Most MSP founders are overworked and underpaid.

I saw someone ask "How would you start an MSP today" in a private MSP forum, and the top upvoted comments were:

• "Why would you do this to yourself?"

• "I regret starting an MSP."

• "Just don't."

But not all MSPs are equal. Not all MSP owners are overworked and underpaid. Wouldn't you be more motivated to show up to work at your MSP every day if you were making more money with less work?

MSPs that make you more money with less work probably looks something like this:

• Inbound marketing leads with short sales cycles

• Profitable service agreements, with premium pricing and upfront billing

• Strong recurring revenue

• Projects that enhance, not hurt, gross margin

• Efficient service delivery and consolidated tech stack

• Clients who trust your advice and consider you a business partner, not a tech monkey

So if we're not beholdened to maintaining existing clients and can start from scratch, here's how I'd build an MSP that makes more money with less work.

Business value for clients, not ticket management

The simplest way to make more money with less work is to focus on driving business results for clients instead of closing tickets.

There are two types of relationships that MSPs have with clients:

1. Reactive: Clients tell the MSPs what they want, and MSPs staff technicians to implement projects to the clients' specifications

2. Proactive: Clients trust the MSPs to drive business results with technology

A happy MSP has a proactive relationship, where the client trusts the MSP's technology advice and the MSP is accountable for driving business results for the client.

A miserable MSP has a reactive relationship, where the clients set the roadmap and the specifications, and the MSP bills hours and just does whatever the client says.

It's the difference between being a trusted business partner versus a tech monkey.

The most common reason miserable MSP owners are miserable is that they don't have enough control in the relationship with the client. The MSP, not the client, is the technology expert. So the MSP, not the client, should own the roadmap to drive business results with technology, not the client.

What does "business value" actually mean? I'd simplify this into 3 buckets:

1. Driving the most critical KPI for your client

2. Increasing productivity for your client

3. Managing your client's data to make it useful and secure

Driving the most critical KPI for your client

This is usually a financial goal, like revenue or profit, or a usage goal, like number of clients, users, or devices.

If you're a business partner to your clients, then you should be having quarterly business reviews with your client to understand their top business goal and discuss how you can use technology to drive toward that goal.

These business review meetings are where you set the tone as the technology expert. This is your chance to understand how you affect your client's business results. This is also your chance to show your MSP's impact on those business results.

Increasing productivity for your client

MSPs have been helping clients with productivity since the inception of the MSP industry. Enhancing productivity is an evergreen requirement for MSPs.

Quantifying "productivity" is also an exercise to be conducted in your quarterly business reviews. Sometimes it's just about time spent per user task. Other times it's about the trade-off between ease of use and security.

Although business value is for the decision-makers at your clients, productivity enhancement is for the rest of the users at your clients. Being good at productivity means all your users at your clients will be happy advocates for your MSP.

Managing your client's data to make it more useful and secure

I believe most MSPs are a bit too concerned about devices and not concerned enough about data.

It's not that devices aren't worth concern; it's that business value is usually in the data rather than the devices.

If you want to monetize any AI products, you'll need to surface useful data, ensure you're collecting the correct data, and make sure you're managing the data efficiently.

Clients usually don't care about devices as much as they care about data. You can often operating comfortably with the assumption that devices are completely untrustworthy as long as your data is secure.

Using and securing data also should be a regular topic of conversation during quarterly business reviews.

Verticalization: choosing an industry specialization

Choosing a vertical to specialize in is the easiest way to differentiate your MSP and justify premium pricing.

Most industries have a "line of business" application, or LOB, usually a CRM or ERP, that is necessary to operate within that business. Since the LOB is an app requiring infrastructure, integration & maintenance, building expertise around a LOB is the most elegant first step to verticalizing.

I believe in verticalizing so much that I wrote a whole post about vertical specialization. If you want to sell your MSP one day, verticalizing will also help you sell your MSP.

Tool stack and efficient service delivery for modern MSPs

Since I’m the MSP Finance Nerd, not the MSP Tool Stack Nerd, I’m limiting my tool stack recommendations to those that I believe affect your financials most.

If you're a vertical MSP, then you have the opportunity to make service delivery efficient by streamlining your tool stack. Please, please, please verticalize your new MSP.

First, there are a bunch of tools which I believe are not differentiators, and therefore you should just pick something competitive and call it a day. The modern MSP does not win deals solely on things like antivirus, spam filtering, or backup technology.

Most MSPs would already be considering the Microsoft stack, and this is still the correct direction. Being on the Microsoft stack is a must. This includes Microsoft 365, Extra ID (formerly Azure AD), and Intune.

This also lets you use strong policies for access management. If you're a business partner to your client instead of a tech monkey, then you should set the policies on behalf of your client, rather than the client dictating.

I recommend using Quickbooks for your single source of truth for all things billing, not your PSA. Although you should still use a competitive PSA, the modern MSP is smart on finance, so your financial data should be a first class concern, and you should use the app that's best suited for finance as the single source of financial truth.

When I say "the modern MSP is smart on finance," I mean that the modern MSP follows the simple finance best practices, like cashflow reporting and unit economics monitoring. It doesn't have to mean hiring a full-time CFO.

What about monitoring? I'm less opinionated about RMMs if you're already focusing on securing your clients' data. Monitoring, in a broad sense, is helpful. But you can make a business case against stringent RMM usage if you've already made a business case to focus on securing data over securing devices.

Summary

1. Focus on delivering business results, not managing tickets

2. Choose a vertical to specialize in

3. Bias your tool stack toward Microsoft and Quickbooks