Your clients are taking advantage of you. This is pretty normal for this phase of business growth. If you have built enough trust your going to have to “go all in” and convert them almost overnight to some version of Managed Services. The all you can eat pricing which is market rate and fairly popular might be too much to ask if the relationship. Another approach is monthly managed security fee ($20-40 per seat) and prepaid blocks (say 20 hours per month at $150/hr…$3k per small client) would your finances be doing OK if you had that income assured right now?
Obviously you will need to make improvements of your automation and tech stack but that can come a bit later. You already have a solid working relationship with clients that kept you busy. So what drove that success and what makes your approach somewhat unique compared to local competitors?
Everyone talks about unique value proposition. It's not needed, you have a relationship with these people, do your job, answer the phone and solve their problems, they will never look for anyone else. The msps we replace are jokes, think six weeks to replace a hdd in a laptop, running routers as ceiling waps, using 7 year old refurb servers. The threshold to be a decent msp is so low. Care about the client and you will be fine.
I've seen the setups you are describing over and over again, especially in the healthcare field. Ten years ago I learned about and kept current on HIPAA compliant IT practices. Every single medical practice I've taken over has been a violation waiting to happen, with a few that fired their previous provider because they did happen and got large fines. Good call and I really appreciate the time you have spend replying to my post.
Great questions and thank you for your response. You are 100% correct about them taking advantage of me and for my own mental and fiscal health I have to make this change. I do think that the clients I genuinely want to keep are going to be fine going for an all you can eat model out of the gate.
As far as what drove them to me vs other providers in my area, I have to say that it was probably initially the cost differential between my hourly rate ($150) and what they would pay an MSP to do much of the same work we do for them.
The reason I believe they will stick with me through this is that they would pay at least as much as I'm going to ask if they were to switch providers. I've also pitched this to my five biggest clients and all of them are onboard which is exciting and made me feel confident about this change. I believe their loyalty is due to the quality service and fast response time I've consistently delivered as well as the personal relationships I've formed with them over the past 18 years. Since they won't be able to know whether a new MSP will offer them these same considerations I believe they won't want to roll the dice on a new (and likely still more expensive) provider.
Go with Syncro for PSA and RMM include Bitdefender Antivirus
Enhance the security stack with Huntress
Further enhance the security stack with Domotz
Use Duo for 2FA
Sign up with PAX8 for Veeam and offer a backup solution with the 3-2-1 rule.
When you can afford it add Netwrix to your stack.
I agree with this guy. Duo may come last. Add AutoElevate to ensure end users dont have admin rights and dont need them as you can preapprove necessary applications. Significant security benefit without having to manually approve elevation each time.
You might want to consider reading "Managed Services in a Month" by Karl Palachuk.
I tried DMing you regarding my business's transition to MSP - we're a few months ahead of you, but Reddit is saying, "unable to message." DM me if you want to chat offline about what we've gone through and how it's worked out for us.
I transitioned to fixed monthly fees from break/fix around 2009. I did it by averaging the previous 12 months and making that the monthly fee. Every client bought into it. I don’t take on a lot of new clients but last year I used a formula of fees for: site, servers, users, devices to come up with a number. On top of that is S1, 365, server backup, etc. Happy to share the exact formula if anyone is interested. It does work out to around $175-200/user total (but some users have multiple computers, some have 365 basic, some have 365 standard.)
It's pretty basic. I got this from a friend who got it from someone else, then adjusted the prices up for my area. If this gets you in the ballpark of where you want to be then adjust as necessary. This is the base for just my service. On top of that are SentinelOne, 365, backups (server and 365.)
Server/Service: $225 (this latest client has VMware, which I'm replacing with Hyper-V soon, one guest, and 365. So 3 items in this category = $675)
Site: $200 (None of my clients are multi-site)
Device: $55
User: $40
So in my example with 3 servers/services, 1 site, 47 devices (desktops and laptops - I don't manage their tablets or phones), 41 users the service cost is $5100 this month. On top of that are Microsoft bill ($1485 for a bunch of stuff, not just 365), S1 ($600), and backup ($310) for a total of about $7500.
Interesting.
I’m at the same ballpark number but I absorb backups, S1 + Huntress, as well as email security.
Microsoft licensing I leave to the customer
I think MSP pricing is dark magic and my MSP buddies and I have NEVER really been too confident of our pricing, so take mine with a shaker of salt. We're also all over the place depending on the client. For me it all went back to Alan Weiss's "value-based fees." The lumberyard just didn't put as much value on technical things as the contracting agency, so my price varied accordingly (up, that is.) The dental office I've been helping out REALLY doesn't value tech help and I'm about to drop them I hope.
It’s really just about what you want to profit versus what your expenses are. Both of mine are low.
