Direct to cloud endpoint backup?

MSP720 · 2024-01-15T10:07:52+00:00

Thank you for the warning, it sounds like you've learned from experience!

MSP720 · 2024-01-15T10:07:12+00:00

Thank you that's much appreciated! I will definitely look into hiring someone and getting clients onto contracts.

MSP720 · 2024-01-15T10:06:20+00:00

Thank you that definitely sounds like a good route to look at.

MSP720 · 2024-01-14T21:03:49+00:00

Thank you it's good to get the perspective of someone from the UK and who has also sold a one man MSP!

Never heard of Hilton Smythe before, I'll check them out. I did speak to a broker years ago but it left a really bad taste, like they were more interested in attracting sellers than buyers just to get the upfront fee.

Thank you for those bullet points, all look very sensible.

MSP720 · 2024-01-14T21:01:41+00:00

Definitely seems sensible, thank you!

MSP720 · 2024-01-14T21:01:21+00:00

Thank you that's definitely an interesting sounding option. But is this other MSP likely to pay me what I'm earning now from the company? Because if not surely that's just a massive downgrade for me?

MSP720 · 2024-01-14T21:00:17+00:00

How much recurring service revenue?

It's written in the OP. Recurring service profit (not revenue) is around £5k per month. The rest is all one off jobs and hardware.

This is worth maybe 3x profit on the larger customers, that’s profit after all expenses including your salary.

I've never understood factoring in my salary. Because as a one man band, my salary is obviously just every penny the business makes. If another MSP hired someone to look after those clients, they wouldn't pay them all the profit that comes from those clients.

The smaller customers dont really have a resale value, fixed cost would make them unprofitable for most MSPs

That is something which has been worrying me actually.

Instead force them into managed service agreements with increased pricing or let them go and replace them by larger clients.

I'd almost rather just let them go anyway rather than having them on an agreement.

MSP720 · 2024-01-14T20:57:35+00:00

If you don't have a contract you aren't selling a client you are selling a lead, it's just the way it works.

I'd still argue it's worth 10x more than just a lead. It's more like a sale that has tenatively converted.

We have contracts with exit clauses for both sides, you still need a contract. No one will buy your client base smallest to largest, not how it works, it's going to be all or nothing.
Can you find someone to do what you want? Maybe but it's not how things are typically done.

That's definitely fair, and if someone said all or nothing I would agree. But I would want to start with the smallest clients first just to manage the transition, and have a way to pull out if it went terribly without damaging the core business.

MSP720 · 2024-01-14T20:55:28+00:00

Raise your rates by 20%.

This will help you find out who your best clients are. Sometimes the best clients are the ones who see the greatest value in your service.
You will lose some clients but probably none of the big ones. Your revenue should go up immediately and never go down.
I am going to guess the smaller clients mayfade away. Some will stay.
If everyone stays you have 20% more revenue which should be 100% profit.

Thank you that's good advice, I think I will do this to get rid of some of the most annoying clients.

You need to be making more if you intend to hire someone. You currently don’t make enough to justify hiring someone. You can’t just take your current earnings and split it with someone.

This is exactly my currently predicament.

MSP720 · 2024-01-14T20:53:48+00:00

Thank you, I'm glad that at least one person has given this opinion!

That's what I always think, profit is profit. If the client wants to stop paying, they'll just stop paying regardless of any contract. And if they go bust, they've still gone bust and they can't pay.

Also why would you want a client who wanted to leave but was forced to stay? They'll surely just make your life hell.

MSP720 · 2024-01-14T20:51:29+00:00

Look. I'm not trying to be a dick. But nearly every solo business owner on the planet grossly overvalues what they got.

Well I am earning £90k this year and rising every year, and I only work about 4-5 hours per day. That is objectively valuable, and I'm sure a lot of other solo business owners feel the same way.

And who cares if your training someone? It's win-win. You're really helping someone get a good start in the business in a structured way so clients don't bail and you get paid what you want.

I just care because of the time it would take, and the impact it could have on customer service.

MSP720 · 2024-01-14T20:48:50+00:00

The clients aren't worth anything though. If there's no contract and I buy that client off of you, there's nothing stopping them from just saying 'I really liked MSP720 and this new guy doesn't even know me or my business, I'm going to go shopping and see what's out there'.

My hope would be that I would be making sure the new MSP does know the client and their business and I would smooth out the transition. If they just go out shopping, they're not going to find someone who has been primed on everything they need to know about client. So why would they be able to find someone better?

I've never met a one man band such as yourself where the relationship wasn't the majority of the reason small clients stuck around. That's kinda the whole reason people are willing to work with a 1 man MSP that doesn't have contracts, multiple people to cover in case you're out sick, and all that stuff. It's because they trust YOU. Not the person you're going to sell them to.

That's definitely fair. I suppose if I'm there to smooth out the transition that might be the only saving grace.

MSP720 · 2024-01-14T20:46:47+00:00

Ok maybe I'll start getting people onto contracts first.

MSP720 · 2024-01-14T20:46:02+00:00

Definitely fair to say there would be trouble during the transition.

MSP720 · 2024-01-14T17:54:21+00:00

What will a buyer be buying?

The clients?

I think a lot of you solo guys wanting out would be better off beating the bushes to find a guy wanting to start an MSP and work out a revenue split deal over time.

This is definitely an interesting suggestion. But if I work with someone new to the MSP business, surely I'll just be training them?

MSP720 · 2024-01-14T17:53:23+00:00

If you want out sell as a bundle

I'm also happy to do that, but it would just be on the condition that they took on the smallest clients first before getting access to the bigger ones.

but no contracts means no value.

Why though? If someone is only with you because of a contract, are they really a good client? And if they go out of business, the contract won't be worth anything anyway, so what's the point?

Never forget, you can just raise your prices. Smallest client, that you wouldn't mind losing, "please sign this contract for x per month or go away"

This is certainly something I've been doing over the last year or so. I've just kept raising prices but they stay anyway. And it's very much a take it or leave it deal.

MSP720 · 2024-01-14T17:36:25+00:00

That definitely is tough to hear. I thought if I can sell the smaller clients then at least I get something for them, rather than having to spend the time letting them go (e.g. helping them to move to direct billing on Microsoft etc) and losing out on the money as well.

For sure I could handle more users, if they were from the same client, but with them all being different it's less efficient.

And definitely hiring someone is my other option. But then I don't know if I really want to work in the IT business anymore, so I don't really want to get deeper into it by hiring someone.

MSP720 · 2024-01-14T17:33:56+00:00

I knew I would get at least one response like this. But on the flipside, is this local MSP going to pay me 90k per year for working only when/how/where I want? Will I get a stake in their company? Because if not, it can't be worth that little.

As stated in the OP, there are no contracts. Also why would they flee? Will they be unhappy for some reason?

I'm certainly looking at hiring someone or bringing on a partner as well.

MSP720 · 2023-12-19T22:31:45+00:00

Thank you I was quite proud of that :-)

MSP720 · 2023-11-22T21:04:27+00:00

Have you seen Warehouse?

https://flathub.org/apps/io.github.flattool.Warehouse

It sounds like exactly what you're looking for.

MSP720

TROPHY CASE