Having a managed service provider (MSP) business is essentially the same as other businesses but with significant differences altogether. MSP firms typically rely on referrals as they grow, which can be quite a challenge when you don’t have a consistent pipeline of customers to keep the company afloat.
Does this mean you’ll stop running your business? Definitely not. What you need is to create a solid MSP business plan in advance so you can always be prepared for what’s to come.
Now that the year is ending, you might want to take it as an opportunity to get on with your planning. Getting prepared for what’s to come can get you one step ahead of your competitors, especially if you know how cutthroat the market can be.
With a solid MSP business plan, you’re able to lay a roadmap that’ll help the organization define several crucial aspects, including the company’s long-term goals, marketing strategies, room for growth, and profitability.
Essential Elements of an MSP Business Plan
All businesses started with a business plan that served as a guide throughout the journey. Even when you’re already an established MSP company, you still need to update your plan regularly.
This is to ensure you’re consistently aligned with your goals, missions and visions, MSP marketing, and other strategies essential to keep the business on its right track.
When your plan is up-to-date, it’s easier to take a step back and reevaluate your current standing. You can efficiently tell if all aspects are met, and if they aren’t, a backup plan should be created to mitigate the risks and impacts it may cause.
With this in mind, it’s helpful to take a good look at the essential elements of an MSP business plan, so you know if you’re ticking off all the boxes. If not, you’ll know what to focus on as you create the agenda for the following year.
These elements are:
With a solid MSP business plan comes a mission statement that your company can use to remind you of what you do and why you do it.
And take note that it’s not just a simple statement you create just for the sake of having one. Instead, the mission statement is there to lead your MSP business to the right path.
For example, your company’s statement is to become the leading IT services and support provider. In this sense, take a step back and reassess if the recent years have brought you closer to this goal.
If not, it means you may want to redefine your business plan and work harder to achieve it. It’s also crucial that your team is aware and constantly reminded of the mission statement so they won’t be sidetracked while doing their job.
An executive summary is like an overview of your MSP business. It should briefly describe the business nature, customer persona, services you offer, and what challenges or struggles you aim to solve through those services.
The executive summary also includes other vital components such as where your funding will come from and your team’s profile.
In essence, this summary should explain the ‘whys’ of your MSP firm. Why are you operating? Why do you want to offer your services?
Why do you choose this niche or market out of so many potential customers out there? These questions are all critical in defining your goals as an organization and how you can achieve them.
Some entrepreneurs think that the executive summary is only needed when starting a company. This is where most businesses go wrong because they forget to update and retain their guidelines as they expand.
Even when you’re already an established firm, updating your summary is of high importance if you want to keep your eyes on the prize.
The business description is often underrated or even forgotten by most managed service providers. They think that having the mission statement and executive summary is already enough to create a robust plan.
But if you want to be more competitive and efficient for the next year, you might want to consider revisiting your business description.
Your mission statement is included in the business description part, but it still has other important sections that you need to remember. Aside from your company’s vision, the description may also contain your core objectives,
key tracking metrics, and strategic goals. As you can see, your business description is more than just a collection of words and phrases.
If you’re able to devise an efficient one, it can help you achieve your long-term goals as an MSP business.
After outlining all your goals, missions, and visions, here comes the part where you need to prove that all of those aren’t just a mere plan but a viable one.
The market analysis element should demonstrate that you can penetrate the market with your services and how you plan to introduce them.
So, in other words, the analysis is comprehensive research that includes essential factors such as your target customers, who or what your competitors are, and lastly, where you currently stand or your position as a brand.
Having all this information can help you analyze the feasibility of the plan. The market analysis can significantly make or break your MSP business.
Since MSPs are typically localized in nature, it’s non-negotiable that you do market analysis as you work on your solid business plan for the next year.
When the heavy researching part is done, you’re on to the next order of business, which is the action plan. This element should fundamentally define what you plan to do for the coming year, or years, for that matter.
Do you intend to expand the business, or do you like to keep it as it is small but stable? Are you open to taking more risks, and if so, what are your plans to make it so?
The action plan is also the part where you’re taking the time to measure the results of your strategies. In this regard, creating several key performance indicators (KPI) could help in assessing if you’re on the way to your objectives or not.
For your MSP business, some KPIs you should measure is the sales conversion rates and the monthly recurring revenue. Having these measurable indicators can help you track the efficiency of your business plan and the operations as a whole.
Your MSP business should always be ready with a solid business plan. As the new year approaches, you might want to take a step back and reinvent your scheme so you’ll always stay on top of your game.
A sound business plan won’t only help you win investors and partners, but more importantly, you can keep the team on the right track as you work your way to achieving your mission and vision for the company.