A Checklist for a Managed Service Provider

By Gaidar Magdanurov | 30 June 2023

After my previous post about starting an MSP business, a few people asked for a checklist that a new service provider could use to determine whether they have all the necessary elements covered.

1. Business plan

  • Identify your target market — location, industries, types of companies, and size.
  • Define the services you want to offer.
  • Research the competition and assess the demand for MSP services in your chosen market and the prices you can charge.
  • Define pricing for the managed services (for example, per user, per device, per incident, per extra time spent).
  • Build a model showing how many contracts and at what value you need to win to make the business sustainable.

Many service providers use multi-tier pricing options, offering different service levels like Silver, Gold and Platinum. Therefore, the model can include estimates of the number of contracts of each type.

The business plan should be reasonably documented, regularly reviewed, and updated, as life will correct the assumptions. The document is also an excellent way to onboard partners and employees and explain who the customers are, what the offerings are and how they are packaged.

2. Service catalog

  • Define your service offerings. For example, remote monitoring and management of endpoints, telephony, helpdesk, cybersecurity, data backup and recovery, cloud services, and IT infrastructure consulting.
  • Estimate the cost of offering the services and capacity based on the number of users or endpoints you can manage to validate the business model — as the model may imply the ability to support more customers than the actual capacity with the current team size.
  • Define preferred tools and vendors.
  • Document processes for deploying and maintaining services.
  • Establish service level agreements (SLAs), providing enough buffer for responses and issue resolution, given that workload can peak during certain times (for instance, significant customer sales events and the release of Windows updates).

3. Legal Structure and Registration

  • Decide on the legal structure (for example, sole proprietorship, partnership, LLC, or corporation).
  • Register it with the appropriate government authorities.
  • Obtain necessary licenses and permits.
  • Ensure compliance with relevant regulations.

4. Insurance

  • Obtain appropriate insurance coverage:
  • General liability insurance
  • Professional liability
  • Property insurance
  • Cyber insurance
  • Consider the option of reselling cyber insurance to your customers.
  • Investigate how your insurance will handle cases like ransomware attacks on the customer infrastructure or major outages of cloud-based services that lead to significant business losses for the customers.

5. Technical expertise

  • Obtain relevant industry certifications (for example, CompTIA A+, Network+, Security+, MCSA) — the credentials are important for marketing to customers and improving your team’s skillset.
  • Obtain vendor training and certification (for example, Acronis and ConnectWise).

6. IT infrastructure and tools

  • Acquire necessary hardware.
  • Acquire software tools to deliver your services (for example, RMM, PSA, backup, DR, antivirus, EDR).
  • Implement security policies — it is essential to include guidance for handling customer information and protecting the privacy of customers and employees.
  • Implement maintenance policies to prevent outages of your infrastructure.

7. Relationships with distribution

  • Find preferred software and hardware distributors. You may find better deals for projects that include hardware and software packages.
  • Enroll in distributor communications—do not miss opportunities to save on acquiring or renewing software and hardware for yourself and your customers.
  • Enroll in training activities offered by distributors—quite often, distributors provide opportunities to learn products and services that can be valuable for customer recruitment or improving your team’s skills.

8. Customer service

  • Set up email and messaging accounts.
  • Set up a phone system and call tree for incoming customer calls.
  • Set up auto-response for after-hour support.
  • Document procedures for customer service and building relationships.
  • Train your team to solicit referrals and positive reviews.
  • Define metrics to measure the quality of the service to be able to early detect and respond to decreasing levels of service (for example, time to first response, time to resolution, the time between responses, the share of cases resolved on the first contact)

9. Online presence

  • Create a professional brand identity (e.g., logo, website style, marketing materials).
  • Build a messaging document to highlight your unique selling points and emphasize your expertise, reliability, and customer service. Use it for all of the materials produced about your MSP.
  • Publish a website.
  • Publish credentials and case studies.
  • Create social media accounts.
  • Build a regular practice of reviewing social media, searching for reviews of your business, and responding to complaints and praise.

Many MSPs prefer to outsource all or some marketing services to an external agency or a part-time consultant; however, it may be too expensive or unnecessary at the earlier stages of an MSP. In any case, the owner of the MSP needs to stay closely involved with marketing, as they know their business and customers better. Not to mention that marketing activities can be costly and, if uncontrolled, can quickly destroy margins.

10. Marketing

  • Set up online advertising.
  • Consider offline marketing channels (direct mail, newspaper ads) — find opportunities for local promotions.
  • Join local business communities, get information about your business posted there and attend their events.
  • Consider hosting online webinars or offline events for small business owners on relevant topics (for example, best practices of IT infrastructure for dental clinics or how to avoid being ransomed for data).
  • Proactively ask customers to refer prospects.

11. Business development

  • Build a network of partners to deliver services you are not offering.
  • Build a network of referral partners and businesses, exchange leads and services.
  • Join industry associations.
  • Attend professional and SMB conferences.
  • Participate in local business networking events to build your professional network.

12. Customer relationships

  • Implement a CRM solution. Don’t rely on notes or Excel spreadsheets—they will quickly become obsolete. In the modern world, customer competition starts with knowing customers well and following up with them on time.
  • Define data needs (for example, what you need to know about your customers and prospects).
  • Build profiles of customers and prospects in CRM — the more relevant data you have, the easier the conversations with them will go. The data in your CRM will also help you build and offer new services and spot growing customer needs you are not addressing now.
  • Track the history of interactions and contracts.
  • If the business plan includes hiring sales, implement a reward program for new customer acquisition.

This checklist may look like a handful. Do not be scared. If you sit down and write down what you do in your current job and which projects you run, you will discover many things you are doing. Also, all of it looks like it is a lot of fun!