7 Tips for MSP Business Success | Fox & Crow Group

MSP Business Success is Hard

MSP Business Success means something different to everyone. A day one MSP might have completely different goals than the owner of a 10M MSP looking to exit. The basic principles of business success are universal, and understanding them will help you grow your MSP - to 1M or to 100M.

Publisher: Fox & Crow Group Last Updated: December 15, 2025

Executive Summary

Business ownership is hard. Achieving MSP business success is really hard. This post is the response I typically share when someone asks, “How do I start an MSP?” in MSP communities. It’s not an all-inclusive guide — it’s a practical list of what you should think through before you go all-in.

Definition: MSP business success means building a managed services provider that is profitable, operationally documented, resilient to owner dependency, and capable of long-term growth or exit.

Questions This Post Answers

How do I start an MSP?
Why is MSP business success so hard?
What should I prioritize first as a new MSP owner?
What are the most common causes of MSP failure?
What financial and operational targets matter early on?
How do process, discovery, and pricing affect growth and exit?

Ian Richardson Knows the MSP Industry

I often respond to the question "How Do I Start an MSP?" when it's posted in MSP forums on Discord and Reddit with this post.

While it is not an inclusive guide, it's a comprehensive list of things anyone would should consider prior to starting a business.

Business ownership is hard.

Achieving MSP Business Success is REALLY hard.

I’ve started, operated and owned 4 businesses.

One was my I.T. managed services provider company, which I started when I was 21 years old, back in 2005.

That business started as a part-time gig on the nights and weekends. I did "break/fix" support for college professors, doctors, and a few small businesses. It was a true "side-hustle" as I worked at a local community college to pay for night school.

It grew to a multi-million, award-winning Managed Services Provider over the years. I sold it in 2021.

The second company was a commercial real-estate holding company.

A common tax play is to sweep funds from an operating company (The IT business) via rent. You end up with a better tax situation via "rental" income on the federal side.

NOTE: I am not a CPA - talk to one before you try this.

I sold that company's holdings in 2022.

The third is Richardson & Richardson, which I owned with my wife and business partner. You might know her – Carrie is a force of nature in the IT Channel.

Most of the problems our clients wanted solved related to sales, which is how Fox and Crow Group came to be.

As mentioned I sold my MSP and RE companies. I also assisted Carrie as a CEO for hire through the sale of her telemarketing agency.That company, Managed Sales Pros, sold in 2022 as well.

I’ve bought a couple of businesses as well.

In 2017, Doberman (My old IT Shop), purchased a distressed, sub $1M ARR two-person IT shop. In 2022, Carrie and I purchased a small distressed marketing firm.

Throughout those experiences, I’ve made enough mistakes to retire off of.

I have 7 tips for MSP business success that have proven useful time and again, and wanted to share them here.

Process

Across all my endeavors, lack of process was far and away the number one issue. It becomes a problem when you try to offload functions to other people.

Hiring that first tech will be painful if you don't document how to work tickets and talk to customers. Likewise if you try to outsource lead generation to a provider it'll fail without process.

Documenting the key business functions is a critical first step. If you need something done a certain way – make a procedure.

Extra benefit around this – it’s easier to hold yourself accountable if you write down what you are going to do.

Minimum viable MSP process (what to document first)

Ticket handling: intake, triage, escalation, client communication, closure.
Onboarding: how you bring a new client into standards (users, endpoints, access, backups, security baselines).
Offboarding: how you remove access and document transition (so you don’t get burned later).
Sales-to-service handoff: what gets promised, what gets delivered, and how you prevent “surprise work.”
Billing & collections: invoicing cadence, payment terms, and who owns the follow-up.

Finance

Cash is king. I don't say that tongue in cheek either. Understanding your three key reports (P&L, Balance Sheet, and Cashflow) is critical.

Get an understanding of what levers you can pull to impact key parts of your reports. Things like Margin, EBITDA, COGS, and Expenses need tight management.

Take a "profit-first" mentality – you can't grow your way to profitability. You must have a profitable model from your first dollar.

