Should MSPs Bother with Microbusinesses?

Scott Calonico

Microbusinesses are a growing trend across the world. Tough economic times have caused many large businesses to lay off huge numbers of staff, and many of them have gone on to start small (one or two man) companies of their own.

If you own an MSP business, you may have wondered whether it is worth taking on these microbusinesses as clients.

Logic perhaps dictates that it’s better to concentrate on the “bigger fish,” and to an extent this is true – after all, a larger client means more work and more potential revenue. However, it’s perhaps unwise to discount the potential value of these small individual clients.

In this article, we present the simple advantages and disadvantages of providing services to microbusinesses, to help you make your own mind up as to whether they are a market worth targeting.

Advantages

1. Today’s microbusinesses could be tomorrow’s success stories. By becoming a trusted partner from the start you could find your potential revenue grows with their success.

2. Microbusinesses can prove very easy to support, especially if you build their IT systems around cloud services.

3. Microbusinesses don’t tend to be afflicted by power struggles and company politics. If you build a good relationship with the client, your day-to-day work with them should be relatively stress free.

4. Just because a business is very small, it doesn’t mean it can’t be successful and cash-rich. If you work with the right microbusinesses, the work can still prove lucrative.

5. Working with a collection of different microbusinesses is a healthy way to diversify your streams of revenue and spread your risk. If your business is built on two or three large clients, the loss of one can be devastating for your MSP’s income. 

Disadvantages

1. Some microbusinesses, especially in their early stages, run on a shoestring budget. These clients won’t want to spend much money, and will often expect the earth for it.

2. Looking after multiple tiny clients means maintaining a lot of documentation and keeping up to speed with lots of different IT systems.

3. Many fledgling businesses fail, and sometimes they may fail whilst owing money to their service providers.

4. Micro-entrepreneurs often invest a lot of time in their new businesses, working long hours and weekends – and if they are your clients they will probably expect to be able to get support from you during these times.

5. You will need several microbusiness clients to earn an equivalent amount of revenue as you would from a traditional SME.

It’s understandable that some MSPs “turn their noses up” at the tiny clients, but surveys show that the trend towards microbusiness shows no sign of abating. Someone’s got to support them – and it could prove lucrative for it to be you. It’s your call.