[Podcast] Is Your MSP Business Operating at Maximum Efficiency?

[Podcast] Is Your MSP Business Operating at Maximum Efficiency?

By Holly Wainwright

Is your MSP business structured for maximum profit? This Datto Partner Podcast discusses the importance of using metrics and benchmarking to ensure your MSP business is positioned to achieve its financial goals. Hear from managed services expert Paul Dippell, CEO, Service Leadership and podcast host Rob Rae, Datto VP of Business Development. Listen to the full podcast now.

What is the Service Leadership Index Benchmark?

The industry’s largest, on-going financial and operational benchmark.

Why is it important for MSPs and IT solutions providers to benchmark?

[To] assess their operational maturity in doing strategic planning, building a business plan. Sales management, service management, financial management and incentive comp and it allows that solution provider to assess themselves on all those factors, in great detail.

What is financial benchmarking and why is it important?

What’s great about financial benchmarking is it shows you what questions to ask. It shows you how you’re performing against companies with the same business model, in the top quartile of profit performance. Which usually equates to the top quartile of growth and service quality as well, then within the medium and the bottom quartile. Who unfortunately, in most of the solution provider business models are losing money right now. You can instantly gauge where are you across, depending on which service they were using of ours, either 17 or 55 financial metrics. Which is a lot, but it’s a power tool that you learn gradually.

Are there any immediate metrics MSPs can use?

A quick way to figure out if you’re somewhere near best in class profitability on services, is simply to take your service revenue for a given period of time, and divide it by the W2 payroll. Forget benefits, forget taxes for the moment, the W2 payroll of the service people delivering that, including the service manager. If you divide that service revenue by the service W2, you’re going to get a number. If your service W2 is the same as your service revenue, same number divided into the same number, it gives you a 1.0, you’re not making money on service.

Listen to the entire podcast. Rob actually leaks the name of the DattoCon16 keynote speaker (you’ll want a front row seat!). Please email any feedback, including ideas for future podcasts, to podcast@datto.com. Subscribe to the Datto Partner Podcast on iTunes.

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