Most MSPs are "boot-strapped" – you're not taking outside funding to grow the business. You want that profit building from "day one" to build your war chest as well as an insurance policy.

You cannot predict when you will need to sell your company. Circumstances outside of your control can force your hand – it’s better to have your house in order. Profit helps "everyday" situations like client loss or employee turnover be manageable.

Manage your debt load and equity to improve valuation.

Financial discipline that keeps MSPs alive

Know your unit economics: what it costs you to deliver one seat, one endpoint, one user, one site.
Watch service gross margin: if delivery labor and tool sprawl creep, you’ll “feel busy” while going broke.
Keep books clean: accurate categorization + consistent close cadence makes decisions easier (and exits smoother).
Protect cash flow: clear payment terms, clear scope, and no free “forever projects.”

Sales

MSP sales are complex in nature. When you sell an intangible like I.T. services, people are wary. You can't touch or taste or see "good I.T." – you have to experience it over time.

Figure out your sales process that you will use for new opportunities
Recognize that handling an existing customer will be different than a new logo. It's always easier to "sell again" than to sell the first deal
Consider land & expand plays – it's easier to sell a $5,000 assessment and I.T. roadmap versus a $72K/year, 3-year I.T. contract. When someone buys a small engagement first, you can use that engagement to build trust. That trust leads to future sales

One key lesson: Discovery is the most important part of the equation. Selling I.T. is gap analysis and psychology – master those and you're doing better than 90% of the competition.

What “good discovery” actually does

Connects technical gaps to business risk (downtime, ransomware exposure, compliance, reputation).
Shows you’re not selling tools — you’re reducing uncertainty and creating stability.
Gives you the right to price like a professional instead of competing with “the cheapest guy.”

If you want help applying this to your MSP: my calendar is available here.

Marketing

Marketing is all about consistency and luck. By doing the right actions consistently, you create your own luck. Make a simple strategy that you can execute against every week.

I can't stress enough dedicating time to brand awareness for your company. Syndicated marketing isn't helping you - it's driving traffic to third party sites and making you look the same as everyone else.

"Better than nothing" marketing is actually worse than nothing.

You have to pass the "smell test" for companies who are considering a change.

People who are hiring an MSP don't understand most of the concepts you're going to present. They're either:

I.T. directors at mid-sized companies who are protective of their jobs and turf
Small business owners who don't understand technology at all
Managers of SMBs who juggle 15 balls at a time and need I.T. to work

Create profiles on each of these buyers and learn how to speak to them about what is important to them.

Structuring your marketing around themes can make it easier for you to create content consistently.

Consistency wins (what to do weekly)

Publish one useful insight tied to a buyer problem (risk, downtime, vendor sprawl, compliance, budgeting).
Keep your positioning consistent: who you help, what you solve, and why you’re credible.
Make it easy for someone to validate you (case studies, clear services, clear process, clear contact path).

Strategy

Start with perspective & reflection.

Why do you want to have an MSP?

A list of those reasons, and why they're important to you as a human is a good place to sit for a while.

What's the reason your company should exist? That's a mission statement
Why does that mission matter to your customers? That's the beginning of your value proposition
Why does your service matter to your customer's customers? That's a wedge topic during multi-bid scenarios
Why should I listen to you versus someone else? That's differentiation
How will we build a team that supports our strategy? That's culture.

Figure out your vision and company culture.

Why would someone want to join your team?

Where are you going, and what impact will achieving it have?

If you're going to make an investment in your MSP, strategy should be your first consideration.

A simple strategy check

If you can’t explain your focus in one sentence, your marketing will be messy.
If you don’t know what you won’t do, your delivery will sprawl.
If everything is custom, your margins will suffer.

Runway

When it comes to living, it's easier to start a business when you're healthy financially.

This most recent go-around I had 2 years of living expenses in the bank. I seeded my company with 6 figures of operating capital.

Why?

‍I realized I wasn't going to be making money for a while.

I have a complex sales cycle as well, and a brand-new sales process. A long sales cycle with a lot of "misses" are going to be the norm for me.