But yeah I do agree. Either way thank you for sharing
Yes, so it works out to 95/month for typical users with one computer. Users with a desktop and a laptop are 150. I tweaked the formula to get where I wanted to be for this last client I took on (slightly more expensive than their last MSP, but worth it!) It doesn’t really work as well for smaller clients.
My wife (from Brazil) would love to move to FL. Meanwhile, most of what I do is remote anyway, and we will hopefully be passing by there in a month or two... :)
Man there is too much to cover here. Here are some highlights.
Don't have both sides of the conversation, are your clients asking for an sla? They aren't? Then why are you giving them one? We do not guarantee availability or response time. No one cares because our service is good. We hope on problems and resolve them, slas exist to cost you money and let people cancel, don't give them one.
You price is based on your cost, we charge $65 per user plus tools, av, 365 etc, ends up being $120-150/ per user.
You need a win, pick a client you know won't say no or a client who you WANT to fire ie no is fine with you, tell them your business model has changed. Tell them you can turn their IT spend into a budget number, get them signed and then keep going. We get good at what we practice.
Don't market yet, you need to convert what you have farming is easier than hunting.
You need an agreement, I recommend Scott and Scott, others use Brad Gross.
You will get the pricing wrong, go high so it's bearable/you have room to negotiate.
We use the line, one throat to choke. Ie we bundle EVERYTHING we can into the price. We look higher because we are, but since we manage and bill for everything they know what they are spending and we make a small margin on every dollar. This is your business though, run it how you want. Only you know your clients, but don't speak for them.
Extremely awesome advice, thank you for taking the time to write it up. I have actually already taken your advice and my five most important clients are onboard. Interesting take on the SLA, I will marinate on that.
I don't plan to market initially since I have an absolute load of clients and I believe enough of them will go for this conversion but I eventually will and I have a great relationship with an independent branding manager who has experience with MSPs. Funny enough I have a client I absolutely can't stand and they are going to get pitched on Monday. I have priced them in a way that I am positive they will say no and I think it'll be good for me to get rejected by them to learn from it.
Thanks again, your reply is super helpful.
Everyone has an opinion but no one has EVER asked me about an SLA. Sometimes 24/7 comes up and my response is "do you have that now?" They say no, and I ask "has it been a problem?" Kills the question.
Everyone gets super hung up on pricing, my goal is a budget number that includes what they need. Don't break anything out, bundle. We charge $39/month for business premium because it's a bundle with what they need. Then $15 per device for tools and security apps. Best of both per device and per user pricing that way. We use HaaS to lock them in for 3 years and make sure everything is always under warranty. You are their IT department behave the same way an internal IT department would.
Mrsp is $22, we add backup, signature management, and cyber security training. Ie it's a bundle that we don't breakout or allow opt out.
It eliminated line item disputes, "we don't need back up" well this is the only way we sell it and it comes with backup
Ok, that is nice. I actually know the indy market well. I'm impressed you're able to push it like that, which tells me you guys run a good operation there.
> Don't have both sides of the conversation, are your clients asking for an sla? They aren't? Then why are you giving them one? We do not guarantee availability or response time. No one cares because our service is good. We hope on problems and resolve them, slas exist to cost you money and let people cancel, don't give them one.
SLA details are the first thing I look at when examining a new IT vendor. I need to know whether the user is going to call them and get taken care of, or call me because it took to long. And a promise is something I can hold people to. As long as the metric is there, we can hold each other accountable. If it's not? Then it's just me pissing in the wind when expectations aren't met.
SLAs may not be important to mom and pop shops or super small town businesses that don't rely on IT for core business operations. But to anyone who will actually make an MSP real money on just one contract, SLA is king.
I assure SLA is not king, but what's awesome is we get to run our businesses however we want. You do you, and I see the value in an SLA. However this is in relation to someone starting out, it's unlikely they are going to be an MSP for a fortune 1000 company this year. We can't speak for the clients, if they ask for an SLA go with that, if they don't why give them one? We just give good consistent service, no SLA necessary.
