When IT Nation Evolve peer groups met in person for Q1 meetings in February, nobody could have predicted how different our Q2 meetings would be. Still, ConnectWise and the IT Nation team pivoted well, and set us up to meet virtually for peer group meetings. No question that the collective knowledge, experience, and perspectives from both MSPs and vendors serving the community, makes this group one of the most valuable sources of information for us and our Solution Provider customers.
GreatAmerica makes a lot of claims about how we help Managed Service Providers grow their business and improve their profitability. Among the claims, there is one that we are often challenged on – and I’d like to address it: “How does GreatAmerica impact growth in managed services when those services aren’t financed?”
It’s no secret that monthly recurring revenue, or MRR, is the wave of the future and is expanding across multiple industries. All you have to do is take a look at some of the most ingenious As-A-Service models of 2018 to see how true this is. After all, monthly recurring revenue is a predictable and reliable source of income that you accrue when you sell your products, services and more on a monthly payment plan. There are a variety of methods to achieve it, including subscriptions, leases and Hardware as a Service contracts, but the end goal is the same: monthly recurring revenue.
Being a business owner is anything but glamorous. Late nights, long hours, making payroll deadlines, creating a culture, hiring, firing. There is a lot of unseen pressure on a business owner, but most owners would say it is worth it. Having independence from shareholders and being the boss comes with the freedom to create the business and lifestyle they want.
If you’re considering transitioning to a Hardware as a Service (HaaS) model, or if you already offer it, one of the most important factors to consider is the potential financial risk to your business. We’ve heard and seen stories firsthand. You fund the upfront costs for your customers’ equipment and services either with your own cash or a loan, with a payment plan that projects you recoup the cost through monthly payments in about 18 months. Then, after a short 9 months, the customer defaults on their payments, sticking you with the bill. If that happens on one too many HaaS deals, you could quickly find yourself in deep water.