Nearly every day I get a phone call from a startup MSP and I hear an entire plan of how that managed services company is going to kick things off the ground and rocket off into the stars.
How many actually make it that far? Less than those start, I’ll tell you that much. In fact it is probably on a factor of 1 in 8 actually make it to any form of maturity, and even of the few that make it through, only a few really achieve what the founder was envisioning.
So why go through all the trouble of actually kicking off an MSP? I hear all kinds of reasons (and I’ve also given them to people to convince them that a managed services practice is the way to go):
- It provides the lifestyle that you want.
- It lets you work from home/anywhere.
- It brings in regular recurring revenue.
- It lets you better service your clients.
- It lets you react faster.
- It gives you deeper insights into your client’s networks and lets you avoid developing issues before they take a network down.
I could go on, but needless to say, there are significant benefits to running an MSP. So then why do so many never make it off the ground?
The Top Two Reasons MSPs Fail
MSPs can fail for many reasons. Not billing enough, no proper plan, bad sales force, can’t actually do the work, and more. But there are two main reasons that an MSP is going to fail.
Keep in mind that these two reasons I’m about to share are serious and are not a poor reflection on MSP business owners in any way. Instead, they are a challenge which EVERY BUSINESS must overcome in order to reach its full potential.
So what are the two reasons?
- Lack of vision.
- Lack of consistency pursuing that vision.
When an MSP is getting started, often the business owner (not unlike yourself) has grand plans for how his business is going to fill a need in the market. I hear things like “we’re going to provide a niche service” or “I can do a better job than anyone else out there.” But neither of these statements indicate any real vision for the business. It is a glimmer of vision or may be the result of vision, but it isn’t the mature product.
The definition of vision is “seeing something.” For an MSP, a vision may be owning thirty $4,000/mo contracts by the end of five years in the lawyer space while only working 25 hours a week. Bold, but achievable. But this leads to problem #2. A problem which I personally suffer from all the time! Life has a tendency to throw us curve-balls. Most MSP owners break down under the pressure (it is immense!) and just learn to accept that they have a place in life and don’t consistently FIGHT to reach their vision.
They lose sight of the goal in the heat of the battle to get there. Then, just like the soldier out in the field, they forget why they are there to begin with. With the customer alarms, and loud emails and phone calls, constant meetings, and the humdrum of daily life they forget why they got into this whole mess to begin with. Eventually, they throw their hands up and give up. They sell the business off or extinguish it.
So that leaves some questions here for me to ask you. Do you have the chutzpah to build the next Mindshift or Network Depot? Are you able to stay in the trenches and still maintain your center?
Why don’t you share your thoughts on this in the comments below.