1001 Reasons Not to Be an MSP
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and have an 8 month old
whatever. I'd be bored if I had a normal job -
Accounts receivable runs your life. Customers often don't pay on time or at all. You spend a huge amount of time chasing down deliquent and dead beat clients. You want to cut them loose but they represent a huge amount of your revenue and if you don't have them you don't have enough work. You often get stuck doing work for people who rarely pay, sometimes not for six months or a year, and you can't do work for other clients that may or may not pay because you are trying to service the one that you have - stuck with the bird half in the hand since you have no way to know if the next client is going to pay. You end up losing a fortune of your projected revenue because you never manage to collect it, you have to send it out to collections and give up 90% of it or you have to wait so long on it that it has lost 20% of its value, if you are lucky.
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I'm not an MSP, but I'll add one:
"You can't sell"
I had a guy who left to set up on his own. He was brilliant. Really clever, really experienced and cheap. The kind of guy every SMB would benefit from employing. His business failed very quickly because he couldn't sell himself. He couldn't sell himself to new clients. He only got gigs with people that already knew him, and that wasn't a big enough pool to sustain him.
Ultimately, this is the reason I've never set up my own business. I'd need a partner who could sell, but I've never managed to find the right person at the right time, so it's never happened.
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@scottalanmiller this is not, nor has it ever (for me) been the case. I've had two clients who ended up being super slow to pay. Both were restaurant groups and after the first project went slowly, I halted work until payment was received. They payed on time from then on out.
And I think most collection agencies cost 15-20% around here.
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@Carnival-Boy see I'm in the opposite boat. I need a nerd. I would much rather run the business, snag clients, Bill, collect, etc. but unless someone wants to work for free, gotta hold off.
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@hubtechagain said:
@Carnival-Boy see I'm in the opposite boat. I need a nerd. I would much rather run the business, snag clients, Bill, collect, etc. but unless someone wants to work for free, gotta hold off.
LOL work for free. In this instance, you're the entrepreneur, you're the one who gets to work for free
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@hubtechagain said:
@Carnival-Boy see I'm in the opposite boat. I need a nerd. I would much rather run the business, snag clients, Bill, collect, etc. but unless someone wants to work for free, gotta hold off.
All that business BS is what drove me insane. I despise all of that shit. I fix things, I'm not a business dick.
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@Carnival-Boy said:
I'm not an MSP, but I'll add one:
"You can't sell"
I had a guy who left to set up on his own. He was brilliant. Really clever, really experienced and cheap. The kind of guy every SMB would benefit from employing. His business failed very quickly because he couldn't sell himself. He couldn't sell himself to new clients. He only got gigs with people that already knew him, and that wasn't a big enough pool to sustain him.
Ultimately, this is the reason I've never set up my own business. I'd need a partner who could sell, but I've never managed to find the right person at the right time, so it's never happened.
The skills that make someone a good tech and the skills that make someone a good salesperson rarely overlap. For those where they do, they generally make a fortune as a pre-sales engineer for a massive company (MS, Oracle, EMC, etc.) where they can sell "so much stuff" that an MSP can't possible earn that much doing MSP stuff.
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hrm, maybe i need to look into that scott..
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@hubtechagain said:
hrm, maybe i need to look into that scott..
LOL. Its true, though, very hard to earn as much, reliably, running a company on your own when you could be getting salary, benefits and commission from a large company that has more ability to leverage you.
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Most everyone with that specific skill set goes into something like SAM mentions, pre-sales engineering or other position that puts you in front of enterprise customers where you can influence enormous sales in the high six and seven figure ranges.
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A lot of that comes from the leveraging of the engineering and product teams, the existing revenue and the marketing to make you more effective in that role that you can be with your own MSP. There is just little means to get your own MSP large enough to fully leverage someone who is able to work in that capacity. If the customer doesn't already know who you are, you are spending your time doing the education and marketing where you are not effective instead of the tech and sales where you are.
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The overhead of tech management is often unseen, unappreciated and miscalculated.
The cost of a tech working somewhere is much higher than the tech's salary. People often forget this.
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@Reid-Cooper said:
The overhead of tech management is often unseen, unappreciated and miscalculated.
The cost of a tech working somewhere is much higher than the tech's salary. People often forget this.
I think a lot of people don't realize this for every position. They don't realize that on top of what you make, the employer pays about 60-64% extra in taxes, insurance, etc.
Going along with a thread we had a while back, that's why $15 an hour for fast food employees won't work because it's not just $15 an hour, it's more like $25.
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Slow Paying Customers! When I consulted, I had a client who owed me a trivial amount ($400ish), They payed it over 4 months and 3 checks. After that I know longer did work for them anymore...
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@scottalanmiller said:
The skills that make someone a good tech and the skills that make someone a good salesperson rarely overlap. For those where they do, they generally make a fortune as a pre-sales engineer for a massive company (MS, Oracle, EMC, etc.) where they can sell "so much stuff" that an MSP can't possible earn that much doing MSP stuff.
Well apparently I have found my next career path
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@MattSpeller yeah, i could probly swing it as well.
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@hubtechagain I'm still fighting to make as much in IT as I did selling used luxury cars - it's sad.
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@brianlittlejohn said:
Slow Paying Customers! When I consulted, I had a client who owed me a trivial amount ($400ish), They payed it over 4 months and 3 checks. After that I know longer did work for them anymore...
I agree this could be a problem. Especially if you are the MSP. However, before a project of any scale is started, I would ensure that payment details are agreed up on so there are no surprises.
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I've never really had a problem collecting from clients. I run on net 30, and my first meeting with a client (well the meeting where they choose me as their ITSP we go over mutual expectations. communication, payments, etc.