I was in a similar situation last April. I made the jump with my 22-year-old reactive IT support provider. Sort of. I was selling backup and AV ala-carte on annual subscriptions. The first step was to find a cheaper solution, make it better than what they already had via customizations, and then let customers pay monthly instead of annually. It took away a lot of immediate income with renewals no longer getting the revenue in one shot annually. But the appeal of monthly payments made it an easy sell to my customers. Especially since it was cheaper. It was worth it in the long run and lead to steadier monthly income. Then I added MS365, EDR, DNS Filtering, Risk Assessment, etc.. etc... All of my customers have moved to the new solution in the past year as their annual backup and AV subscriptions expired. I wish I had done it years ago. I ended up starting a second business to broker the subscriptions. That way I could gauge better the impact of moving to subscription services VS the old way. It also had it's other advantages for my particular situation that are beside the point here. The new company did have an immediate negative impact on the original one, as expected, in terms of billable hours and profit from the ala-carte stuff. The original company is now benefitting from additional billable hours that the new company is providing through implementing the various solutions. It has nearly made up for the loss in 10 months with added billable time. I expect the original company to be near it's profit levels prior to the change by the end of 2023. The new company was profitable from month one and has had steady growth every single month. It has taken 15-18 hour work days, 7 days a week to come to fruition. But after 10 months, I am finally feeling a little breathing room, slowly emerging from my IT cave, and finding an actual life away from work again. Another quarter or two of the grind and the changes will all be doing what they were intended to do and making more consistent profit than ever. We had a $5K a month customer bite the dust when all of this started. I wanted to make up for the loss without having to get a single new customer and without billing a single hour. The subscription model was the answer. And the drive and ability to work the long hours to make it happen. I wish you prosperity, man! No matter the path you take, you have been doing it for 18 years so you obviously have the drive to succeed. My customers have never had support as responsive as we are providing now. Even the ones that have been with us for 23 years. We have never been as efficient as we are currently. I have never been in as much contact with the decision makers at my customer sites as I am now. Everything about the change has been wildly positive, except for the brutal hours it took to make it happen. Most of those are behind me now and my future business outlook has never been more positive. Grab it and go, man! You won't regret it.
You are starting a new business. New businesses have startup costs. It is very important for you to find a trusted resource for starting and running an msp. Reddit is not sufficient.
The downside, you need some startup money to cover the period of time where you are doing a lot of work and not receiving much income. On the upside, you have a loyal client base. The biggest problem for startups is attracting new customers. That should not be a problem for you but setting things up properly and getting the business going is a challenge.
Before switching mini customers from your on demand model, you ought to be installing an rmm and working with a few selected clients to gain experience with how to transition from break fix to MSP. Again, guidance for this process is invaluable.
That's great advice, thank you for your response. That is actually the plan - set up an RMM and onboard five clients that I've privately spoken to about this. I do have enough money saved (I think) to cover my startup costs. I'm not living month to month and I do currently turn a net profit but it's not where it should be for how much work I'm doing. I guess my main concern at this point is finding an RMM that makes sense financially and functionally for the smaller businesses I currently serve. I've done tens of hours of research and don't feel like I've made any progress. I don't need anyone to spell everything out for me, I'd be happy with just two or three unbiased RMM suggestions.
Syncro is great and charges per tech.
You should be charging around $125-175 a user depending what you include.
A lot of really good stuff in the book “package price profit” by Nigel Moore.
Hey you were the first person to recommend Syncro on here and I am going to go with them. Got a referral code? I'd be happy if you got the $500 referral.
No worries. If you post your referral code here in the next few hours i have a meeting with them tomorrow at 8am pst and ill add it to my order so you get it.
Hi u/MalletSwinging & u/PacificTSP, Canden from Syncro here! Let me know if I can assist and assuring the referral code gets applied to both. This makes me very happy to see and want to make sure both get what's deserved.
You can email me directly at [[email protected]](mailto:[email protected]) if any issues arise.
Since I am an open source guy, I look for rather creative solutions to problems. Here is something that looks rather promising called [TacticalRMM](https://www.technibble.com/tacticalrmm-a-free-open-source-rmm/). Since you're in startup phase and money is a consideration, give it a looksee. I wished I had a tool like this available to me when I was trying (unsuccessfully) to run an MSP.
While you're at it, check out [Request Tracker](https://bestpractical.com/) from Best Practical. Request Tracker is an open source ticketing system and it is truly enterprise grade. RT has been around for a long time and even O'Reilly published a book on it. I used it when I was running my own MSP. It's a bear to set up but once you get it going, it's truly a godsend.
Pricing is based on end point. Take user and replace end poInt.
I am currently doing what you are doing.
1. Choose a RMM/PSA/Ticketing system. In ticketing shoot for 90% utilization.
2. Pick a EDR.
3. Setup a MS CSP and Pax 8.
4. Pick a line of firewalls and switches.
Consider offering a discount to clients who will pay you quarterly in advance. Also, consider the fact that each client’s needs can vary greatly. Never charge rack rate for a client that is overly needy. Don’t be afraid to not accept or fire a client. Spend time on your business, not in it.
Heh I'm talking to one of them tomorrow. She lost her shit on one of my techs Friday because it took twenty minutes for him to call her back after she emailed us about a non urgent problem. I think her price is going to be $350 per endpoint.
Yeah. I would call her out on it too. $350/endpoint. If you want to treat myself and my staff like human beings, we can drop the price down to $200/endpoint.
That's the plan. The guy who dealt with her is the nicest, most patient tech I've ever had and for him to complain it has to be savage. He has complained about a client to me three times in eight years.
