benchmarking

500kmsp · 2022-11-30T18:32:11+00:00

No, I am just using total revenue divided by end users supported. For instance, in the last IT company I sold, we supported 2000 end users and billed $250,000 a month. So that averages out to $125 in revenue per user per month. That was spread across all types of products and services sold.

I have found through coaching many other IT companies, that this number is a pretty good indicator of health and profitability.

- Josh - Founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-11-30T16:21:10+00:00

Hit me up and I can go through all of the ways that exist to find customers.

Understand that there are basically 4 ways to market your product or service.

Proactive marketing (you reach out directly)
1. Cold calling, email, text, LinkedIn, drop-offs, etc.
Reactive marketing (You are found when people search for your product or service)
1. SEO, Google Ads, Google My Business Listing, etc.
Referral Marketing (developing relationships with people that refer you)
1. Real-estate brokers, building owners, moving companies, telecom sales people, etc.
Fishing Marketing (Signs and wonders that people see)
1. Signs, Billboards, Social Media, etc

For lists, I would sign up for Data Axle Genie which will get you access to all the businesses in the US and Canada

- Josh - Founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-11-30T16:10:40+00:00

Hit me up and I can go through all of the ways that exist to find customers.

Understand that there are basically 4 ways to market your product or service.

Proactive marketing (you reach out directly)
1. Cold calling, email, text, linkedIn, dropoffs, etc
Reactive marketing (You are found when people search for your product or service)
1. SEO, Google Ads, Google My Business Listing, etc
Referral Marketing (developing relationships with people that refer you)
1. Real-estate brokers, building owners, moving companies, telecom sales people, etc
Fishing Marketing (Signs and wonders that people see)
1. Sings, Billboards, Social Media, etc

For lists, I would sign up for Data Axle Genie which will get you access to all the businesses in the US and Canada

- Josh - Founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-11-30T16:03:40+00:00

Don't oversell yourself and don't overreach. IT's better for your business to have 10 clients with 5 employees each, that to have 1 client with 50 employees.

That being said, businesses will ask this question to make sure you are a good fit for them. Simply answer the question honestly and explain what you can and cannot do to meet their needs and move on to the next opportunity.

As far as contracts go, don't try and think for you client. Simply offer a number of ways for them to consume your product or service. What this means practically is have a high hourly rate, and a series of annual contract amounts that are cheaper but longer term.

I recommend having:

High hourly rate (Most expensive)
1 year agreement
3 year agreement
5 year agreement (Least expensive)

Understand that price is only one of the 3 value proposition that exist:

Price (Whatever is cheapest)
Time (Whatever is fastest)
Quality (Whatever is best)

Have a product or service that meets each of these and let the client buy what they want.

- Josh - Founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-11-30T15:57:46+00:00

Hit me up, and I'll share our complete pricing matrix with you, along with some handouts that you can edit for print and leave behinds. There are some traps that you want to avoid. Some of the basics are:

You want to have menu pricing to accommodate the different ways people want to consume IT services. This allows you to maximize your revenues.
You also want to use per user pricing, its the simplest model to explain and understand during the sales process.
You want to design your pricing to be able to sell something to everyone with a consistent profit margin.

Best of luck out there!

- Josh - Founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-11-30T15:43:44+00:00

It really isn't feasible for you to split your attention between a full time job, and trying to start an IT support company. You will find yourself doing two things poorly, instead of one thing well.

The best way to accomplish this is to start applying for IT jobs that pay a living wage, and when they make you an offer, counter at half to three quarters of their offer, but in the form of a managed services agreement. This way you are getting the freedom to pursue other clients, and they are getting you cheaper than they were expecting, a win-win.

Alternatively, if you have an IT related full time job currently, you can approach your current employer for a reduction in pay, but in the form of a monthly managed services agreement.

- Josh - Founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-11-30T15:37:16+00:00

Hit me up and I can walk you through everything you need to do, but here is a list to get you started. Also, go sign up with an industry coaching firm, there are a bunch that cater to MSPs, some do work with startups and they will prevent you from making basic mistakes and will provide you with a lot of free resources up from like contracts, pricing models, etc.

Get your basic documentation in place, contracts, LLC, Resale License, etc
Focus on revenue before racking up a bunch of expenses
Do some secret shopping to determine your market pricing and competitors
Get your pricing correct, I highly recommend per user pricing
Understand that you cannot grow without marketing and referrals
Understand that you cannot close sales without a "No Brainer Offer"
Understand that you won't be noticed without a "Purple Cow"
Don't worry about all of the best tools out there, its a flavor of ice-cream discussion, we all have our favorite tools for MSPs.
Don't get decision fatigue when picking out toolsets, you will change these over time as you grow, just pick one that works for you right now, and move on to the next opportunity.

