Risky Business might be a fun bit of ‘80s theater nostalgia, but when it comes to your MSP business, it should be risk management and growth all the way! Keep your business ahead of the pack when you lower costs and increase profits through auditing and automation to streamline processes and create efficiencies. Your growth opportunities are real: as IT becomes more complicated and harder to manage, MSP businesses continue to become more attractive to SMBs. That’s for a good reason, as research trends show that enterprises embracing MSPs have experienced a 42% savings in IT budgeting. Position your business for growth with our tips on how to lower costs and increase profits!
Six Best-Practice Audits You Need to Lower Costs and Increase Profits
1. Review your true cost for providing service to clients
Take a look at your service contracts and evaluate how much clients truly cost by focusing on:
- Number of service tickets
- Total technician hours spent resolving issues
- Travel time and related downtime
- Overtime and on-call rates
Collecting this data should be fairly straightforward, especially if you are using automated software that provides visibility into all aspects of your business. Once you have your data, add the costs and compare the total cost to what you were paid for the service. Make sure your contracted rates are set above your costs to ensure ROI!
2. Consider a tiered pricing model
If your analysis shows you’re losing money on contracts, reevaluate your pricing structure. Are you underestimating the time it takes to provide certain services? Different levels of service require different resource investments for your company, so explore pricing accordingly.
Some customers are willing to pay a premium in exchange for faster, guaranteed response and resolution times. Others’ needs are met with your standard service level agreements. Strive to create the perfect product/customer fit so your customers will have a strong reason to stay; encourage them to add services if a new service or package is a better fit. If you have built a strong relationship with your customer, they will appreciate your recommendations to improve their business model.
You need customers to stay in business, but you also need to generate profits to stay healthy and grow. Consider the very real possibility that you will need to walk away from customers who cost you more than they bring in.
3. Audit your current business processes and consider automation
Take the time to look deeply at your business processes. Consider:
- How efficient is each department?
- How much opportunity is there for human error?
- How can you maximize output?
- Are your processes in line with your business plan?
- Do your processes allow you to focus on the customer?
- Have you implemented automated software to streamline efficiencies?
Consider automating your billing process to reduce the incidence of human error and shorten the time it takes to receive payment.
4. Bill for every minute
You determined your contracted rates, now it’s time to make sure you are billing properly. Make it easy for employees to track all the time they spend servicing your customers. A mobile app can make it simple to capture time in the field.
Doing more with less is a great way to cut costs and increase profits. If you‘re still on the fence about workflow automation and how it can help maximize your resources, download our workflow automation eBook to help you sort through the important things you should consider!
Remember, time = money! How you utilize your resources has a direct impact on your bottom line. Download our utilization and time tracking eBook to help you get the most out of your workforce, and especially your technicians, in order to reduce costs and increase utilization.
5. Audit vendor pricing
Are your vendors giving you the best pricing? Can they do better, or should you be looking at alternatives? Did you know that Tigerpaw PSA software has a price book built in that will allow you to compare price, availability, and shipping across vendors to help ensure you are spending your money wisely?
6. Investigate time management
Discover how efficiently your team is utilizing their time. Are they happy? Are they productive? Do they contribute to your bottom line? Could they contribute more? A happy, productive workforce benefits from business improvements which supports growth and continuity for your business!
With increasing needs and massive growth, opportunities abound for your MSP business if you leverage your workforce and your time correctly. Automation and auditing will bring you a long way in understanding how to reduce and lower costs while simultaneously increasing profits and revenue.
Tigerpaw has been helping elite MSPs automate and grow their businesses for more than 30 years!
If you are serious about growing your managed services business, TigerPaw has advice from those who are winning the game today, to help you tomorrow!