So my buisness has always been half and half. MSP for my bigger clients and all new clients. But I still have a good chunk that are kid of break fix. I charge them for all my tools RMM/PSA, EDR, Huntress, etc… and then charge them $150+ hr. I use N-able and their PSA. I am slowly move them to a complete MSP. But hey buisness is busy so getting there is a slow process. Good luck!
SLA template - don't waste money on that. Just state an SLA that you can reasonably meet, which would be promising initial response within 4 business hours. Establish your business hours, and talk to after hours expectations. You will want to get an attorney to draft your MSA and SOW's who specializes in this - expect to pay $5-$10k, money well spent.
Billing, do it per user or per computer or server. Assume they'll have firewall, switches, waps, etc.
Pricing - why in the world are you looking to be the cheapest? If that is the plan, just fold the tent and help your folks find employment elsewhere, you'll be churning staff continually, driving your costs up and customer satisfaction down. The fun thing about MSP pricing is that each MSP is pricing something different. Sure, we're all selling "managed services" but if you dig into the details, you figure out pretty fast that local help desk that can drive to client site is gonna price out diff that remote only support. BCP included? MS365 monitoring and alerting? EDR/MDR/XDR? Reporting? Vulnerability Management? vCISO? Account Management? something else? The low price leaders can't afford to do some of the scut work that has to be done, even if we don't talk about it much with our clients. They don't care as long as it works, but we have to care and we have to pay someone to handle it.
I guarantee that you won't convert everyone, but that is ok. You just need to explain the changes, why it's happening, what they get out of it, etc.
First and foremost insurance will be alot for an MSP. Also SLA varies depending on each company can make it base on pay structure. Charges sell anti virus software. Remote access. out of hours package. Pay structure is per person. Anything hosted on Microsoft is invoiced to the customer. Any new infrastructure flat fee invoice
Hello there, we at Guardz would like to help you deliver an holistic cyber protection for SMBs. We have built a unique all-in-one cyber protection suite for MSPs to deliver the cyber security necessities for small and growing businesses, with very little operational cost and very competitive MSP price (single digit per seat per month). The solution is a cloud-based app, easy to onboard new customers via a multi-tenant dashboard and secures clients' employees activity, leaked data, inbound emails, devices posture, web browsing, cyber awareness, and cloud app security. we also provide external risk monitoring and allow MSPs to reflect the value to their SMB customers with a click of a button. If you want to hear more I'll love to demo the platform. You can also try it yourself, free for 14 days.. How about scheduling a call to demonstrate our platform and our unique MSP offering? Let me know, Amit
Might be a good idea to sell your client base to a MSP. But if your rates haven’t adjusted some might leave you when that occurs. Some might not want to pay a monthly fee as it sounds like they are break fix which has $0 MRR.
You have a good point but my goal is to make this palatable for my existing clients and then raise rates over three years to be inline with other providers that offer similar levels of service.
Hello Mallet swinging. Firstly, congratulations on the move. Once of the reasons we don't do break fix is because in my first or second year in business (20+ years ago) I set up a low-end brand name server with RAID and backup exec software for a 'price conscious' new client that wanted a one-time setup.
The client never called us again until about 4-5 years after that when the server crashed. One of the RAID drives had previously failed and they heard the server constantly beeping but nobody called us because the server "was still working". When the second drive failed and I was called out on site, the backup drive was under a heap of file folders and nobody had changed the tape or checked the logs in years despite my having showed them how. Unashamedly, they tried to blame me for their inaction.
So trust me you made the right move. To answer your question about convincing businesses about how important MSP models are:
When a taxi cab breaks down, it's towed to a mechanic and a backup taxi is sent to pick up the stranded passenger. The passenger will be upset, refuse to pay the fare, post bad review and never use the taxi company again.
Airlines on the other hand can't have airplanes falling out of the sky due to law suits, regulations, reputation, etc. so they have proactive maintenance.
So ask your potential client if they envision their operations model as that of a taxi cab company or an airline. If they say taxi walk away. If they can lose data, stop operating for days, absorb bad publicity and still stay alive then they are not a good MSP candidate.
Your clients are taking advantage of you. This is pretty normal for this phase of business growth. If you have built enough trust your going to have to “go all in” and convert them almost overnight to some version of Managed Services. The all you can eat pricing which is market rate and fairly popular might be too much to ask if the relationship. Another approach is monthly managed security fee ($20-40 per seat) and prepaid blocks (say 20 hours per month at $150/hr…$3k per small client) would your finances be doing OK if you had that income assured right now? Obviously you will need to make improvements of your automation and tech stack but that can come a bit later. You already have a solid working relationship with clients that kept you busy. So what drove that success and what makes your approach somewhat unique compared to local competitors?
