Myles Keough, CEO of Mansfield, Mass.-based Spade Technology shares three suggestions he’d apply if he were launching an MSP from scratch today:

1. Strive for profitability right away – When starting off, focus on having a high profit organization.

That profitability allows you to do things that make it easier to bring in more clients faster, to have better results, to differentiate yourself, to create a better culture, to attract better people.

That profit engine is what really drives all that. 

We often worry about getting the revenue in now, build the company – knowing we're going to lose some money, but thinking we'd be profitable later.

The bigger you get, the harder it is to change your model to support that profit.

Oftentimes, you start off adding clients and figuring out how to make it work.

Because you're not profitable enough, you can't have the staff that you need.

You aren't delivering the high-quality work because you have to cut corners.

You don't have the tools to be more efficient in order to do automation and to provide additional services and features to your clients.

You don't have that because you don't have the profit to be able to afford those things. You can't hire well enough ahead of time to train and get employees up to speed as you're onboarding new clients.

So you create this culture of under-delivering as acceptable because there's no alternative – because you don't have the profit to deliver what you want to deliver. 

2. Bring on the right clients – Everyone worries about growing their business by adding more clients.

But the fact is, for example, if in a year you add ten A clients, ten B clients and ten C and D clients, you're going to spend an equal amount of time on all of them.

And the C and D clients are going to cause you to get distracted from your A and B clients.

And oftentimes your C and D clients are less profitable.

They don't believe in you or your way, they don't buy into your process.

Therefore, they are not doing project work with you.

They are not doing the right things to make their environment quieter, their users happier, their employees more efficient and grow their business.

Everyone is worried about getting as many clients as they can, but the big miss there is that they're going to be better off having half as many clients that are profitable, good-fit clients than have twice as many clients that aren't.

Bad clients are going to be like a cancer in the organization.

It's going to affect employees' morale, all your A and B clients, and your bottom line. Starting today, I would focus a lot more on being selective as to whom I would do business with, as opposed to doing business with anybody I can sell.

3. Jumpstart sales right away – A lot of MSPs start out where they're so worried about having the best service possible and they don't worry at all about sales.

What happens is that they only sell when they need a client.

There's a couple drawbacks to that.

You create a culture that isn't used to onboarding, as opposed to having an organization that's built so that it can handle onboarding customers without forgetting about its existing client base.

We went through this, where we would sell in these binges.

We'd sell to ton of clients, then we'd turn and focus on onboarding them.

So we'd spend three months selling clients and then six months onboarding them, and you're shifting your resources back and forth.

Just make it part of the rhythm.

The analogy I give to my team is, it's like if you're riding a bicycle and you're coming up to a hill.

You wouldn't want to come to a complete stop before you start going up that hill.

But if you're consistently going at a certain speed, the hills become easier to overcome. That's what it should be like when you're used to bringing in new clients.

It's just part of what we do: every month and a half, there's a little hill and you get over it. The company is built to absorb it.

You can't have that operationally unless you're consistently focused on sales.

 

Editor’s note: Comments are edited to improve readability.

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