Contents
Inflation is a tough one because you've got your customers who perceive all other prices are going up and they're going to have less, I think less tolerance.
Maybe they're going to feel like they have less spending power because other prices have gone up, which is going to impact our ability to sell. You have employees who are dealing with gas being more expensive. Everything's more expensive. So they have expectations of increasing salary. Can you increase your prices when people already feel stretched thin enough to cover the increasing expectations of your employees? It does make for a tricky equation.
Ann Westerheim
Founder and President, Ekaru
In almost every type of filter we applied to the survey data, Inflation was the #1 external concern for MSP success and growth in 2024.
Out of all respondents, 53.56% said it was their top concern. There was a sizable gap between the first and second place spots on the list. The second highest external factor MSPs were worried about was cybersecurity threats at only 35.58%.
Following in third place were National/Local economics, a factor closely tied to inflation.
Your finances are always going to be your number one, I would think, because they're what drive everything. The finances are what you have to make your decisions based off of because those are the cold hard facts, right?
If I don't have enough money to pay people, I can't keep people. So if I don't have enough customers I'm not going to have enough money. I'm not going to be able to make payroll. Our number one is always to make payroll. The rest of it's gravy after that.
It ties a little bit into employee retention and the concern there is the inability to keep employees or find employees because if you don't have that performance in place, you don't have a baseline. How do you know where people are at and what they're thinking and how you can better them or what challenges they face?
Carrie Green
SVP of Operations, Alt-Tech Inc.
In a tie for the top internal concern, both finances and performance measuring came in at 30.15% of respondents.
Following closely behind in third and fourth were the “inability to acquire or retain clients” and the “inability to hire or recruit new employees” at 27%.
When asked about services MSPs don’t currently offer but plan to in 2024, the #1 response was Compliance as a Service with 20.89%.
The data shows that MSPs are looking into a wide range of services, with none standing out strongly above the rest. Compliance was the top response at 20%, but the lowest response was network management with 12%.
Compliance with various industry and government regulations has become more important to MSPs, and its growth is looking to continue in 2024.
What we're seeing is businesses who might be well run, but didn't give thought to that kind of thing are now getting queries or pressure from investors or business partners or industry where compliance, either to a framework or just an expected set of standards or their requirements, are much more commonplace.
There is a lot of compliance in media, obviously in finance, obviously in medical. But all these industries in their own right are realizing that the fight against cybersecurity and criminals— It is important to them for their own reputation and profit at the end of the day.
So compliance starts coming in from all the people who own the risk.
James Ratcliff
Managing Director, Ratcliff IT
I think many small businesses don't yet take compliance seriously enough. But I think being able to put everything into visuals that are easy for the customer to understand there's a lot of benefit there.
You can more easily present where somebody's at. Probably a really big thing that most small businesses are lacking is documentation. They may do the right things, but they haven't documented, so technically they're not compliant. So some help there to put that together. I think that's useful.
Ann Westerheim
Founder and President, Ekaru
We've always considered it one of the three essential elements of IT.
I don't think you can run a business well without one. Planning, and no surprises, is one of our mantras. No one wants to say, “Oh, we've got to buy a new server tomorrow, it's a huge project because the last one just died.”
That philosophy of where are you going and how do we get the business plan and the IT plan aligned so that IT and security are not going to either affect your ability to succeed, they're not going to cause issues or wrinkles, or that actually it's going to be a huge expense for what the business needs to do.
I think, again, back to client success and the relationship with your clients, it should be, where are you going? How do we help you? That is strategic planning.
It's, do you know where you're going? How are you going to get there? And let's not overcomplicate it. Have a plan and have the bits of the plan make sense with milestones along the way. So we think it's absolutely integral, from investment and standardization, unless you're just going to do ad hoc and get in a mess.
That never works in the long term because it's expensive for everybody and frustrating. I think even businesses, not MSPs, like our clients, would lose staff if they didn't do things in a sensible way. So it's a hallmark of doing things well.
James Ratcliff
Managing Director, Ratcliff IT
There's a fine line between coming across as, “hey, buy this, buy that.” Versus presenting somebody a roadmap and here's where you ought to be for a business your size. Here's how you can get there. You don't have to do everything at once. And so I think that there are better ways of presenting what needs to happen.
Ann Westerheim
Founder and President, Ekaru
I would probably agree with those numbers [in the MSP Trends Report]. Nothing there really surprised me.
So we have a pretty set understanding of our plan for the next one year. The problem with us with long term planning is we've always smashed our goals at the window. Now we're more stabilized and we're able to look a little bit more into that future and know where we want to be and direct that way, but we have really focused the last year and moving into this year on operational efficiencies.
Carrie Green
SVP of Operations, Alt-Tech Inc.
MSP confidence is stronger than ever and, according to our MSP respondents, a big part of that confidence comes from solid planning.
Business planning is how MSPs go from a simple Break-Fix operation to a true Managed Service Provider. Even established MSPs have found great success in taking planning seriously both internally and externally with clients.
Of everyone who completed the survey, 88% have at least six months of strategic plans outlining their business plan. With 20% planning for multiple years in advance, long term planning is becoming more critical for growth.
Of course, MSPs may not stick to that same plan for years, but identifying goals and a direction for your company will go a long way to improve the decision making process.
Of those who said they were not confident in their MSP’s ability to grow in 2024, 30% said they had no strategic plan whatsoever. This can be a major factor in how MSPs run their business and plan for a future of growth. When you aren’t planning, you don’t know what's coming and will have a harder time adapting to new challenges as they arise.
ScalePad creates software that helps IT managed service providers work more effectively, both internally and with their clients. From wrangling hardware and software assets to monitoring vital backups and compliance frameworks, our platforms give MSPs the tools they need to succeed.