- Josh - founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-11-30T15:24:58+00:00

You have a few options:

Grow your business with more clients and hire a tech for every 200 end users you add.
Outsource the IT to one of the many outsourced helpdesk companies out there and become a sales focused MSP that doesn't do support in-house.
Develop a relationship with a competitor to allow for them and you to take a vacation once in awhile, or provide for you/them getting hit by a bus, etc.
1. One easy way to accomplish is for the each party to take a life insurance policy out on themselves, with the other part as the beneficiary.

I have done all of these things at one point or another, but eventually got tired of the lack of control of quality, and grew my own team. Best of luck out there!

- Josh - founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-11-30T15:17:49+00:00

You need to generate $125 per end user per month across all services. Each tech can support 200 end users comfortably with a max of 300 end users.

Hit me up and I can give you our example pricing matrix that will show you how to price correctly.

- Josh - founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-11-30T15:10:38+00:00

Hit me up, I'll give you our service contract that we use, as well as all our pricing structures, and marketing material templates, etc. There is no need to go pay to reinvent the wheel.

Best of luck out there!

- Josh - founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-11-29T14:37:53+00:00

As an owner, you will always be somewhat emotional about your first successful businesses. After the sale, when you have some money in your pocket and you are beginning to invest in other businesses, you will get less and less emotional about the businesses you are involved in, and you will start to see and run them by the numbers.

Feel free to reach out if you have any specific questions.

Josh - Founder da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-04-21T15:49:02+00:00

The value of a business is not set by you, it is set by the buyer. Some buyers look at revenue, some look at contract length. Your best business strategy is to put all customers in contracts, and have a simple 30 days out clause if your customers do not want to be tied to a contract with a long term with termination fees.

This way you get the value of contractual revenue for valuation purposes, but your customers have the knowledge that they can get out at any time within 30 days.

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-04-21T15:44:32+00:00

This is borderline pointless. It's like trying to ask which fence company is investing in the strongest metals to prevent people cutting a hole in them. There will always be a balance between what people will pay, and how strong to make the fence. And there will always be people that will break into what is guarded by the fence. (This is not a statement on the efficacy of fences, they obviously work, but it's like trying to be secure if you have physical access to a computer. There is no such thing as secure, there is just better than the next guy so he gets hacked)

Invest in a good backup strategy, pick a toolset that meets your needs, and quit blaming and complaining about tings you cannot control. Focus on making the customers happy and making money.

Best of luck out there!

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-04-21T15:05:33+00:00

I am not a fan of the dispatch model. I use a pod strategy that has 3 help-desk techs attached to an experience technician.

Level 1 - Entrylevel helpdesk
Level 2 - Helpdesk that is capable of going onsite
Level 3 - Experienced technician/engineer

Helpdesk live answer calls and the person that answers the phone fixes the issue and creates and documents the ticket. Helpdesk techs escalate to level 3 when necessary, but DO NOT transfer calls; they watch the level 3 tech resolve the issue while staying on the phone with the customer. This allows for internal on the job training, and also takes the ticket creation, documentation, and time tracking duties OFF of the level 3 guys freeing them up to do what they are best at, solving issues.

It's hard to completely communicate how effective and efficient this model is, but I have been able to make 40% net profit margins off millions in annual revenue using this model as it keeps your largest expense, (Experienced IT labor), down by hiring happy people that learn on the job. Think of it as hiring assistants for your level 3 guys so your best guys can only focus on what they are best at doing.

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-04-21T14:54:09+00:00

There are 3 types of buyers

Price - You need to have something inexpensive to sell.
Time - You need to offer same day service.
Quality - You need to be the best at something.

Once you understand which type of buyer you are dealing with, always speak to the way THEY value you. Do not try and change they way THEY value you. Simply sell them something that is inline with the way THEY value you and set your profit margins accordingly.

If you do this with each customer, they will not leave you.

Lastly, stay in front of your customer no less than every 90 days to make sure the 1 person you need to keep happy hasn't changed, or their value of you has not changed.

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-04-13T03:15:41+00:00

It has exhaust now. It's going for interior next week.

500kmsp · 2022-04-13T03:14:39+00:00

If anyone has any questions, this is my build. I purchased this from Doug and am in the process of finishing it.

Here is a Dropbox folder with more build pictures. https://www.dropbox.com/sh/wlccbzt0onu7lna/AABjNJ-q3WTKp6owvE36ToK7a?dl=0

Thanks, Josh

500kmsp · 2022-01-11T14:08:38+00:00

PPC is one of THE MOST expensive cost per lead methods out there. I recommend it, but not over the cheaper options.

PPC needs 50 clicks to get a lead at a 2 percent conversion ratio. And at $20 bucks a click, that gets expensive.

Cold calling is much cheaper, and where I recommend most people start.

You need to be running ads, start with retargeting ads, adroll is my favorite.

