The road to a successful MSP is paved with mistakes—starting some things too late, and others too early. That’s why it’s critical to learn from MSPs who’ve been there before, so you can replicate their successes—and avoid their failures.
Will Snyder, co-founder of WTC Business Technology Services, an MSP on track to hit $5M, spills his best advice for MSPs looking to break the $1 million mark. Here’s what you need to know.
Don’t Skimp on Your List
If there’s one thing Snyder recommends to MSPs who are shooting for their first million, it’s to focus on marketing early on. “In hindsight, I know what I did wrong,” Snyder says. “I’d definitely do it differently [now].”
“There are lots of little things you can do at that entry level that don’t cost anything,” he explains. “It costs very little to have a decent website with basic SEO, create a newsletter, or send out tech tips. Those things don’t cost anything, yet they have a trickle effect on your prospects and clients. It keeps them more engaged.”
A critical component of a viable marketing pipeline is your list. “I can just imagine if I had started building a list when I was first starting out, to be able to follow up with people. We would have grown much faster and been much more successful sooner,” Snyder says.
Snyder’s list building strategy hinges on his MSP’s niche in the marketing distribution space. To get started, they joined user groups in their niche. “As soon as you start joining these organizations, [you’ll have access to] their lists of members,” he explains. “You can do it from membership or from your local chamber rotary. There’s always focus lists in whatever area you’re focusing on. Then it’s easy to pick up [the phone], start calling, and get results right away.”
Do Specialize to Gain Expertise
Niching down is a strategy many MSPs employ for good reason—it works. Not only are you able to build community and connections within a particular industry, but specializing allows you to gain expertise in that niche. The ability to understand your prospects’ needs, jargon, and frequently used software will have a major impact in building your credibility.
Snyder chose to specialize in the fastener industry for exactly these reasons. “This is something anybody can do when they pick their niche,” he says. “Learn that software, find out if there’s opportunities to be a preferred vendor for that software company, and just be really good at it.”
“We’re [our clients’] one-stop shop for IT,” Snyder says. “So even if [they] have a piece of software we don’t know, we’re going to learn it. Then if something comes up, we’ll call the vendor and work on [their behalf].”
At its heart, it’s about “relationship building,” says Snyder. “It’s about understanding what’s important to the [client] and how you can help them. Then they’ll see your value and start referring people to you.”
Gaining expertise in a particular niche also makes you more efficient. “It allows you to solve the clients’ problems faster,” Snyder says. “If you’re really good at [software that industry uses] and there’s a problem, you might be able to solve it without having to call [that vendor] because you understand it. The more you know about their environment and the software they use, the better. And once you learn it for one [client], it’s almost the same [for other clients] in that niche. You build [that expertise] over time, but having it [helps] you be confident in the sales cycle. Then you can say, ‘Yeah, we know your software. I have three other clients that use it.’”
“[Expertise] gives you a huge credibility boost,” Snyder says. “Prospects aren’t going to know how good you are technically upfront. But if you can build that credibility, it just elevates you right away. That’s the key.”
Related: From $500K to $6.4M: How IT for Education Found Its Vertical Niche and Scaled to Success
Do Scale Your Team While Scaling Your MSP
When building your team, it’s essential to hire people who can fill the gaps in your skill sets, says Snyder. “You hire to your weaknesses,” he says. “It’s not to say that your company can’t grow because you can’t do those things. It’s [evaluating] how many clients you need to get to have the money to hire someone to do that for me. That’s important for [your] business to grow.”
“That’s what gets you to the next step,” he explains. “If you’re stuck in the tech, you’re not going to make that jump. There’s a jump in mentality that has to happen there, to say, ‘I see there’s more. I might not be able to get me there, but I can find somebody who can, because I know how important it is.’”
This remains true as your MSP scales. “One thing I’ve realized now is that the people that get you to $1 million are not going to get you to 5. The people that got you to $5 million are not usually going to get you to 10,” Snyder says. As an example, his MSP previously didn’t need an account manager, because his team was able to handle it. But that’s no longer possible with 80 clients to manage.
“Hindsight is perfect, but we didn’t have a plan for the growth,” he says. “We didn’t [plan] what positions we were going to need and what the structure would look like as we grew. We just almost doubled in size and still had the same back end. So [it’s important to] be intentional about it, set a goal, and realize what positions will be needed at the next level. We’re on the road there, but if I had planned it out, we would have gotten there quicker and easier.”
Looking for More Expert Advice?
For more advice from an MSP on the road to $5M (and the strategies that got him there), tune into Snyder’s full episode on the My First Million podcast. In it, you’ll hear more about specializing and scaling, as well as Snyder’s marketing strategies and the value of peer groups.
