Three Ways to Ensure MSP Business Growth

Ensuring solid MSP business growth is not always easy. Should you focus on your top line (gross sales, revenue, turnover) or bottom line (net profit, earnings, results) performance or both? Maintaining focus on growing your revenues and your profit is not an easy task. However, it is possible. Here are some tips on how to boost your MSP business’ growth.

Your business, of course, is unique in terms of sales, but it is just as easy to measure and as difficult to grow as any other MSP business.

You probably have technical, sales, and administrative resources.

During the next couple of months, we will inspire you how, in a few easy steps, you can make a dramatic impact on your business.

MSP Business Growth through Top-line Performance

Today we’ll focus on Sales Metrics and top-line performance (that is, growing your revenue).

In your business, you’re most likely able to grow your revenues in three ways:

  1. Increase the number of customers (clients).
  2. Increase the average transaction value (typically this would consist of hw/sw/cloud services and technical help where you invoice by the hour).
  3. Increase the frequency of repurchases, that is, get more residual value out of each customer.

Let’s say you want to increase your sales (top line) by 30 percent, which sounds like a high number. Traditionally, many MSP’s have focused only on acquiring more customers or clients and hence 30 percent is a VERY high number. You can break it down, however, using this simple model.

The Math behind 30% MSP Business Growth

MSP business growth is more than just adding more clientsIn order to grow your business with an increase in sales of 33 percent as in the above example, you only need to 1) get 2.5 new billable clients each month, a 10-percent increase; 2) increase your average invoice by $125 (another 10-percent increase) through another piece of hw/sw, some consultancy work, or the addition of a new recurring cloud-based solution; and 3) increase the number of purchases your clients make each month from 1.5 to 1.65, also an increase of 10 percent.

I’m not saying or implying this is an easy task. However, it is much more digestible and definitely less cumbersome to grow in all three areas than focusing solely on growing your client base 30 percent. The end result is the same: a 33-percent increase in sales.

By implementing the steps listed above, you’d be able to grow your business from $47,000 to $62,000 per month, or a staggering $180,000 per year. Taking it to the extreme, you could possibly grow your sales 150 percent by focusing massively on getting more clients (33-percent more), increasing average sales 25 percent, and growing the number of purchases made per month 50 percent from 1.5 to 2.25.

Happy hunting!

If you have any comments or suggestions, please do not hesitate to reach out.

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