Why Start a Managed IT Business? It’s a Wise Investment

Start an MSP business and tap into a massive billion-dollar industry

The decision to start a Managed IT business begins with one consideration: growth potential. According to Channel e2e, the market for managed services grew 12.5% in just five years, capping off phenomenal growth in 2019 to clock a staggering $194 billion worldwide. The biggest area of growth and market share: The United States.

Meanwhile, Managed IT businesses are filling an increasingly critical need as more companies move from centralized offices into hyper-local arrangements with employees working from home. While this shift has been in no small part due to the COVID-19 pandemic, the change nevertheless is placing strain on businesses of all sizes. This shift is driving further growth as businesses are seeing the benefits of work-from-home arrangements.

“Large tech providers are betting that demand for remote work and business continuity tools will continue after regional lockdowns are lifted, industry analysts say,” notes the Wall Street Journal. In other words, this is a new challenge for businesses large and small, and savvy entrepreneurs can position themselves to tap into multiple new revenue sources.

The local IT landscape

Consider for a moment the amount of technology it takes to run a business. There are computers and printers, of course. Those all have to talk to one another over networks. Then, there are software programs for everything from word processing and billing to computer security. Employees need a place to save work, and that means the “cloud.”

Putting it all together can be challenging for even the most tech-savvy business owner. That’s where managed IT businesses come into the picture. These businesses manage the various components a business has, providing maintenance, upgrading, and computer security services to their clients. Small business technology is evolving quickly and there are significant challenges for even a tech-savvy owner to overcome.

“Technology plays a central role in business, making it a key component of almost every company. Staying on top of your business’s IT game can be a real challenge, as the technological environment is always changing,” writes Forbes. “Overwhelmed with choices and a lack of expertise, many companies often overspend on IT without understanding which technology expenses are vital, a luxury or redundant.”

Small- and mid-sized businesses struggle to keep up with technology demands, Forbes says, and when faced with challenges, too often these businesses fail simply because they cannot keep up with technology demands. That’s where starting a managed IT business comes in.msp business

What is a MSP Business?

Managed IT, or Managed Service Providers, allow businesses to enjoy the benefits of a robust IT department without incurring millions in overhead. Businesses turn to MSPs to maintain computer equipment, assist with the purchase and installation of new computers, and provide networking support, among many services.

These are vital needs your managed IT business provides for your clients. After all, if the computers stop working, your clients are out of work until they’re fixed. That makes managed IT a necessary component of their success plan.

Through contracted services, business owners know they have someone they can call when technology quits working or they need to find new solutions to problems. Those contracts also give business owners peace of mind, knowing that their networks are secure, their data is preserved, and their customers will continue to be serviced.

What services do Managed IT businesses provide?

Small- and mid-sized businesses count on MSPs to provide a host of technology services across a wide variety of business areas. Here are just a few of the kinds of service you can expect to deliver to clients of your managed IT business:

  • Remote Monitoring and Management
  • Data backup and recovery
  • Computer and technology purchasing
  • Hardware installation
  • Software installation
  • Hardware and software maintenance
  • Email management
  • Troubleshooting
  • Network maintenance

Consider how much time and money a business owner could lose if just a single one of these items went untended. A broken email system could mean thousands in missed sales. Failing to find the best price on new computers could more than double the cost of new machines. In the worst cases, a crashed hard drive could mean thousands in data recovery fees just to rebuild decades’ worth of sales.

This brief list highlights just how important a good relationship with a managed IT provider can be to small and medium-sized businesses. Combine these concerns with the transforming nature of business in a post-COVID world and it’s clear just how big the potential is for long-term, sustainable business growth.

Starting an MSP business puts you in a growth market

A recent report from Spice Works points to a huge growth in IT spending in 2020 and beyond. According to Spice Works, more than 44% of businesses plan to increase IT spending. A further quarter of businesses are increasing spending specifically because of a security incident or threats of security breaches.

“As the business technology market nears $4 trillion in annual spend, there will be increasing opportunities for technology vendors and service providers to grow their businesses, and for technology buyers to innovate and upgrade their infrastructure, software, and services,” Spice Works writes.

No matter how you look at it, opening a managed IT business is a wise investment. Proceed with caution, though, because the threshold for entry into the MSP industry can be challenging.msp business

Starting a Managed IT business puts you in a growth market

A recent report from Spice Works points to a huge growth in IT spending in 2020 and beyond. According to Spice Works, more than 44% of businesses plan to increase IT spending. A further quarter of businesses are increasing spending specifically because of a security incident or threats of security breaches.

“As the business technology market nears $4 trillion in annual spend, there will be increasing opportunities for technology vendors and service providers to grow their businesses, and for technology buyers to innovate and upgrade their infrastructure, software, and services,” Spice Works writes.

No matter how you look at it, opening a managed IT business is a wise investment. Proceed with caution, though, because the threshold for entry into the MSP industry can be challenging.

