How Do You Grow a Niche MSP?

 

-Carrie Richardson, Fox & Crow Group (with insights from Mike Ita, CEO, ITCorps)

 

Building a niche-specific Managed Service Provider (MSP) business can be both rewarding and challenging. By focusing on a particular industry, MSPs can hone specialized skills and become invaluable to their clients. Mike Ita, founder and CEO of IT Corps, has done just that—developing his business around the veterinary industry. In a podcast interview, Mike shared valuable insights into the pros and cons of this business model.  On the WIN podcast, Mike shared strategies needed to grow a niche MSP, especially in today’s competitive landscape.

The Pros and Cons of Owning a Niche-Specific Managed IT Service Provider Business

“Generalists can charge what the market will bear.  Specialists can charge whatever they want.”

-Carrie Richardson, Fox and Crow Group

Listen to Mike Ita on The WIN Podcast

The WIN (What’s Important Now?) Podcast is hosted by Carrie and Ian Richardson, founders of Fox and Crow Group.  Every week (sometimes more, sometimes less) we interview an entrepreneur to find out how they’re winning in business.

The Benefits When You Grow a Niche MSP

There are many reasons why an MSP might choose to focus one one specific niche. Mike’s approach on how to grow a niche MSP focused on veterinarians was celebrated in Channel Pro magazine.

 

Here are some of the many benefits of choosing to service only one vertical:

• Industry Expertise
  By concentrating on a particular sector, MSPs can build a reputation for being experts in that field. Mike Ita’s journey into the veterinary space began almost by accident when a conversation with his local veterinary clinic turned into a business opportunity. He quickly realized that focusing on veterinary clients would allow him to become an expert in the unique IT needs of the industry. “One of my skills is being able to sit down and look at something and break it all down piece by piece… I could do this,” Mike said when discussing how he entered the veterinary industry.

• Stronger Client Relationships

When you serve a specific niche, your clients tend to view you as a partner rather than just a vendor. Mike found this to be the case when working with veterinarians, who were appreciative of his IT services and the personal attention he gave. “All they cared about was their stuff working,” Mike explained, noting that veterinarians valued reliability and efficiency. He even developed personal relationships with his clients, going above and beyond to provide unique touches like delivering donuts to their offices.

• Ability to Charge Premium Rates
  Specialization allows MSPs to charge more for their services, as they are providing tailored solutions that general IT service providers might not offer. As Mike put it, “Generalists can charge what the market will bear, but specialists can charge whatever they want.” The veterinary space, like the wedding industry, is used to paying top dollar for high-quality services, which means a niche MSP can command premium rates while delivering specific, valuable expertise.
• Referrals and Word of Mouth
  Specializing in a niche often leads to strong word-of-mouth referrals, which are crucial for business growth. “We got to the point where… they want me. A lot of the customers, they’re buying me,” Mike said, emphasizing how the personal relationships he built in the veterinary community led to a steady stream of referrals.

The Challenges of a Niche-Specific MSP

There are benefits to building a vertical focus in your MSP.  There are also some drawbacks.  Here are a few reasons you may want to consider diversifying your client base once you’ve got a solid foothold in your niche of choice.

• Limited Market Size
  While specializing allows for expertise and premium pricing, it also limits the pool of potential clients. Mike acknowledges that the veterinary industry isn’t limitless. “Private equity is impacting your business in a negative way,” Mike noted, pointing out that many practices are being bought by corporations, which often bring their own IT teams. This shrinking market can be a significant challenge for MSPs in specialized fields.
• Dependence on Industry Trends
  When an MSP ties its fortunes to a specific industry, it becomes vulnerable to shifts within that sector. As Mike shared, the move from on-premise servers to cloud-based systems in veterinary practices has changed the role of IT providers. “They’re moving into web-based products,” he explained, meaning MSPs need to adapt quickly to keep up.
• Scaling is Difficult
  While growing a niche MSP may seem like the next logical step, scaling can be tricky. “At one point, I had five employees… but they want me,” Mike said, highlighting that clients often expect personal service from him directly. As a result, expanding without losing the personal touch that clients value is a significant challenge.
• Risk of Saturation
  A niche-specific MSP may eventually hit a ceiling in its growth. Mike discusses how he has had to step out of certain veterinary conferences due to market saturation. “We got to the point where I was like, we’re getting a little bloated,” he explained. This means that niche MSPs must continuously find new ways to provide value and differentiate themselves.

Strategies to Grow a Niche MSP

Mike shares on the most important aspect of building a niche-specific business.  Know when to say no to clients that aren’t best-fit clients, and be okay with firing a client that no longer fits that “best-fit” profile.   The “best-fit”  profile can include only companies that treat your team with respect.  Bad clients lead to bad morale.

