By Charles Weaver
It sounds like a problem of the 1% MSPs. In reality, aggressive growth within the MSP market (this theory is true for any market though) can have very real consequences and can happen with a larger percentage of MSPs today than you may think.
Private equity interest in the MSP market has caused a sudden influx of capital to flow into the managed services profession, prompting a wide range of business impacts, most of them good. But there are some unintended consequences of such a large amount of money entering a profession, including growth which outpaces internal capacity to expand.
When investment capital suddenly rushes into any organization, there is often an implied (if not explicit) mandate to spend the money. No investor wants to see their money sitting idly in a checking account. So, once a funding round or liquidity event has taken place, the new investors often encourage growth to take place.
Now, to be perfectly clear, there is nothing wrong with this expectation of growth from investment. Whether we are taking organic growth or mergers and acquisitions, growth is healthy in the MSP profession. I should clarify that manageable growth is healthy. Unmanageable growth is chaos.
I detest lists, but I have created a short list of key areas where you may want to examine your MSP growth and make sure it is manageable. This applies both to investors and to MSP owners/operators alike.
The Plan
Have a plan when you are going about the business of pushing accelerated growth within an MSP business. Whether you are a business owner, an investor, or MSP operator, you must have a plan for whatever type of growth you are attempting.
Regardless of your growth plan, you should contemplate unintended consequences of any significant growth period. What does that mean? Depending on where your starting point is, you may have business elements you have never contemplated before which must be developed before you can achieve true and scalable growth. These business elements may be human resources, accounting, middle management, sales, service delivery, or other investments which must be made in the company before growth can be achieved. Anticipating these elements before you begin can help you save time, money, and prevent unexpected delays in the execution of your strategy.
Remember, before you go out and accept money, have a plan for how you will spend it. Doing this simple thing will make your life a lot easier later on.