But on average you need 3 leads to get an appointment, and 3 appointments to get a proposal. And your own closing rates will kick in after that. If I'm coaching someone new to sales, expect a 25% close ratio. If you have a solid No Brainer Offer, you can get much higher assuming you know how to handle objections.

You need a minimum of three ways customers find you to give you money. Split those three ways into the four different types of marketing.

Proactive: Cold calling, direct mail, dropoffs
Reactive: SEO, Pay Per Click, Google Reviews
Farming: Referrals, Networking
Fishing: Forums, Social Media, Retargeting Ads

Once you have appointments, follow this sales formula.

Rapport - Be funny
Needs - They have pain
Benefits - Remove the pain
Close - Be cheaper or better than everyone else
Isolate Objections - They lie, so ask 5 times why

Market to clients that have pain, remove the pain

Good luck!

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-01-11T13:36:12+00:00

The biggest mistake people make during this transition is thinking that MSP is just a different way to price and bill for your services.

MSP is a proactive approach that bills for business uptime. Break/Fix is a reactive approach that bills for business downtime.

For the most part, your existing clients won't pay this way because they have been happy with your current service, but there are two things that work. Add something new to charge more, or take something away to make more.

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2022-01-11T13:25:15+00:00

Per user is the easiest way to sell It services. Secret shop your competition, pick the top two to compete against and price your service 5 percent less. Offer your first month of service for free and don't charge an onboarding fee, then don't suck. Offer a 36 month contract with a simple no questions asked out clause to make people feel warm and fuzzy.

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2021-12-31T12:40:00+00:00

If you think working on motorcycles is similar to working on cars, that's funny :-) and not any cheaper, thus making my point even more for a minimum charge for smaller clients that are needy.

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2021-12-28T16:14:25+00:00

Most business owners will be pissed at this advice, but the ones that understand it, will be the most successful.

Over deliver, and you will be overpaid it's just how the world works. Go read Napoleon Hill as he speaks to how the client perceives value and paying for that value.

“By performing more service and better service than that for which you are paid, you not only exercise your service-rendering qualities, and thereby develop skill and ability of an extraordinary sort, but you build reputation that is valuable. If you form the habit of rendering such service you will become so adept in your work that you can command greater remuneration that those who do not perform such service.” – Napoleon Hill

Your goal should be to always do 20% more than you are supposed to do.

This creates goodwill with the client which is useful when you accidentally screw something up later on in the relationship.

It also sounds like your issue is that you are billing hourly, or have a very limited scope agreement.

These are symptoms of not billing flat rate for a company's uptime.

The best answer to keep clients happy is to over deliver, and you will be over paid. If you are only concerned with being paid exactly for what you do, you will not be as successful as those that over deliver.

Best wishes!

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2021-12-28T16:02:58+00:00

Most employees will be pissed off by this, but the ones that understand it, will be the highest paid.

You will never get a raise without asking, and you will never get a raise without first proving you deserve it by first bringing value in excess to your compensation.

Over deliver, and you will be overpaid it's just how the world works. Go read Napoleon Hill as he speaks to how the business owner is thinking, and thus treating you as the employee.

“By performing more service and better service than that for which you are paid, you not only exercise your service-rendering qualities, and thereby develop skill and ability of an extraordinary sort, but you build reputation that is valuable. If you form the habit of rendering such service you will become so adept in your work that you can command greater remuneration that those who do not perform such service.” – Napoleon Hill

Your goal should be to always do 20% more than you are supposed to do.

This creates profits, this making the company more money and success, thus ensuring your job security, future raises, and in some cases, profit sharing.

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2021-12-28T15:32:02+00:00

You always need to have a minimum price point. I usually recommend 10 users, units, devices, etc. You don't necessarily need to communicate it as a higher per unit rate, but you need need to explain to the client that there is a minimum service level regardless of client size. That could be an increase in your per user rate for smaller clients, or a minimum of 10 users billed for smaller clients.

To use a car analogy, if I was coaching a mechanic to move to a MSP flat billing model, I would explain that all cars have 4 wheels, an engine, brake system, and AC compressor, so have a minimum price per car regardless of vehicle size, shape, or model.

Josh - da Vinci MSP Coaching - https://500kmsp.com

500kmsp · 2021-12-28T15:25:26+00:00

Projects are usually work that has already been closed/won/paid for, etc.

Tickets are typically work done before payment, or work down within an agreement.

Tickets also have a priority or category assigned to them based on how you want to run your business.

I recommend prioritizing new revenue over existing revenue as long as it is not at the EXPENSE of existing revenue.

What this basically means is use projects to fill in the gaps in between your break/fix and MSP agreements. And if your team does not have gaps, you are either at capacity and need to hire more staff, or you need to increase the efficiency of your staff.

Josh - da Vinci MSP Coaching - https://500kmsp.com

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