How To Set Up A Managed Service Provider Company: A step-by-step guide


If you have decided to set up a managed service company, you must have discovered how difficult it is to do so. This is because the managed service provider business differs from other business models like software, hardware, and other traditional service uses like a field, support, and professional service.

The world of managed services is evolving rapidly. However, similar operations remain like risk aversion, TCO (total cost of ownership), acceleration of adoption of next-gen tech, etc. As a result, there has been a considerable focus on offer standardization, client governance optimization, automation and scalability of delivery, and sales specialization. However, where should you start?

Let’s begin.

● Have a Strategy

Before starting an MSP company, having a well-laid out plan or strategy is of utmost importance. Although venturing into this business with the right strategy might seem challenging, anyone determined can do it. The easiest way to go about strategizing is to understand what is a managed service provider and what they need to achieve in the short and long term.

Instead, it would be best if you had a detailed document strategy that focuses on your effort and how you would evangelize your activities. It has to be detailed in every aspect of the managed service business like delivery, marketing, sales, offer, client management, supplier or sourcing management, finance, etc.

● Define your Organization’s Structure

Though it sounds easy, executing it might be incredibly challenging since you need to invest in the right skills and resources. Managed service provider organizational functions are just like other businesses; offer finance delivery marketing, sales, marketing, etc.

The insight and skills needed for these functions in MSP are dramatically different from those required for a  product business.

● Get a partner

It is pretty rare for a business or project to be successful without a little bit of help. To actualize your growth, you should have a reliable source of new products and value-added services that you can add to your portfolio of offerings. This is why you should not neglect a great partnership.

● State Your Offer

Your managed service business foundation is your offer. If you get it wrong, it can result in painful and slow growth. That is, if you do grow. Your offer should be market-focused, which would need you to step out of your comfort zone.

Your offer should be focused on eliminating or reducing your customers’ pain because of technology use. It could be financial or operational. If you focus on outcomes, then managed services are your first offer.

● Choose Your Software

MSPs usually rely on various software tools to help them in their job ranging from monitoring software and remote management to recovery and backup tools and helpdesk management platforms.

There are several tools in each category. Then, of course, you decide the specific solution to use. But it would be best if you stayed by evaluating several options and weighing the benefits and costs. The point is that you should adequately plan software selection. Don’t make use of the first tool you just found. It might not be the easiest to use or be the most cost-effective to use in the long run.

● Sales Specialization

It is quite different to sell managed devices instead of selling attached services or technology (Professional, Field, Support Services). Since your offer focuses on outcomes, your sales resource needs to understand the technology needing to be managed, the operations required to make the tech, and your customer’s financial operation.  

● Service Delivery

Selling managed services are different, and so is delivering managed services. Delivery is not just about your operations. It is about your customers’ operations. Your delivery model ensures the intended outcome of your offer is achieved.

Your delivery should be proactive, preventative, and predictive. Scalability, standardization, and automation are vital. Other functions do not have more impact on customer satisfaction and profit than delivery.

● Client Operations

When you keep your customer happy, they will become the gift that keeps on giving. Your company’s client operations team needs to be able to deal with how your customers feel. They need to focus on customer statistics, contract renewals, performance, and cross or upselling.

● Financial Operations

Your finance department could be your best friend or worst nightmare in a managed service provider company. Ensure that you have someone in the managed service department who understands the financial goals of your business.

Revenue recognition, revenue forecasting, operation investments, and ongoing resources need unique considerations. Unfortunately, many fast-growing growing companies have fallen due to poor financial governance approaches to their business.

That’s A Wrap

Starting a managed service provider company requires a lot of work, from setting a pricing strategy to marketing your business and beyond. But this problematic process is worth it since it would help you avoid problems in the long run by ensuring that your company is set to be successful from the start.