Happy New Year!
I have a massive challenge for you in 2023.
The good news is it doesn't involve buying an air fryer or pretending you're going to start doing sit-ups.
Don't take on any work in your MSP this year unless it drives Monthly Recurring Revenue.
Yes, that's right - any projects that don't drive MRR are out the window this year.
Why? Because we all know as business owners that lack of cash is the biggest thing standing in our way to reaching our goals. We have salaries to cover, overheads to meet, suppliers to pay etc etc before we can really take our business where we want to go.
So, of course what every MSP needs is a fail safe way of putting more money in the bank without spending a fortune in the process.
This is where MRR comes in, and it's why it needs to be your focus in 2023.
Just imagine for a second if you could cover all of your bills from Monthly Recurring Revenue. We're talking staff, we're talking your office, we're talking utilities, we're talking everything you pay to all those vendors out there.
Wouldn't it be cool if at the start of every month, there's money to pay for all those things, and your income as well?
Now, if you've read this far, you might be thinking; 'Of course, Paul, that all sounds great, but where do I get this magical MRR from?'.
Well, there's actually something you can implement for your MSP straight away that will provide you with more MRR from your existing clients.
And it will take you an hour tops to complete.
Say hello to the profit matrix for MSPs (no, it's got nothing to do with Neo and Trinity).
This tool has the potential to add thousands of extra profit to your business each and every month.
Your profit matrix is a simple visual device that shows you exactly which clients are buying what... and therefore which clients are yet to buy additional services.
Yes, this info is in your PSA. But it's much more powerful when you gather it together and present it differently.
It may sound a little complicated, but trust me when I say this will take you less than an hour to complete.
Open an Excel spreadsheet and along the top list everything you sell. A different MRR service in each column (more on how to figure out what you should be selling later).
Then, down the side list all of your clients; one client to a row.
So far, so simple.
All you need to do now is go along each client and fill in each cell where they already buy that MRR service from you.
When you’ve done this for every client, you’ve successfully identified your extra profit potential. It's sat there in the blank cells, where the clients aren't buying the service.
Well done you. Here's what it might look like:
To make the biggest impact, I’d also suggest putting this up on a whiteboard somewhere everyone can see it.
It’ll always be there as a reminder for your technicians, who will be able to see at a glance where there are opportunities to sell something else when speaking to a client (if you want to find out how to get your sales-adverse techs doing genuine upselling, I have a full guide on MRR and how to tackle this here).
This is what your offline profit matrix might look like:
Another great thing about the profit matrix is that it can show you if you’re not offering enough products or services to generate extra Monthly Recurring Revenue.
Remember, creating MRR doesn't involve hard-selling, so don't be scared by that.
It's about telling your clients what's available, and educating them why they should buy it. Some will buy it, some won't. That's OK.
And how do you find out what extra services you should be selling to existing clients?
The simple answer is- you ask them!
This is where a 'strategic IT review' comes in (also known as a Quarterly Business Review. I renamed it as I think quarterly is overkill for most MSPs and clients). You can head to my Ultimate Guide to getting more MRR from existing clients to find out how this works.
I promise you, ditching one-off projects that fill an immediate cash flow hole in 2023 will unlock a whole heap of MRR revenue streams, which will make your 2024 New Year's celebration the best yet.
Email me and let me know how drawing up your profit matrix goes, or for general MSP marketing advice, anytime at email@example.com .
You can also join 1,900+ other MSPs in my MSP Marketing Facebook group today for some fellow MSP-owner motivation.