Break-Fix Services: 4 Reasons to Shift from Break-Fix to Managed Services
The IT service industry is a great place to be in right now – there’s no question about it. And when a business goes well, it might not seem like the right moment to shift to a different model. However, if your company spends most of its time on break-fix work, there are several reasons why a transition to managed services will be a wise move for you.
When you switch from break-fix to a maintenance-focused model, you are still technically fixing things that go wrong. The goal is to sign the clients to service contracts. Once they are signed, you’ll get paid for all the work that prevents equipment failure and downtime.
The beauty of this approach is that you get paid even if nothing goes wrong. You’ll also have better control of your budget by implementing the Monthly Reoccurring Revenue, or MRR, business model.
Here is a look at the top 4 reasons why you should consider transitioning to managed services.
There’s no doubt you got into information technology services out of a desire to help businesses solve their IT problems. However, the main motivation of your company is to maximize profit. Managed services are simply more profitable for your efforts.
When you focus on break-fix, you earn your profit by responding to tickets only. When something breaks, you fix it. With managed services, things are different. Your goal is to get to a point where your clients rarely send you tickets. You’ll have the freedom to be proactive and schedule regular check-ins.
The best part? It’s not that difficult to convince clients to switch to this approach when you point out how it benefits them.
Yes, there is a monthly cost and financial commitment in terms of the MSP fee for service. When they weigh that fee against the cost of fixing problems and the downtime they experience when something goes wrong, they can see the value of having you as their partner.
Predictable Revenue Stream
One of the most attractive benefits of offering managed services is the predictable revenue stream it provides. This approach moves most of the labor to the early part of the cycle. After that, you can plan for the amount of monthly maintenance needed on each of your client’s computers and servers.
That means, as your business matures, you can count on a consistent monthly income to manage your daily business. That’s called MRR – Monthly Reoccurring Revenue. The ability to calculate revenue gives you valuable insight into the future growth potential of your business.
Moreover, by establishing good relationships with your clients, they will come to view you as a trusted advisor. That is something you can leverage to offer additional services and products to the client.
Once you become a trusted business partner you’ll be in a good position to help manage vendors and recommend things like phone systems and building security. The sky’s the limit!
Greater Control Over the Client Environment
With managed services, it is easier to control the client’s environment. As a trusted advisor, you’ll have control over how the equipment gets configured. You can recommend software and network security platforms that you use with other clients. That makes it easier for you to ensure that everything meets your standards, and you can keep problems at bay more easily.
Managed services, by design, are structured to scale. The safety net of a predictable revenue stream enables you to make better business decisions to grow your company while keeping overhead to a minimum.
Break-fix operations do not expand easily. MSPs that are competitive in their market can achieve the kind of growth that gains their owner’s equity over time. Also, strong-performing MSPs can later be sold for a profit. That can make all of the hard work you’ve put into your business over the years even more worthwhile.
If you are ready to enjoy the many benefits of shifting to an MSP model, don’t miss our live Virtual Academy event May 19th & 20th. You’ll learn things that new and growing MSPs need to know to achieve all the things we’ve just discusses – and more! We’ll cover marketing, human resources, sales, and operations with sessions from leaders in the industry. Reserve your spot now!