Business advice from industry experts.
Jay Parisi, Partner at Aegis Technology Partners
Jay Parisi, a partner in Aegis Technology Partners based in Norwalk, CT, shares three suggestions he'd apply if he were launching an MSP from scratch today.
1. Don't offer a la carte service – The point behind being an MSP is to take control and manage clients' network and infrastructure. To give them a menu of different types of services and different offerings for them to pick and choose how much they think they can afford was not a good idea. When you're responsible for maintaining everything, you don't really want them to not have a good backup. So, what we do now is give them a flat price and include whatever backup we want to put in, anti-virus, anti-spam; and don't really give them an option to pick and choose off an a la carte menu.
They're not really educated enough to know what they need. A lot of them are just comparing what they think they can afford or why do I need this as opposed to that. And we're picking a standardized set of tools and services that we're experienced with, that we know how to use, and we know are reliable. That, in turn, helps us maintain their networks and their data to the level that it should be maintained. BDR is a good example. People are pricing BDRs at $500 a month or whatever it is, and the client thinks why do I need that? I'll just use a tape backup. I got someone here to rotate the tapes, the external hard drives. Then something does go down and you realize it's going to take them 3-5 days in order to restore everything. They're down for that period of time. Whereas, if we just put the BDR in, included it in the cost, didn't really make it a line item for them to choose, that eliminates it from the equation.
2. Do not offer any discounts – A lot of people when they're starting out are a little apprehensive about what they should charge - especially a guy who's just coming into business. A lot of new business owners are just looking to make a day's pay, like what they used to make when they were working for somebody else. And you can't really do that when you're running a business. I know a lot of guys who discount their services in order to get a contract and, once you do that, you can never really get what you're supposed to get. It's hard to raise that rate in the future without upsetting a client.
One of the things that we've done in the past is we've given a month for free but we never really cut the rate. So, if they're a little bit nervous about paying a certain amount, give them a month for free. They can factor that free month into the year that they would normally pay and that gives them almost a 10% discount. But then the following year, you're still at your regular rate. You're not locked into a lower rate for a long period of time.
3. Have a standardized type of product stack – Use something that you're very familiar with and know how to support that doesn't change from client to client. So everybody in the company knows the offering, knows how it works. Integrate into something like a Connectwise or an Autotask so that you don't have too many places to look and see how things are working, if there are any problems anywhere.
We don't have to look in seven or eight different websites to see what's working. It really helps with being efficient. And when you're working under a monthly price, you really need to be efficient because efficiency is where your profitability comes from. If you spend too much time with different types of backup software, different types of anti-virus, or whatever it may be, and you don't really have a standard, you're wasting too much time and it's eating into your profitability.
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