5 Steps to Creating a Killer MSP Business Plan

As a managed service provider (MSP), you know the importance of having a solid business plan. It serves as a roadmap for your business, outlining your goals, strategies, and financial projections. A well-crafted business plan can help you secure funding, attract clients, and guide your business toward success.

In this article, we’ll discuss the five essential steps to creating a killer business plan that will set your MSP up for growth and profitability.

Step 1: Define Your Business

Before you can create a business plan, you need to have a clear understanding of your business. This includes defining your target market, services, and unique selling proposition (USP).

Target Market

Your target market is the specific group of customers that you will serve. As an MSP, your target market may include small to medium-sized businesses in a particular industry or geographic location. Understanding your target market will help you tailor your services and marketing efforts to attract the right clients.

At first, you might decide you will take whatever business you can get, but as the years go by, it doesn’t hurt to establish certain industries that you fit in with the best. For example, maybe you are one of the only MSPs in your area that has experience with dental offices. While you don’t want to shoo away other business, establishing some marketing and specific packages for dental offices and producing materials, like case studies, will help you get in with other similar businesses.

Services

Next, you need to define the services you will offer as an MSP. This may include managed IT services, cloud solutions, cybersecurity, and more. Be sure to outline the benefits of each service and how they will help your clients achieve their business goals.

Consider “Foot-in-the-door” offerings too. For instance, in our area, most businesses have been using one local telephony company that still primarily offers traditional on-prem phone systems. They are expensive, hard to scale, and missing a lot of modern features, so VoIP is a no-brainer for a lot of our prospects. We don’t make a lot of revenue selling and supporting a VoIP system, but it gets us into the building and gives us an opportunity to talk to the decision-makers about the rest of their IT.

Other foot-in-the-door offerings could include cybersecurity compliance (especially now that insurance companies are bringing up compliance with their customers), web design, zoom rooms, office relocation services, and plenty of other technologies.

Unique Selling Proposition (USP)

Your USP is what sets you apart from your competitors. It’s the reason why clients should choose your MSP over others. Your USP could be your expertise in a specific industry, your exceptional customer service, or your use of cutting-edge technology. Clearly defining your USP will help you stand out in a crowded market. In a more competitive market, try to avoid the generic stuff, and focus on something more tangible. Maybe you are one of the only MSPs that truly covers everything for a flat rate, or maybe you are the only MSP with certain certifications to meet compliance requirements. When you can set yourself apart from your competitors so much that it’s less like comparing apples to oranges, and more like comparing apples to pizza, it becomes much easier to win over proposals, even when you cost more than the rest.

Step 2: Conduct Market Research

Market research is crucial for understanding your industry, competitors, and potential clients. It will also help you identify any gaps in the market that your MSP can fill. This is absolutely an area we can help you with, but let’s break down a few of the most important things to consider.

Industry Analysis

Conducting an industry analysis will help you understand the current state of the MSP industry, including trends, challenges, and opportunities. This information will help you make informed decisions about your business and stay ahead of the competition.

In our experience right now, there really isn’t a better time to be an MSP. Sure, margins on hardware and software sales are low, but for the first time ever, more and more business owners are actively asking questions about cybersecurity. This is partly due to how commonly organizations run into devastating threats and scams, and also due to business insurance companies offering lower rates or even not accepting businesses based on their cybersecurity hygiene. Business owners are getting asked tough questions by their insurance providers and your MSP should be more than prepared for this.

Of course, the specific industries you tend to work with and your state and local climate will also dictate what sort of trends to follow.

Competitor Analysis

A competitor analysis will help you identify your competitors and their strengths and weaknesses. This will allow you to position your MSP in a way that differentiates it from others in the market.

Are your competitors clearly jumping into cybersecurity? If not, you have a huge edge. Look for other solutions to add to your stack that your competitors offer (or better yet, don’t offer). Read reviews and get a vibe for how their customers are treated, and don’t make the same mistakes that you discover.

Customer Analysis

Understanding your potential clients is essential for creating a successful business plan. Conducting a customer analysis will help you identify their needs, pain points, and preferences. This information will help you tailor your services and marketing efforts to attract and retain clients.

Step 3: Develop Your Marketing Strategy

A solid marketing strategy is crucial for attracting clients and growing your MSP business. Your marketing strategy should include both online and offline tactics to reach your target market effectively.

Online Marketing

In today’s digital age, having a strong online presence is essential for any business. Your online marketing strategy should include a professional website, social media presence, and search engine optimization (SEO) tactics to improve your visibility and attract potential clients.

All roads should lead back to your website, which means establishing landing pages for your offline and online campaigns, offering free deliverables and other high-value items directly from your website, and even using your website as an educational tool to assist businesses as they navigate through this increasingly complex world of technology.

Offline Marketing

While online marketing is essential, don’t overlook the power of offline marketing tactics. This may include attending industry events, networking with potential clients, and partnering with other businesses to reach a wider audience.

We’ve put together a huge guide on how to establish your marketing plan from the ground up, starting with your budget, and how to prioritize what you need to do. Check out our massive 4-part MSP Marketing Guide series here.

Step 4: Create a Financial Plan

A financial plan is a crucial component of any business plan. It outlines your projected income, expenses, and cash flow for the next three to five years. A well-crafted financial plan will help you secure funding and make informed decisions about your business.

Income Projections

Your income projections should be based on your target market, services, and pricing strategy. Be sure to consider any seasonal fluctuations or potential changes in the market that may affect your income.

Expense Projections

Your expense projections should include all the costs associated with running your MSP business, including salaries, rent, utilities, and marketing expenses. Be sure to research industry benchmarks to ensure your expense projections are realistic.

Cash Flow Projections

Cash flow projections are crucial for understanding the financial health of your business. It outlines the money coming in and going out of your business, allowing you to identify any potential cash flow issues and make adjustments to your business plan accordingly.

Step 5: Review and Revise Regularly

Creating a business plan is not a one-time task. It’s essential to review and revise your business plan regularly to ensure it remains relevant and effective. As your business grows and the market changes, your business plan should evolve with it.

Annual Review

Set aside time each year to review your business plan and make any necessary updates. This will help you stay on track and make informed decisions about your business.

Quarterly Reviews

In addition to an annual review, it’s a good idea to conduct quarterly reviews to track your progress and make any necessary adjustments to your business plan. This will help you stay agile and adapt to any changes in the market.

Let your business plan be a living document that evolves with your business, reflecting your aspirations and guiding your path to success in the ever-changing business landscape.

Let Us Assist You With Your MSP Marketing Plan

We’ve been helping MSPs for over a decade with their web presence and marketing, and we have solutions ranging from prebuilt websites and marketing materials for small MSPs just starting to market, and we can build out custom marketing plans and handle all of the fulfillment for aggressive growth, including the marketing for events, webinars, and vendor MDF funds. We’ve been an MSP ourselves for over 30 years now, and as the expression goes, we eat our own dog food.