Hey Reader! What kind of profit margins are you generating on your MSP projects?​
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​Best in class is around 65% GM for project delivery. However, in many cases, MSPs break even or lose money on projects. This is a very serious problem. Losing a few hundred dollars on an agreement is not good, but it won't blow a hole in your company either. ​
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​ Project scope creep and never-ending projects can cost thousands or even tens of thousands of dollars!​
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​Here are a couple of tips to rein in your project costs.

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​ 1. Don't let your techs manage their own projects!

This is truly leaving the fox in charge of the hen house. Not because the techs do anything with ill intent, but humans have an incredible power to self rationalize what they do and don't do. Techs managing their own projects create big pockets of risk. You need checks and balances in every part of your business. Inspect what you expect.

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​ 2. Sell Fixed Fee Projects

Unless this is the first time you're doing a project, you should be selling on a fixed fee basis. Most of the projects we do in the MSP world tend to be very similar to other projects we do. Data migrations, network upgrades, and server cloud migrations. These are not one-off events for a busy MSP.​
​ Selling fixed fee projects allows you to improve your processes internally and increase the margin available on a project. Billing by the hour gives you no leverage. You endlessly trade dollars for hours, which is very difficult to scale and optimize. Selling fixed fee projects also allows you to bake in project management hours without the client questioning their value. Yes, project management is required on projects.

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Want more tips and tools?

If you want a turnkey system to improve your MSP project delivery, you want my MSP project management course. It's packed with resources and processes that will make life simpler for your techs, salespeople, and customers. Check it out here.

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