4 Strategies for Making the Break from Break/Fix to MSP

September 2, 2015 | By Comodo

Are you thinking about leaving your “break-fix” business model behind? The latest cloud-based management tools such as offered for free on the Comodo One platform, offers IT services companies the opportunity to transition into a managed services provider that can earn steady, recurring for years to come.

Comodo MSP

Follow these four strategies and you’ll be well on your way:

1. Fund Your Transition: Making the transition from break-fix to managed services can mess with your cash flow. Make sure you have enough funds on hand to get through the process. Either stockpile enough capital to cover at least three months of expenses. Or obtain a line-of-credit dedicated exclusively to easing you through the transition. Whether you fund the change internally or through financing, don’t be surprised, however, if you find yourself relying on this capital for up to a year before you establish a sufficient revenue stream with your new MSP model.

2. Price Your Services Right: As an MSP, you have to know your profit margins per customer and per seat. In addition, you need a good handle on your internal processes. Otherwise, it is too easy to lose money and not realize it. Track each client’s profitability each month and switch up the pricing model for the ones that are losing you money. Also review which service offerings you want to include. If you build a lot of value into the monthly fee with a Big Bang that includes remote monitoring and management, antivirus, security, mobile devices, etc., don’t be afraid to charge for it.

3. Review Your Vendors: Make sure your vendor payment terms fit your new monthly subscription service model. With hardware-as-a-service, you may need to reconsider whether you finance them internally or not. Using a third party leasing company may fit better with cash flow generated on a recurring managed services basis. Using freeware versus expensive IT management tools can help you ease the transition as well. The Comodo One platform offers free RMM, patch management and service desk with the easy to add Comodo Device Manager that can be trialed for 30 days free.

4. Be Selective: Moving away from break-fix to managed services means that you need a lot more customers paying you on a recurring basis to gain profitability. But if you pick up the wrong ones, they can end up costing you instead. Clients with out-dated systems or environments that require few user controls can plague you with repeated problems. Sometimes it’s just a matter of preventative care; users need an hour or two in training sessions so they stop repeating mistakes. Other clients may have deeper trouble that can end up costing you in the long run.

Facts and Stats:

 

    • To transition from break-fix to MSP, make sure you have enough capital for to cover 3 months of expenses  

 

    • When determining your managed services pricing, consider profit margins per customer, per seat and the costs of your internal processes. 

 

    • Freeware MSP tools such as those offered on the Comodo One platform can ease cash flow during the transition from break-fix to managed services 

 

    • Stay away from clients who won’t or can’t invest in their IT systems. They will cost you too much money over the long term. 

 

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