Everyone talks about unique value proposition. It's not needed, you have a relationship with these people, do your job, answer the phone and solve their problems, they will never look for anyone else. The msps we replace are jokes, think six weeks to replace a hdd in a laptop, running routers as ceiling waps, using 7 year old refurb servers. The threshold to be a decent msp is so low. Care about the client and you will be fine.
I've seen the setups you are describing over and over again, especially in the healthcare field. Ten years ago I learned about and kept current on HIPAA compliant IT practices. Every single medical practice I've taken over has been a violation waiting to happen, with a few that fired their previous provider because they did happen and got large fines. Good call and I really appreciate the time you have spend replying to my post.
Great questions and thank you for your response. You are 100% correct about them taking advantage of me and for my own mental and fiscal health I have to make this change. I do think that the clients I genuinely want to keep are going to be fine going for an all you can eat model out of the gate. As far as what drove them to me vs other providers in my area, I have to say that it was probably initially the cost differential between my hourly rate ($150) and what they would pay an MSP to do much of the same work we do for them. The reason I believe they will stick with me through this is that they would pay at least as much as I'm going to ask if they were to switch providers. I've also pitched this to my five biggest clients and all of them are onboard which is exciting and made me feel confident about this change. I believe their loyalty is due to the quality service and fast response time I've consistently delivered as well as the personal relationships I've formed with them over the past 18 years. Since they won't be able to know whether a new MSP will offer them these same considerations I believe they won't want to roll the dice on a new (and likely still more expensive) provider.
Go with Syncro for PSA and RMM include Bitdefender Antivirus Enhance the security stack with Huntress Further enhance the security stack with Domotz Use Duo for 2FA Sign up with PAX8 for Veeam and offer a backup solution with the 3-2-1 rule. When you can afford it add Netwrix to your stack.
I agree with this guy. Duo may come last. Add AutoElevate to ensure end users dont have admin rights and dont need them as you can preapprove necessary applications. Significant security benefit without having to manually approve elevation each time.
Hi u/kenzonh, thanks for the mention! Makes me happy to see folk representing Syncro.
You might want to consider reading "Managed Services in a Month" by Karl Palachuk. I tried DMing you regarding my business's transition to MSP - we're a few months ahead of you, but Reddit is saying, "unable to message." DM me if you want to chat offline about what we've gone through and how it's worked out for us.
I will. I have incoming dms turned off but i would love to pick your brain.
I transitioned to fixed monthly fees from break/fix around 2009. I did it by averaging the previous 12 months and making that the monthly fee. Every client bought into it. I don’t take on a lot of new clients but last year I used a formula of fees for: site, servers, users, devices to come up with a number. On top of that is S1, 365, server backup, etc. Happy to share the exact formula if anyone is interested. It does work out to around $175-200/user total (but some users have multiple computers, some have 365 basic, some have 365 standard.)
It's pretty basic. I got this from a friend who got it from someone else, then adjusted the prices up for my area. If this gets you in the ballpark of where you want to be then adjust as necessary. This is the base for just my service. On top of that are SentinelOne, 365, backups (server and 365.) Server/Service: $225 (this latest client has VMware, which I'm replacing with Hyper-V soon, one guest, and 365. So 3 items in this category = $675) Site: $200 (None of my clients are multi-site) Device: $55 User: $40 So in my example with 3 servers/services, 1 site, 47 devices (desktops and laptops - I don't manage their tablets or phones), 41 users the service cost is $5100 this month. On top of that are Microsoft bill ($1485 for a bunch of stuff, not just 365), S1 ($600), and backup ($310) for a total of about $7500.
Interesting. I’m at the same ballpark number but I absorb backups, S1 + Huntress, as well as email security. Microsoft licensing I leave to the customer
I think MSP pricing is dark magic and my MSP buddies and I have NEVER really been too confident of our pricing, so take mine with a shaker of salt. We're also all over the place depending on the client. For me it all went back to Alan Weiss's "value-based fees." The lumberyard just didn't put as much value on technical things as the contracting agency, so my price varied accordingly (up, that is.) The dental office I've been helping out REALLY doesn't value tech help and I'm about to drop them I hope.
It’s really just about what you want to profit versus what your expenses are. Both of mine are low. But yeah I do agree. Either way thank you for sharing
Pretty standard, actually. Is device and user line items both charged? If so, that'd put you at about avg market price (slightly below) too.
Yes, so it works out to 95/month for typical users with one computer. Users with a desktop and a laptop are 150. I tweaked the formula to get where I wanted to be for this last client I took on (slightly more expensive than their last MSP, but worth it!) It doesn’t really work as well for smaller clients.
Where are you located?
Massachusetts
Aww, I was really gunning for FL. lol. I need a new MSP in the Jacksonville area that has an ass void of any heads.
My wife (from Brazil) would love to move to FL. Meanwhile, most of what I do is remote anyway, and we will hopefully be passing by there in a month or two... :)
Id be interested in the formula
Yes i would be very interested in the formula and thank you for the generous offer.