Here are more ways to successfully grow a niche MSP business:

• Find the Right Industry Events
  Mike’s entry into the veterinary space was solidified by attending the Midwest Veterinary Conference. After purchasing booth space and sponsoring the event, he gained significant exposure to his target audience. “We probably had 90 to 100 people in the room the whole day,” Mike shared, underscoring the importance of industry events for networking and business development.
• Leverage Your Network for Referrals
  Since word-of-mouth referrals are powerful in niche industries, it’s essential to nurture existing relationships. Mike regularly checks in with clients and goes the extra mile to keep them satisfied. “I make an effort to talk to the management on a regular basis,” he said. Consistent, personalized service can generate positive reviews and valuable referrals.
• Offer Value Beyond IT
  Niche clients often look for more than just technical expertise. By offering insights into business processes, regulatory compliance, or industry trends, MSPs can deepen their client relationships. Mike frequently speaks at veterinary conferences, sharing IT and security knowledge tailored to veterinary professionals. Becoming a trusted advisor on industry-specific topics solidifies client trust.
• Prepare for Industry Changes
  The shift toward cloud-based solutions is reshaping many industries, including veterinary practices. Mike highlighted the need to stay ahead of such trends: “For me, it’s still very similar if not identical… we prefer to be the third-party liaison.” Niche MSPs should stay informed about industry-specific technology developments and adjust their offerings accordingly.

Building a Sales Process to Grow a Niche MSP vs. a General Service Provider

Developing a sales process for a niche-specific MSP is fundamentally different from creating one for a general services provider. The focused nature of a niche business brings both unique challenges and distinct advantages that must be reflected in the sales approach.

Listen to Mike Ita Share His Experience on the WIN Podcast right here:

 

You can also listen to the WIN Podcast on any podcast platform.

Why Is It More Challenging to Grow a Niche MSP?

• Fewer Target Prospects
  One of the biggest challenges for niche-specific MSPs is the limited pool of prospects. In a general services model, there’s a wider array of potential clients from different industries, which means more opportunities to make mistakes and learn from them. However, niche-specific providers must get it right from the start because “fewer best-fit targets mean less room for mistakes.” Every lead matters, and nurturing them correctly becomes critical to success. If a prospect or client feels underserved, negative feedback at industry-specific events can spread quickly, causing significant harm to the brand.
• Higher Stakes for Client Relationships
  In niche industries, reputation is everything. With fewer potential clients and close-knit communities, word-of-mouth spreads rapidly. As Mike Ita pointed out, when things go wrong in a niche business, it can be difficult to salvage the relationship. “I tried to salvage the relationship, but it was too late,” he recalled, after an employee mishandled a client. This high-stakes environment means that every client interaction must be positive, and consistent follow-up is crucial. Unlike in broader markets, where losing one client may not be detrimental, a lost client in a niche can damage your reputation and affect future sales.

The Advantages of Trying to Grow A Niche MSP

• Focused Knowledge
  One of the clear benefits of a niche-specific MSP is the ability to focus all sales efforts on understanding one industry. You only need to learn the language, pain points, and operational needs of a single sector. This allows your sales team to become true experts. As Mike shared, veterinary clinics valued his understanding of their specific needs and were appreciative of the solutions tailored just for them. “All they cared about was their stuff working,” he explained. Mastery of a single industry creates confidence in your offerings, helping to close deals more effectively.
• Higher Profit Margins
  Once an MSP establishes a strong reputation in a niche, it can often charge premium rates compared to general service providers. “Specialists can charge whatever they want,” Carrie said, referring to the fact that niche MSPs often command higher fees than their competitors. When prospects know that your company is dedicated to solving problems specific to their industry, they’re willing to pay more for your expertise and assurance that their IT needs will be handled seamlessly.

Partner with Fox and Crow Group to Grow A Niche MSP

For MSPs aiming to grow within a niche, building the right sales process is crucial. Partnering with a company like Fox and Crow Group can provide the essential tools to develop and refine this process. With access to tested processes, supporting documentation,  a sales enablement platform, and a sales process management platform pre-built and customized for every part of the MSP sales process, Fox and Crow can help niche MSPs can scale their sales efforts – without relying on third party agencies for lists, leads, or sales appointments.

Launching soon, we’re excited to share Fox and Crow Group’s private LLM, trained using millions of MSP sales calls —can offer unique insights and help your team optimize lead nurturing, closing more deals faster and more efficiently.

For niche-specific MSPs, every prospect counts.  Your approach needs to be better – you’ll have fewer “at bats”, so your first impression needs to have a positive impact and your process needs to work.

Ensuring that your sales process is tailored to your industry will not only protect your reputation but also drive profitability as you establish yourself as the go-to expert in your field.  Schedule a call with Carrie here to talk about how we can help!