When you’re first starting your managed service provider (MSP) business (or any business for that matter), there are so many things you have to think about. Apart from the work involved in getting an organization up and running, you’re likely spending hours thinking about how you’re going to define success.
Success means different things to different people, but it’s always valuable to have something to compare your progress against. This is where industry benchmarks can offer important and beneficial insights.
What are industry benchmarks?
These are facts and figures that are compiled based on businesses like your own. Industry benchmarks are used as a standard or reference point and also as a predictor for performance.
These figures and data points can be useful when setting goals for the year or determining which key performance indicators (KPIs) will be your point of focus.
It’s helpful to have guidelines to keep you on track and to know what to aim for, but be careful not to make direct comparisons between your business and a competitor if not necessary or relevant. For example, if you’re a 10-person operation, don’t expect your numbers to reflect those of an organization with 1,000 employees.
Looking at benchmarks month-to-month or year-to-year can help you gauge where you are and where you’d like to be.
How are benchmarks calculated?
Usually an accounting firm or an agency that specializes in surveys will collect information from a large pool of companies within your industry and they’ll analyze that data to find resulting patterns, trends, and averages. A lot of companies - like our partner, Kaseya - offer the results as a free resource for you to access.
What data is included in these benchmarks?
It varies according to the firm conducting the survey and the industry it is analyzing, but you’re likely to find commonalities across the board. Mostly all benchmark reports will include:
- The total number of employees in your company
- Total annual revenue
- Revenue growth year-over-year
- Operational costs
- Gross margins
When it comes to MSP-specific benchmarks, you’ll probably want to look at these figures as well:
- Your customer size
- Total number of endpoints you manage
- Devices you manage
- Pricing strategy and model
- Monthly recurring revenue
- Services offered
Use this data thoughtfully and carefully to set your business up as a respected competitor in your industry. You should be making data-driven decisions that move you towards growth and success. Perhaps industry benchmarks reveal that you’re offering your services at above-average prices. Driving down the costs of your services can help you bring in more customers and, ultimately, more revenue.
Contact us at BrightGauge if you’re ready to learn more about how your business can benefit from using our data-driven insights.
Free MSA Template
Whether you’re planning your first managed services agreement, or you’re ready to overhaul your existing version, we've got you covered!
Grab your copy