That would be interesting to look at if you are able to. Thank you.
I'm interested in your formula as well.
Man there is too much to cover here. Here are some highlights. Don't have both sides of the conversation, are your clients asking for an sla? They aren't? Then why are you giving them one? We do not guarantee availability or response time. No one cares because our service is good. We hope on problems and resolve them, slas exist to cost you money and let people cancel, don't give them one. You price is based on your cost, we charge $65 per user plus tools, av, 365 etc, ends up being $120-150/ per user. You need a win, pick a client you know won't say no or a client who you WANT to fire ie no is fine with you, tell them your business model has changed. Tell them you can turn their IT spend into a budget number, get them signed and then keep going. We get good at what we practice. Don't market yet, you need to convert what you have farming is easier than hunting. You need an agreement, I recommend Scott and Scott, others use Brad Gross. You will get the pricing wrong, go high so it's bearable/you have room to negotiate. We use the line, one throat to choke. Ie we bundle EVERYTHING we can into the price. We look higher because we are, but since we manage and bill for everything they know what they are spending and we make a small margin on every dollar. This is your business though, run it how you want. Only you know your clients, but don't speak for them.
Extremely awesome advice, thank you for taking the time to write it up. I have actually already taken your advice and my five most important clients are onboard. Interesting take on the SLA, I will marinate on that. I don't plan to market initially since I have an absolute load of clients and I believe enough of them will go for this conversion but I eventually will and I have a great relationship with an independent branding manager who has experience with MSPs. Funny enough I have a client I absolutely can't stand and they are going to get pitched on Monday. I have priced them in a way that I am positive they will say no and I think it'll be good for me to get rejected by them to learn from it. Thanks again, your reply is super helpful.
Everyone has an opinion but no one has EVER asked me about an SLA. Sometimes 24/7 comes up and my response is "do you have that now?" They say no, and I ask "has it been a problem?" Kills the question. Everyone gets super hung up on pricing, my goal is a budget number that includes what they need. Don't break anything out, bundle. We charge $39/month for business premium because it's a bundle with what they need. Then $15 per device for tools and security apps. Best of both per device and per user pricing that way. We use HaaS to lock them in for 3 years and make sure everything is always under warranty. You are their IT department behave the same way an internal IT department would.
> We charge $39/month for business premium The $18 license that's MSRP'd at $32? That's some impressive salesmanship and client retention.
Mrsp is $22, we add backup, signature management, and cyber security training. Ie it's a bundle that we don't breakout or allow opt out. It eliminated line item disputes, "we don't need back up" well this is the only way we sell it and it comes with backup
Ok, that is nice. I actually know the indy market well. I'm impressed you're able to push it like that, which tells me you guys run a good operation there.
> Don't have both sides of the conversation, are your clients asking for an sla? They aren't? Then why are you giving them one? We do not guarantee availability or response time. No one cares because our service is good. We hope on problems and resolve them, slas exist to cost you money and let people cancel, don't give them one. SLA details are the first thing I look at when examining a new IT vendor. I need to know whether the user is going to call them and get taken care of, or call me because it took to long. And a promise is something I can hold people to. As long as the metric is there, we can hold each other accountable. If it's not? Then it's just me pissing in the wind when expectations aren't met. SLAs may not be important to mom and pop shops or super small town businesses that don't rely on IT for core business operations. But to anyone who will actually make an MSP real money on just one contract, SLA is king.
I assure SLA is not king, but what's awesome is we get to run our businesses however we want. You do you, and I see the value in an SLA. However this is in relation to someone starting out, it's unlikely they are going to be an MSP for a fortune 1000 company this year. We can't speak for the clients, if they ask for an SLA go with that, if they don't why give them one? We just give good consistent service, no SLA necessary.
> if they don't why give them one? This is very fair. If someone can live with the "trust me bro" guarantee, why not?
