Planning a Successful Transition To An As-A-Service Business Model

| By:
Mark Sokol

It’s a little scary.  We understand.

You’ve determined that transitioning to as-a-service—otherwise known as managed services—is the right thing for your business. You may have been encouraged by our previous blog post highlighting the “why change?” advantages of this successful business model for building recurring revenue.

But getting started can seem overwhelming. Here are five proven steps to plan for a successful transition.

1.  Plan First

It’s easy to fall into the trap of being too busy or thinking your company is too small to develop a business plan. But a solid three-to-five-year plan will help turn your dreams into actionable and measureable goals for financial performance, sales effectiveness and service efficiency.

There’s no better time to create a new or refresh an old business plan than during a transition. When implementing managed services, for example, start by translating the monthly recurring revenue (MRR) you need into specific weekly, monthly, and quarterly sales goals. Then decide the actions you need to achieve those goals.

If writing a business plan seems too daunting or simply isn’t your expertise, there are numerous tools and organizations that can help.

2.  Move At a Steady Pace

The switch to managed services is too complicated to simply flip. Allow yourself to transition in stages over a period of at least three years. Decide how much of your income you’d like coming in from monthly recurring revenue in the first year and then put a plan in place to carefully increase that percentage each year. Set and monitor goals that are achievable, yet won’t leave you behind your competition.

3.  Balance Managed vs. Traditional

Understand how your ramp-up into this new business model will affect your cash flow. Choose which new deals and existing clients you’ll approach with managed services and which should remain traditional for the time being. Give clients a chance to “try out” new services.

4.  Slowly Build Your Bundle

As your business plan allows, introduce one or two new monthly services at a time, making sure they complement your current offerings, are easy to implement, and solve your customers’ current problems. The more touch points or solutions you’re able to effectively provide your clients, the most trusted and essential you become to them, which translates into long-term profitability. Look to the ModernOffice or Modern Retailer tools for more info.

5.  Tackle the Big Question

Will you decide to offer only managed services or would a mixed model be better? There will be a new level of strategic planning to do once your as-a-service model is providing a significant portion of your income. Think long-term as you consider how that decision will affect you now and in the future.

Check out our next blog about successfully managing cash flow during your as-a-service transition.