The business plan. Do those words cause you to squirm a little? Don’t worry…you’re not alone. But according to managed service provider (MSP) expert Gary Pica, business planning and your comfort zone can peacefully co-exist.
In Gary’s new series 5 Qualities of a World-Class MSP strategic planning heads the list of must-haves.
From ‘I’m too busy’ to ‘My company is too small for a written plan,’ Gary has learned the top excuses for not having a business plan are actually the best reasons for having one.
The business planning process is the leading indicator of success. And it’s more than having a business plan. It’s having a process with which implement that plan and achieve results.
As Founder and CEO of TruMethods, an MSP training company, Gary offers proven steps for creating a business plan that helps promote team accountability.
Below are the steps to create an actionable business plan for a Managed Service Provider (MSP):
Step 1: Analyze Current and Past Results
- Review revenue by category, including recurring, non-recurring, and product
- Look at gross margins by revenue category
- Check sales results, including additions of new MRR (monthly recurring revenue)
- Know your client churn rate
Step 2: Review Resources – What You Have vs. What You Need
Step 3: Building the Basic Plan
Prepare for some soul-searching. Define your purpose—why you do what you do—as well as core values that guide the ‘how’ of your business. Then establish a 10-year net worth goal.
Using a 3-year time frame, determine your company structure and sales goals in relation to your vision. Set priorities and check profit margins to make sure they’re in line with goals.
With targets in place, develop a 1-year plan for sales goals and priorities that are aligned with your vision.
Quarterly Action Plan
It’s time for implementation—the most important part of a business plan and also where the most mistakes are made. Think about quarterly goals in terms of sales, revenue, and new clients. Create a to-do list to move toward your goals. But also make a ‘to-don’t’ list, so that resources are not stretched too thin.
Once you learn how to focus on the most important action items every quarter, dramatic business success will follow.
Gary suggests you’re on your way to being a world-class MSP when you can answer ‘yes’ to these questions:
- Do you have a current business plan that includes a target and vision?
- Do you have a quarterly action plan?
- Is every team member accountable for results?
- Do you schedule one day per quarter for strategic planning?
Coming next, Gary shares what a successful MSP needs to know about packaging and pricing.
Learn more from one of the industry’s most respected thought leaders.