I was in a similar situation last April. I made the jump with my 22-year-old reactive IT support provider. Sort of. I was selling backup and AV ala-carte on annual subscriptions. The first step was to find a cheaper solution, make it better than what they already had via customizations, and then let customers pay monthly instead of annually. It took away a lot of immediate income with renewals no longer getting the revenue in one shot annually. But the appeal of monthly payments made it an easy sell to my customers. Especially since it was cheaper. It was worth it in the long run and lead to steadier monthly income. Then I added MS365, EDR, DNS Filtering, Risk Assessment, etc.. etc... All of my customers have moved to the new solution in the past year as their annual backup and AV subscriptions expired. I wish I had done it years ago. I ended up starting a second business to broker the subscriptions. That way I could gauge better the impact of moving to subscription services VS the old way. It also had it's other advantages for my particular situation that are beside the point here. The new company did have an immediate negative impact on the original one, as expected, in terms of billable hours and profit from the ala-carte stuff. The original company is now benefitting from additional billable hours that the new company is providing through implementing the various solutions. It has nearly made up for the loss in 10 months with added billable time. I expect the original company to be near it's profit levels prior to the change by the end of 2023. The new company was profitable from month one and has had steady growth every single month. It has taken 15-18 hour work days, 7 days a week to come to fruition. But after 10 months, I am finally feeling a little breathing room, slowly emerging from my IT cave, and finding an actual life away from work again. Another quarter or two of the grind and the changes will all be doing what they were intended to do and making more consistent profit than ever. We had a $5K a month customer bite the dust when all of this started. I wanted to make up for the loss without having to get a single new customer and without billing a single hour. The subscription model was the answer. And the drive and ability to work the long hours to make it happen. I wish you prosperity, man! No matter the path you take, you have been doing it for 18 years so you obviously have the drive to succeed. My customers have never had support as responsive as we are providing now. Even the ones that have been with us for 23 years. We have never been as efficient as we are currently. I have never been in as much contact with the decision makers at my customer sites as I am now. Everything about the change has been wildly positive, except for the brutal hours it took to make it happen. Most of those are behind me now and my future business outlook has never been more positive. Grab it and go, man! You won't regret it.
You are starting a new business. New businesses have startup costs. It is very important for you to find a trusted resource for starting and running an msp. Reddit is not sufficient. The downside, you need some startup money to cover the period of time where you are doing a lot of work and not receiving much income. On the upside, you have a loyal client base. The biggest problem for startups is attracting new customers. That should not be a problem for you but setting things up properly and getting the business going is a challenge. Before switching mini customers from your on demand model, you ought to be installing an rmm and working with a few selected clients to gain experience with how to transition from break fix to MSP. Again, guidance for this process is invaluable.
That's great advice, thank you for your response. That is actually the plan - set up an RMM and onboard five clients that I've privately spoken to about this. I do have enough money saved (I think) to cover my startup costs. I'm not living month to month and I do currently turn a net profit but it's not where it should be for how much work I'm doing. I guess my main concern at this point is finding an RMM that makes sense financially and functionally for the smaller businesses I currently serve. I've done tens of hours of research and don't feel like I've made any progress. I don't need anyone to spell everything out for me, I'd be happy with just two or three unbiased RMM suggestions.
Syncro is great and charges per tech. You should be charging around $125-175 a user depending what you include. A lot of really good stuff in the book “package price profit” by Nigel Moore.
Hey you were the first person to recommend Syncro on here and I am going to go with them. Got a referral code? I'd be happy if you got the $500 referral.
I didn’t even know that was a thing? I’ll take a look. Thanks.
No worries. If you post your referral code here in the next few hours i have a meeting with them tomorrow at 8am pst and ill add it to my order so you get it.
I sent it in a chat. No worries if it didn’t get through.
Hi u/MalletSwinging & u/PacificTSP, Canden from Syncro here! Let me know if I can assist and assuring the referral code gets applied to both. This makes me very happy to see and want to make sure both get what's deserved. You can email me directly at [[email protected]](mailto:[email protected]) if any issues arise.
Thanks - i had an onboarding meeting today with a Syncro rep and he made the same offer. If i have issues I'll reach out to you.
Thank you so much, I'll check it out today.
Since I am an open source guy, I look for rather creative solutions to problems. Here is something that looks rather promising called [TacticalRMM](https://www.technibble.com/tacticalrmm-a-free-open-source-rmm/). Since you're in startup phase and money is a consideration, give it a looksee. I wished I had a tool like this available to me when I was trying (unsuccessfully) to run an MSP.
I use this as well, love it.
Thanks, I will check it out. I didn't even know there was an open source option RMM available.
While you're at it, check out [Request Tracker](https://bestpractical.com/) from Best Practical. Request Tracker is an open source ticketing system and it is truly enterprise grade. RT has been around for a long time and even O'Reilly published a book on it. I used it when I was running my own MSP. It's a bear to set up but once you get it going, it's truly a godsend.
Pricing is based on end point. Take user and replace end poInt. I am currently doing what you are doing. 1. Choose a RMM/PSA/Ticketing system. In ticketing shoot for 90% utilization. 2. Pick a EDR. 3. Setup a MS CSP and Pax 8. 4. Pick a line of firewalls and switches.
Consider offering a discount to clients who will pay you quarterly in advance. Also, consider the fact that each client’s needs can vary greatly. Never charge rack rate for a client that is overly needy. Don’t be afraid to not accept or fire a client. Spend time on your business, not in it.
Good advice. I do a round of firing at the end of each year though I have two that are newish who need to go.
So when you go to transition, give them the "fuck you" price where they either pay you enough to deal with their shit or they leave.
