MSP COVID-19 support: How you can support clients and remain profitable
COVID-19 continues to create uncertainty around the world. Managed service providers (MSPs) are feeling overwhelmed with the long list of things they need to do to keep their business and their clients’ businesses running smoothly.
The world has changed in the blink of an eye, but there is good news. MSPs are in a unique position to be viewed as an essential part of their clients’ operations. You support so many other companies, keeping them afloat and secure when things are anything but business as usual. Now, more than ever, your clients are relying on you.
Let’s go over what you need to do to keep your business and your clients afloat during COVID-19.
Enable and manage a remote workforce
One of the biggest changes for MSPs and their clients has been the shift to remote work. State lockdowns and social distancing have forced businesses to transition to a remote workforce at the drop of a hat. As an MSP, you know this has put a strain on your team and operations.
A few of your clients may have been testing remote work out over the months or years before the pandemic. With everyone shifting all at once, you need to double down on your ability to support your clients and your own workforce from anywhere. And it looks like this worldwide work from home experiment may lead to a continued increase in more remote work in the future.
While your clients may be concerned about remote employees’ productivity, their biggest worry is security. You’ve worked hard to establish a secure perimeter around their companies with firewalls, antivirus software, and monitoring solutions, but end users are venturing into uncharted and unsecured territory. Working on personal devices and home networks opens up vulnerabilities cybercriminals are chomping at the bit to take advantage of. You need to step up and put your security expertise on full display.
From internal processes and remote security patching to security training and awareness, every security solution and practice needs to be deployed to ensure your business, your clients’ businesses, and their employees are working safely. We put together 18 ways to make sure remote workers are secure and can work without worry.
Maintain financial stability and manage cash flow
Some of your clients are lucky enough to continue operations with a remote workforce. Others have been forced to drastically reduce operations or shut down completely. This presents a different kind of challenge. One that keeps you up at night as an MSP owner. Your sources of revenue are drying up quickly, and you need to get a clear look into your finances and cash flow management. It’s even more worrisome as most small businesses only have about 27 days of cash reserves on hand to cover payroll and other expenses.
According to Invoicera, 68.9% of business owners fear they’ll lose their business due to a lack of available cash. 58.2% identify slow-paying clients as their biggest challenge in managing cash flow. There’s a good chance you’re a part of these statistics. You’re not alone in these fears, but it’s not the kind of company you want to keep.
While you won’t be able to completely plug the hole and stop cash from leaving your reserves, there are steps you can take to optimize your processes and manage your cash flow more effectively.
1. Optimize your billing process
Billing is one of the most time-consuming parts of owning an MSP. We’re sure you know that there are a lot of manual steps to make sure your bills are accurate and get out on time. Automation can take care of a lot of those steps. You can pull information from multiple vendors, have pricing and billable work populated across platforms, and quotes and invoices can be created in just a few clicks.
On the payment side, you can have your clients set up automatic payments to make it easy for them to pay you and ensure no payments are missed. This may be a tough sell for most of your clients that aren’t open, but it can help remove the payment roadblocks of your clients that are continuing to do business.
2. Use and understand KPIs
You should have already been tracking and utilizing key performance indicators (KPIs) across your MSP before the COVID-19 pandemic. If you haven’t, now’s the time. KPIs take you beyond the basics of running an MSP and gives you a picture of how your resources are being used, what clients are keeping you busy, and who are your biggest sources of revenue. With these numbers, you can start bringing balance to your cash flow management and make changes to ensure the financial health of your MSP.
There’s an elephant in the room around your revenue and cash flow: pricing. When you’re desperate to keep clients, it’s tempting to offer discounts or make drastic changes to the prices of your services. You may see short-term benefits, but you’ll only hurt yourself in the long term. It’s not advisable. You run the risk of discounting so much that you end up spending more in resources than what you’re charging. Your clients will get used to the lower prices and will not be receptive to price increases. As you would before the economic downturn, focus your conversations around the value of your services and what you bring to your client’s business.
Optimize operational efficiency to do more with less
Much like using KPIs, finding areas to optimize across your MSP should have been something you were either doing or starting to do before the pandemic. Being able to reduce inefficiencies, manual work, and miscommunication are vital for any profitable and well-run MSP. Again, like KPIs, this is more important now than ever before.
A great way to optimize your operational efficiency is to look at the tools and solutions you are using across your business. Are they working for you or against you? Are you putting more time into using them than you’re getting benefits from them? As you become more reliant on your software and automation, how you use them will determine the kind of return on investment you’ll get. After all, if you use a tool wrong as soon as you implement it, you’re not going to get full advantage of its functionality.
However, your tools are just half the equation. How are you actually managing your MSP? What benchmarks are you comparing your operations to? When you know what to look at and what to reach for, you’ll be able to take your MSP and your operations to the next level. ConnectWise’s Arlin Sorensen, VP of Brand and Ecosystem Evangelism, and Brad Schow, VP of Consulting, sat down to discuss what managing what good looks like on your MSP’s business maturity journey.
Focus on customer retention and relationships
Not to sound like a broken record, but everything you should be doing now to withstand these uncertain times are things that will continue to be important after the economy stabilizes. Building and maintaining strong customer relationships is no different.
Your clients are taking a hard, long look at their expenses and are making cuts to save as much money as possible. Anything that doesn’t help their business or bring value to their operations is on the chopping block. If you consistently communicate with your clients, have a healthy relationship with them, and can demonstrate the value of your services, your MSP could make the cut.
On the other end, you need to keep an eye on your customer retention, or how many of your clients stay over time. Knowing this number, along with customer churn, will give you a glimpse into why some clients stay vs why others leave. Important factors include a poor onboarding experience and, no surprise, a weak customer relationship.
It’s not just your clients you can impress during these times. While some industries are struggling to adapt to the new normal, others are thriving. If your MSP provides service to one of those vertical markets, now’s a chance for you to double down and show other companies your business has what it takes to keep them operating no matter what the world throws at them.
These are just a few things you need to keep an eye on to put your MSP in a position to outlast and survive the COVID-19 pandemic and economic crisis. Download The MSP COVID-19 Playbook for even more information and guidance to protect your business and your recurring revenue.