Are you interested in increasing your revenue stream and growing your business without a large investment in time and resources?
Many MSPs are committing significant resources in time, money, and management into expansion. Now more than ever, margins for MSPs are being squeezed and are cutting into the profits needed to reinvest in growth. Traditional avenues for growing an MSP’s revenue stream are becoming increasingly more difficult to explore.
But what if there was another way?
You can grow your business by offering services that compliment your core suite of solutions. Let’s evaluate what steps to take to strategically add a new service to your line card.
1. Identify the right service to offer.
When deciding about what services to add, you should evaluate your market needs and look into where analysts are forecasting growth.
For example, IDC forecasts that by the end of 2018, over 70% of the Global 500 will be expanding their internal development teams 2-3x. This forecast attributes the expansion to the migration of company networks into the cloud. IDC further elaborates that the forecast is being driven by the business understanding that digital experiences are increasing a company’s effectiveness when engaging with their customers. From banks to retailers to traditional business-to-business industries such as suppliers of construction materials, companies of all types are transforming the buyer’s journey into a digital path.
Because businesses are clamoring to innovate and increase their agility to establish a better online experience for their customers, they need a software development partner who can help them with the following:
• Migrate to a Software as a Service (SaaS) model
• Develop Application Programming Interface (API) services
• Integrate with other third-party partner APIs
These three needs represent the necessary prerequisites for any company looking to have their business leverage the cloud as a strategy play. Your company, positioned at the front-lines between a business and the cloud, has the unique opportunity to help your customers drive the solutions they need to reach their cloud-based goals.
2. Find the right partner.
Now that you’ve determined that software development services will help you effectively fulfil a customer’s need, it is time to select the right partner. This can be tricky because not every vendor is alike and many will oversell their capabilities. If you are really unlucky, you could align your company with a software development firm that over promises and under delivers, essentially damaging your brand.
We’re guessing you do not need that drama, and we couldn’t agree more. Instead, find a software development partner that has the expertise, business-savvy, and an understanding about the vertical markets you sell into. Such a partner is polished, conscientious, and will help you set the right expectations for your customers. Their cost structure is realistic, their approach is holistic, and their timelines are managed effectively. The right software development partner will manage your customers’ expectations properly and make you look good in the process.
3. Decide on the right cost structure.
Once you have found that right partner, you can begin creating a cost structure that is both profitable for your organization and for your contracted software development partner. To help you decide, consider the following questions:
• What is the scope of the project?
• How long with the project take?
• Is the project complex?
• What are the technical requirements?
For each project you sell to your customers, have your software development partner create a proposal outlining the scope of work. Once the work and cost structure are agreed upon, make sure there is a signed contract before the work begins.
And don’t forget to drill down on the details. Establish how you want your partner to interact with your customers because it is ultimately your name on the door.
With these three steps, you can leverage the network you have built to drive new revenue, which is both cost effective and low risk when done right. By adding software development services to your line card, you can expand your revenue stream and fuel growth for your business.