MSP Sector Specialist Startup
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Be wary of taking out loans to get going. It's a solid plan but takes on risks that make success even harder. It can help you to be successful, but it can also hasten a demise. Basically it just ups the ante.
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I did not have any clients lined up. After I left my previous employer I had to fight a Non-Compete that would have essentially required me to move out of the Southeast US. Post legalities, many of my previous clients came a running to me because my replacement wasn't up to snuff for them.
As far as pricing structure.....it's tough to have a super rigid structure when you start up because well....you just want revenue initially. There is usually a provisional month of hourly billing to learn a new client, get all of their pain points out of the way, and get in the groove of their business, then I offer a managed package. managed package (depending on the client) could be x/workstation and x/server if it's a pretty "simple" environment. If there are a bunch of specialized applications that are "needy", you up the price accordingly. Managed Contracts are important, the cover what is in and out of scope. for my managed clients, if there is out of scope work, it's billed at a discounted hourly rate.
Loans aren't a bad thing, if anything it's a motivation. But it seems like you're willing to give away a lot of your revenue up front to outsource, that's not my cup o tea
Perhaps a line of credit is more your style, that way you're not paying for anything you're not using. Without having some sort of collateral up front, a LOC would be a tough sell to a bank.On an aside, what is your current position?
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Essentially I am a glorified server/network administrator as I look after everything (internally). My job title is Systems Administrator but I wouldn't consider myself in that bracket. Previous to this, I became the backbone for a one-man-band IT company and Cloud Service provider who decided after hiring me he didn't need to do anything. So I ran his show for 2 years making him a shed load of cash while I did the graft. A lot of pain, but a lot of experience, so alls well that ends well.
I am only keen to farm out work while I am still in employment, to curb the necessity for borrowing. If I can keep employment while bringing in clients that are supported elsewhere it gives a small user base to get things right before jumping ship.@scottalanmiller You've certainly peaked my interest with the outsourcing option. I'd definitely be interested in discussing that further. Do you have UK based technical specialists available should I need it for technologies out of my personal portfolio?
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Yes we do have a few people based in the UK. I would be happy to discuss details with you anytime. We also have customers over that way that we need extra hands for from time to time.
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@Hubtech I like the concept of your provisional month of hourly billing to get to know a client. This sounds a great idea to prevent under quoting for time-hungry customers!
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The first 60-90 days is really getting to know the customer never flat rate yourself too quickly with anyone. It can really bite you in the butt either because you under quoted on your end or over quoted on theirs. A client who doesn't "see" your value and are paying too much will get cranky and leave. However there is no making some customers happy either.
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@Robin5170 said:
Essentially I am a glorified server/network administrator as I look after everything (internally). My job title is Systems Administrator but I wouldn't consider myself in that bracket. Previous to this, I became the backbone for a one-man-band IT company and Cloud Service provider who decided after hiring me he didn't need to do anything. So I ran his show for 2 years making him a shed load of cash while I did the graft. A lot of pain, but a lot of experience, so alls well that ends well.
I am only keen to farm out work while I am still in employment, to curb the necessity for borrowing. If I can keep employment while bringing in clients that are supported elsewhere it gives a small user base to get things right before jumping ship.@scottalanmiller You've certainly peaked my interest with the outsourcing option. I'd definitely be interested in discussing that further. Do you have UK based technical specialists available should I need it for technologies out of my personal portfolio?
Yup. Some people in the UK and more in the US.
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Do you guys find you get much work through your site or is that more of a formality than anything else?
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Thanks @Minion-Queen Really good advice, I'll definitely take that approach.
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@Robin5170 said:
Do you guys find you get much work through your site or is that more of a formality than anything else?
Formality. You need one so that people know you are real. But no one hires you through the web site.
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Actually most people go there and are surprised at all we do as they were heading there looking for one thing. So it is helpful just not our main draw of customers.
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@Minion-Queen said:
Actually most people go there and are surprised at all we do as they were heading there looking for one thing. So it is helpful just not our main draw of customers.
What would you say is your main draw of customers? Word of mouth? Or through the forums? It sounds like you get (or used to) a lot of work through building relationships on SW which I enjoy frequenting.
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@scottalanmiller Good to know thanks.
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@Robin5170 said:
The biggest thing I have noticed current general MSPs providing manufacturers is that they are not aware or do not understand the impact and therefore priority of different areas of a factory/site.
That's interesting. What kind of things do you mean?
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Do you plan to have ERP partners or work specifically with special software focused on manufacturing?
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@Carnival-Boy Using anecdotal experience, there is often an area of divide between office and factory/shop floor support. An office PC goes down and there are clearly defined SLAs, processes and procedures to cover it. This is less well defined on kit/systems on the shop floor. Due to the individual nature of manufacturer environments there is less one size fits all process diagrams to lay on top of the infrastructure, and what could be seen to be a minor issue to an IT tech could be costing the customer big money. If not identified early, then the delay is money down the drain for your customer, however if these are already defined by detailed analysis of your customer's setup and real-world impact on a number of scenarios across the business, priorities can be determined by the customer rather than by IT. This seems obvious, but simply due to the lack of experience outside from the office environment I think some MSPs struggle (I'm not by any stretch saying this is across the board).
At the end of the day, the name of the game is avoiding under the gun learning curves, by already planning DR type strategies as is already the norm with everyday IT infrastructure. Due to the many thousands of systems/vendors involved manufacturing, a lot of the time this will be simply vendor relationship and escalation management. Again, it's obvious, but is mis-managed frequently (I have found).
@scottalanmiller Initially not but something I would look at down the line if applicable. Depending on the industry I would assume (naughty) there is a spectrum of specific software designed with a type of manufacturer with their different requirement in mind eg food vs parts vs complete products etc. In this instance I wouldn't want to box myself in, but it's not something I have enough exposure to make a decision on yet. -
Don't necessarily have to box yourself in, but can be aligned with a major player or two that focus on your market.
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I think @NetworkNerd has some insight into manufacturing ERP systems here in the US.
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Very true and good advice @scottalanmiller , thanks
@Reid-Cooper thanks for the prompt. Lets see if @networknerd has any info to share! -
@Robin5170 said:
Very true and good advice @scottalanmiller , thanks
@Reid-Cooper thanks for the prompt. Lets see if @networknerd has any info to share!It seems I have been summoned. I certainly cannot turn that one down. I can tell you where we work the ERP system is what drives us. If it goes down we cannot ship parts, do financial transactions, etc. We use Epicor and have been for years. I am pretty excited about seeing the upgrade from 9 to 10 through to its finish later this year as there will be many new features to utilize and lots of performance boosts integrated just by the fact that everything is .NET.
I'll agree with you about the prioritization in Manufacturing. Production is king because they make the money. If we cannot make parts and transact with the ERP system, we are in some trouble. That is money out the door. We are big on the Theory of Constraints where I work, and every couple of weeks they let us know what area is the constraint. That way we know if they have an IT issue out there that is halting production in some way, we stop and take care of it (treated as almost code red / server down). You could almost say some of the kiosks in the shop are like servers - they go down and all of the sudden we cannot ship product. So yes, it is very important to have a DR plan for these areas or a spare station out there people can use to make it less of an emergency / keeping a spare machine that is setup and ready to go if computer X fails. We specifically keep at least 1-2 spare refurb desktops and laptops to make sure we have something to work with in a pinch to get things moving.
I have also found that some of the software you will find in Manufacturing companies is so niche and custom it can be very difficult to resinstall somewhere else. I have been asking that any new Engineering software be put on a VM and not a physical box to help minimize the DR impact if a computer out in the shops dies.