Everything you need to start an MSP

To start a managed IT business, there are a few resources you’ll need. These resources go beyond screwdrivers and pliers—though MSP techs will definitely need these kinds of tools.

Among the many tools you’ll need are accounting software, ticket tracking systems, data recovery systems, and more. You’ll also need technicians who have the various certifications required to repair computers, deploy networks, and serve your clients. You’ll also need clients, and that means marketing and branding.

Perhaps most importantly, you’ll need access to knowledge bases and sales materials for hundreds of types of systems spanning dozens of industries and thousands of variables. If it seems a little overwhelming, that’s because it can be. However, as Thomas Jefferson put it, “With great risk comes great reward.”

Investing the time, effort, and resources needed to open a MSP business positions you for tremendous potential business growth for years, even decades, to come.

7 steps to starting a Managed IT business

The steps to starting a managed IT business are pretty straight forward. So long as you plan ahead and anticipate the next steps, you’ll be able to go from planning to open-for-business smoothly.

  • Create effective branding and marketing: What will you call your new venture? You’ll also need a logo that tells people what your new business is about. You’ll also need a web site and hosting, email, and phone number. Your new MSP business will need to stand out. But it will also have to demonstrate to potential clients you have the ability to execute technology strategies for yourself. Otherwise, they’ll keep looking.
  • Find office space: Believe it or not, proximity is one of the core factors many businesses look for when they’re searching for an MSP to take care of their tech needs. If your new managed IT business is in a strip mall in the suburbs, you may miss out on big contracts downtown. However, the reverse is also true. When critical systems crash, clients don’t want to wait hours for your tech to arrive. And you don’t want to pay hundreds of dollars in labor for employees to be stuck in traffic. Consider your market before you sign that lease.
  • Obtaining licenses and insurance: Businesses require occupational licenses, tax registration, and other government certifications before they can open. At the same time, your new managed IT business may need various kinds of insurance, from a general liability policy to workers’ compensation. Because licensing and insurance requirements vary by jurisdiction, it’s important that you investigate what the requirements are in your neck of the woods. Chambers of Commerce are great resources for making sure your business gets off on the right foot. Frequently, the local Chamber of Commerce will have dedicated staffers to help you through this part of the process.
  • Sourcing qualified staff: You can’t do all the work on your own. You’ll need qualified staff to do the work. That means finding information technology professionals with the experience and the certifications your clients will be looking for. Job boards such as Indeed and LinkedIn are valuable resources. Also, local economic development agencies frequently maintain job listings for area businesses. The most important advice is to make sure your employees are well-qualified IT professionals.
  • Engaging potential clients: This is where the fun begins for most MSP business owners. As the MSP owner, you’ll be engaged in the sales process from beginning to end, operating your business daily, and interfacing with the public. Chambers of Commerce and local business associations are great ways to interact with potential clients. Also, local Business-to-Business organizations are great ways to meet potential clients. Cold-calling potential clients is also a way to generate leads.
  • Launch your website: With your business ready to open, it’s time to launch your web site. Make sure it’s SEO’d (search-engine optimized) so potential clients can find your business when they search for you. Also, you’ll need to establish social media presences on all the major platforms—Facebook, Twitter, Instagram, and LinkedIn. With these pieces in place, people can connect with you to inquire about services.
  • Throw a Grand Opening: The business is ready to launch. Connect with the Chamber of Commerce, local governments, and local media. Then have a ribbon cutting. You’re open for business providing managed IT services to your clients!msp business

An easy and affordable way to start an MSP

Because of the complexities of starting an MSP business, finding qualified employees, developing brands, and more, many entrepreneurs opt instead for purchasing a managed IT franchise opportunity, such as TeamLogic IT. There are multiple benefits to following this path, including:

  • Ease of entry: TeamLogic IT franchise owners enjoy the benefits of an established brand, a vast network of knowledgeable, helpful franchisees, and a treasure trove of marketing materials to make your sales job easy.
  • Ease of operations: TeamLogic IT has been in the MSP industry a long time. We’ve worked out the business model so you don’t have to make it up as you go along. All of our processes and procedures are well-documented, so you start Day 1 with a turnkey business solution.
  • Ease of growth: With a recognizable, trusted name and an effective, well-structured business model to follow, you can focus your attention where it needs to be: on growing the business. We can even help you find the best employees for your organization.

Get started with TeamLogic IT franchise today

Getting started with an MSP business is easy. Request our free Franchise Information Report today. This report lays out all of the costs associated with opening your TeamLogic IT franchise and provides you with an overview of our franchise opportunity. Or, if you’re ready to get started, you can begin the process today by reaching out to one of our franchise consultants.

channele2e.com/faq/msp-market-size-forecast/

wsj.com/articles/for-many-remote-work-is-becoming-permanent-in-wake-of-coronavirus-11590100453/

forbes.com/sites/forbestechcouncil/2019/04/09/how-to-determine-if-managed-it-services-are-right-for-your-business/#4e7858744c28

spiceworks.com/marketing/state-of-it/report/

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