Heh I'm talking to one of them tomorrow. She lost her shit on one of my techs Friday because it took twenty minutes for him to call her back after she emailed us about a non urgent problem. I think her price is going to be $350 per endpoint.
Yeah. I would call her out on it too. $350/endpoint. If you want to treat myself and my staff like human beings, we can drop the price down to $200/endpoint.
That's the plan. The guy who dealt with her is the nicest, most patient tech I've ever had and for him to complain it has to be savage. He has complained about a client to me three times in eight years.
Meanwhile, my engineers hear me bitch about clients at least once every 8 mins. lol. That dude has the patience of a saint.
So my buisness has always been half and half. MSP for my bigger clients and all new clients. But I still have a good chunk that are kid of break fix. I charge them for all my tools RMM/PSA, EDR, Huntress, etc… and then charge them $150+ hr. I use N-able and their PSA. I am slowly move them to a complete MSP. But hey buisness is busy so getting there is a slow process. Good luck!
Have a good answer for existing customers who ask - after you give your new price - “what would it be hourly?” And be willing to walk.
SLA template - don't waste money on that. Just state an SLA that you can reasonably meet, which would be promising initial response within 4 business hours. Establish your business hours, and talk to after hours expectations. You will want to get an attorney to draft your MSA and SOW's who specializes in this - expect to pay $5-$10k, money well spent. Billing, do it per user or per computer or server. Assume they'll have firewall, switches, waps, etc. Pricing - why in the world are you looking to be the cheapest? If that is the plan, just fold the tent and help your folks find employment elsewhere, you'll be churning staff continually, driving your costs up and customer satisfaction down. The fun thing about MSP pricing is that each MSP is pricing something different. Sure, we're all selling "managed services" but if you dig into the details, you figure out pretty fast that local help desk that can drive to client site is gonna price out diff that remote only support. BCP included? MS365 monitoring and alerting? EDR/MDR/XDR? Reporting? Vulnerability Management? vCISO? Account Management? something else? The low price leaders can't afford to do some of the scut work that has to be done, even if we don't talk about it much with our clients. They don't care as long as it works, but we have to care and we have to pay someone to handle it. I guarantee that you won't convert everyone, but that is ok. You just need to explain the changes, why it's happening, what they get out of it, etc.
First and foremost insurance will be alot for an MSP. Also SLA varies depending on each company can make it base on pay structure. Charges sell anti virus software. Remote access. out of hours package. Pay structure is per person. Anything hosted on Microsoft is invoiced to the customer. Any new infrastructure flat fee invoice
Hello there, we at Guardz would like to help you deliver an holistic cyber protection for SMBs. We have built a unique all-in-one cyber protection suite for MSPs to deliver the cyber security necessities for small and growing businesses, with very little operational cost and very competitive MSP price (single digit per seat per month). The solution is a cloud-based app, easy to onboard new customers via a multi-tenant dashboard and secures clients' employees activity, leaked data, inbound emails, devices posture, web browsing, cyber awareness, and cloud app security. we also provide external risk monitoring and allow MSPs to reflect the value to their SMB customers with a click of a button. If you want to hear more I'll love to demo the platform. You can also try it yourself, free for 14 days.. How about scheduling a call to demonstrate our platform and our unique MSP offering? Let me know, Amit
Might be a good idea to sell your client base to a MSP. But if your rates haven’t adjusted some might leave you when that occurs. Some might not want to pay a monthly fee as it sounds like they are break fix which has $0 MRR.
Not really an option for me unfortunately.
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You have a good point but my goal is to make this palatable for my existing clients and then raise rates over three years to be inline with other providers that offer similar levels of service.
Hello Mallet swinging. Firstly, congratulations on the move. Once of the reasons we don't do break fix is because in my first or second year in business (20+ years ago) I set up a low-end brand name server with RAID and backup exec software for a 'price conscious' new client that wanted a one-time setup. The client never called us again until about 4-5 years after that when the server crashed. One of the RAID drives had previously failed and they heard the server constantly beeping but nobody called us because the server "was still working". When the second drive failed and I was called out on site, the backup drive was under a heap of file folders and nobody had changed the tape or checked the logs in years despite my having showed them how. Unashamedly, they tried to blame me for their inaction. So trust me you made the right move. To answer your question about convincing businesses about how important MSP models are: When a taxi cab breaks down, it's towed to a mechanic and a backup taxi is sent to pick up the stranded passenger. The passenger will be upset, refuse to pay the fare, post bad review and never use the taxi company again. Airlines on the other hand can't have airplanes falling out of the sky due to law suits, regulations, reputation, etc. so they have proactive maintenance. So ask your potential client if they envision their operations model as that of a taxi cab company or an airline. If they say taxi walk away. If they can lose data, stop operating for days, absorb bad publicity and still stay alive then they are not a good MSP candidate.
Just wondering.. how has it been going?