MSPs are a fantastic market that’s been developed over the years. No doubt the industry has helped keep small and medium sized businesses up to speed on various aspects and relevant in their own respective industries.
However, even though there is a growing demand for MSPs, they take a surprising amount of skill to operate them. For example, the main MSPs leading the charge are in IT. So would it be fair to say that the owner of that type of MSP be proficient in technology? Not exactly.
According to Michael Gerber author of The E-Myth Revisited: Why Most Small Business Don’t Work and What to Do About It, he reveals that a lot of these businesses fail due to the fact they’re run by those exact people. Yes, they have the technical skills, but they often lack the ins and outs of running a business.
Even with this fact though, many technicians are still trying their hand at making these businesses work. At the same time, many people are wondering who should be the owner of an MSP business?
Why Not Technicians?
Even though technicians aren’t the best option to start an MSP, chances are likely that that theme will persist from here on out. The reason is natural progression. With more and more people being their own boss, it makes sense that once a technician or an IT specialist has gotten some years working under someone, they branch off and start their own business.
An MSP seems easy since the new owner would have the skills to do the job.
But when you take closer looks at surviving MSPs and other factors, it starts to turn into a bad decision.
For one, IT is highly specialized and if you want to be competitive, it’s important you have technicians who can cover all of the fields. Furthermore, a technician should keep working on their own shortcomings through various resources.
This is further reinforced by the fact that over the past years MSPs have been growing, the pain points of even the top businesses in this industry haven’t changed much at all. According to Datto’s 2019 State of the MSP Report, these pain points are sales and marketing, work-life balance, and revenue growth.
Areas where someone who has a general understanding of the business world would be able to cover.
So for technicians to cover their bases, it’s ideal for them to be learning about those aspects. It’s essential that they take online or in-person business classes and be able to connect with business leaders in their area. This will only expand their business world mindset and know how to better interact with business owners, prospects, and customers.
All of these things though do raise another question: If technicians are learning about business and are able to cover up these shortcomings, wouldn’t it be better for a business-minded person to run an MSP? After all, they could easily hire technicians to help them along the way right?
Why Not Business-Minded People?
While there is obvious truth that an MSP owner should be thinking like a businessperson, it doesn’t always mean someone with business savvy can run it. In the end, MSPs will still demand technical skills in order for them to go smoothly.
This is also on top of an MSP owner having a grasp of technology and how it can be used to grow the business. Seeing as IT is the dominant MSP around, it’s important for business owners to know how all of this works.
When someone lacks that technical background, they have to rely on other people to solve client issues if they ever come up. That isn’t too hard since you can simply hire a good enough team that you can call upon whenever that happens.
But this technical background isn’t just applied to troubleshooting for customers. What if an MSP owner is attending a business gathering and has a chance to gain new clients? It would be helpful in those situations to answer basic technology questions in conversation. In those situations, if you relied solely on that business-mindset you’d know immediately that failure to even answer a simple question like that would be embarrassing and awkward.
Who Would Be The Best?
Looking over both of those scenarios, it’s clear that for businesses to thrive and grow, both sides of these are needed.
Technicians or workers in their specific industries will have the technical knowledge and know-how with regards to all kinds of things. They’ll be able to rely on their own hands-on experience and training to help customers with all kinds of things. The downside is they lack any business knowledge.
On the reverse, business-minded people know how to operate a business and make it lucrative. They know how to pitch to customers and make services appealing. The downside is they lack all of that hands-on experience and technical knowledge, requiring them to train and be knowledgable in that field to some extent.
Looking at it from this way the ideal owner in these situations would be the people who have a little bit of knowledge in both of those areas. That or one of the extreme ends is learning a little bit of the other side of that industry.
About MSP Corp
MSP Corp understands you’ve worked hard to build your business and you want to protect it. With a mission to be a world-class business partner for MSP owners across Canada, we actively seek to acquire and partner with owners looking to secure the value of the business they have built and provide a seamless exit process that ensures business continuity and employee and client stability.
Contact us today to learn more about selling your business and maximizing its value.