That's what happens to MSPs as well – you'll have a lot of missed at-bats until you get dialed in. Removing the financial pressure of "I need to pay my bills" makes that easier to cope with.

Runway reduces bad decisions

Runway prevents panic discounting.
Runway keeps you from taking nightmare clients just to pay rent.
Runway gives you time to build real process instead of duct tape.

Pricing

Last, but not least: Pricing models are bloody well difficult.

Determine what you need to charge to provide the services you want to provide - profitably. Don't worry about what your competitors are charging.

Aim for a service gross margin (SGM) of 55–60%, with a basement of 45% during your cash flow building phase.

Anything less, and you’ll lose your shirt, along with your house.

Pricing that supports an exit (even if you never sell)

Clear packaging makes delivery predictable.
Predictable delivery protects margins.
Protected margins create optionality (hiring, tooling, growth, and valuation).

Final Thoughts on Achieving Success in Your MSP

I hope this article provides value.

There's no "silver bullet" on any of these.

What works for one MSP might not work for you. Talk to your peers, listen to experts, consume knowledge. But take it all with a grain or two of salt.

Anyone who preaches they know "the way" is selling you something. MSP business success takes years of building and iterating – it won't happen overnight.

If you're looking for help – my calendar is available here

If you found value in this article – I have a newsletter where I share my thoughts. You can sign up here.

FAQS - MSP Business Success

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What’s the biggest mistake MSPs make when trying to grow?

The biggest mistake MSPs make when trying to grow is trying to scale without documented processes. If you can’t hand off support tickets, sales follow-up, onboarding tasks, or billing without chaos, growth will magnify your problems instead of your profits.

What should I focus on first when starting an MSP?

Start with process and finance. Write down how work gets done, and learn your P&L, balance sheet, and cash flow. Most MSPs are bootstrapped — cash discipline is survival.

How long does it take to build a successful MSP?

Years. There’s no shortcut. It’s a long cycle of building, iterating, fixing mistakes, and staying consistent long enough for compounding to kick in.

How important is profitability in the early stages of an MSP?

Profitability is critical. You can’t “grow your way” to profitability. Profit from day one gives you flexibility, builds your war chest, and protects you when a key client leaves or an unexpected expense hits.

Do I need to hire a salesperson right away?

Not necessarily. Most MSPs struggle because they outsource sales too early or hire reps without a defined process. Nail your own process first — then you’ll know what kind of help you actually need.

What’s the most important part of MSP sales?

Discovery. Selling I.T. is gap analysis and psychology. If you can’t run a great discovery, everything downstream gets harder — trust, pricing, and close rate.

What’s the first marketing action I should take as a new MSP?

Consistency. Focus on building trust with buyers who don’t understand tech. Speak to their problems, not your tools. Consistency beats complexity every time.

How much runway do I need to start an MSP?

Enough runway to remove panic decisions. Sales cycles are long and misses are normal. Personal and operating runway buys you time to learn, iterate, and build without desperation.

How should I price my services as a new MSP?

Aim for a service gross margin of 55–60%, with a basement of 45% during your cash flow building phase. Don’t underprice just to win deals — underpricing doesn’t create growth, it creates burnout.

Why do so many MSPs fail to exit successfully?

Many MSPs fail to exit successfully due to a lack of documentation, no clear financials, and over-reliance on the owner. Buyers want a system, not a hustle. Build your business like you plan to sell it — even if you never do.

Looking for some Inspiration?

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We interview successful MSP entrepreneurs on the WIN podcast regularly!

Here are some MSP business owners sharing their journeys:

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Mike Ita, Founder, ITCorps Mike Ita has built a thriving MSP business that supports only one vertical - veterinarians

Check out ITCorps website here.

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John Ahlberg, Founder, Waident John Ahlberg's Chicago-based MSP has a unique hiring process and incredible employee retention.

Check out Waident Technologies online here.

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Scott Cooley, Founder, Indevtech Scott Cooley built a thriving MSP in Hawaii - starting when he was just a teenager.

Check out Indevtech's website here!

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Dozens of MSP Owners share their journey on the WIN podcast - listen to them here.