So, you’ve heard it a million times: “Recurring revenue is king.” But are you actually living by that rule? If your managed services revenue isn’t hitting at least 65% of your total income, you’re not playing the game right.
Don’t Fudge the Numbers – Build the Business
There’s a temptation to manipulate the numbers to make it look like you’re heavy on managed services by slashing product sales. Sure, you might bump up your percentages on paper, but any savvy buyer will see right through that trick. The truth is, you need to grow your managed services, not just make your product sales disappear.
To get there, invest in growing your services—whether that means ramping up sales, marketing efforts, or cross-selling to existing clients. Only after you’ve crossed that 65% managed revenue threshold should you look to pump up your T&M or product sales. And for the love of all things profitable, don’t forget to properly define your offerings in your MSA and service agreements. Clarity avoids disputes and keeps your revenue flowing smoothly.
Grow It the Right Way
The bottom line is simple: Grow your recurring revenue streams naturally. Stack up your services, get new clients, and stop focusing on short-term gains. You want to be a real MSP, right? Then act like one and build a business that’s built to last.