust Pricing

While raising prices might sound daunting, they may be a necessary move to get the proper margins for your quality of work.

Price hikes are a very natural part of any business, as your company needs to adjust for the quality of work you provide (which likely has improved over time), inflation, and any new tools you’ve added to your repertoire to assist you in making the best product for your customers. While raising costs might scare away a few existing customers, your long-term margins will improve as you’re better compensated for the work you provide.

In contrast, it’s also worthwhile to consider lowering your prices. Having a lower price point lowers the entry level of potential customers, which could provide greater quantity and even more long-term client relationships that will bring in greater profit.

Regardless of how you adjust your pricing, it is important to review your margins and make only slight cost changes to get an easily trackable result. Over time, you can keep making little adjustments to find your cruising price range or adapt to your company’s improved capabilities.

Place Emphasis on Customer Retention

Retaining customers is the best way for your company to have consistent income. However, many MSPs get so caught up in bringing in new customers that they forget to give additional attention to the ones they already have.

By increasing attention to your current customers, you can make them more likely to build a long-term relationship with you. This can also be done by offering benefits to your returning customers as a token of appreciation for their loyalty.

End Unprofitable Client Relationships

The other side of client relationship management is cutting out the bad apples. While losing clients to increase profitability might sound like a paradox, there’s solid logic behind it.

If clients take massive customer service hours or prove difficult to work with, it may be time to let them go. Some clients will treat your software poorly despite proper guidance, leading to IT problems that they expect you to clean up constantly.

This frees up time and resources you can spend on much more profitable clients or reinvest into growing your business.

Increase Workflow Automation

By making an honest evaluation of where your workflow can improve, you can speed up your workflow and increase your productivity and bandwidth. Ineffective workflows can waste valuable time that could have been spent assisting other clients and underutilize your employees and resources.

Adding more automation can rapidly speed up your workflow and allow you to use your employee's skillset to focus on more difficult tasks. Having your employees freed up from minor responsibilities also enables you to take on more clients and further gain more capital.

Increasing automation can be achieved through either simply tightening up your current workflow to find any inefficiencies or adding outside tools to do it for you. Small investments in effective tools can deliver an increased ROI on your workflow.

The BMK Model

If you’re ready to begin the marathon of achieving your MSP’s profit goals, Bering McKinley can help you with the first step.

At Bering McKinley, we created a plan of small adjustments your MSP can make to increase your net profits by 17% or more.

Download our BMK Model to learn more about our plan, or contact us directly if you want to improve your MSP business.