Hello,
I might get laughed at for this question. I’m not a huge forum guy but…I am looking for an average markup or average billing cost for Acronis backups (any flavor of backup) or Bitdefender (both base and with add-ons). Maybe a simpler way to put it, is there a standard percentage markup on software or similar items? I have some ideas but want clarity if I’m low or high or just right.
Also, best videos to learn how to use Syncro well. And any tips or tricks are also welcome.
Humbly,
-C
Highly depends on your market, your clients, your business model, etc. Some charge separately but the more common model with MSPs is to bundle all or most of your services into a single package cost by user or device rather than piecemeal. This leads to easier to manage client relationships, billing and support,. Standardization wherever possible is important for scaling and profitability. The numbers I typically see thrown about is 50-70% margin.
Syncro has lots of videos on their youtube channel https://www.youtube.com/channel/UC4SimcOMMA6VaX7tgnKCP6w/videos
Acronis - We use the per Workload. We charge the MSRP of $.10 / GB, but bill in 1TB increments. We also charge for the per device license. I don’t have the stuff in front of me but it’s something like $10 / wks, $25 virtual, $40-50 for physical. Minimum is $250 which includes an onsite backup unit. This is one of our highest profit margin services.
BD - If we separate it, it’s like $5 / month. We haven’t sold the addons, because we have been using S1 instead, but may be looking back into BD. It’s just a lot more pricier since you have to buy both HyperDetect and EDR to enable EDR.
Backup is one area that can bite you in the ***. We’ve had clients that had next to no data when we took over and then they start scanning these massive files and going all digital and now using 16 TB. That’s an extreme case, but we have another that was like 1.5 TB and now they’re at 7. Now in ours, we’ll have an up-to limit and then bill after that.
For sure. Special cases either require special billing or you just make sure your margin on your other clients is high enough to cancel it out. Fortunately I’ve not had any extreme outliers yet.
I’m not a fan of bundling and charging all employee positions in a business as if they have the same requirements.
They simply do not, and business owners of course know this.
If I did treat all employee positions in a business the same, I doubt we would get any revenue from PC or Office 365 backups.
Though I’d agree, not bundling is less efficient for our invoicing as we have to worry more about counts, but I’m working to solve that.
@anon62186003
There isn’t a magic markup as each MSP is different due to Geo and Customer base differences.
To work out your backup markup…approach it differently.
List all your costs including your time to manage, then add some $ to ensure you make profit, but not too much that no customers agree to the service.
You can change the price later anyway, if you realise it is too low or too high.
I really appreciate all the responses. I know it’s never black and white. It’s nice to hear others thoughts and perspective on it all. I believe I was going down the right path for now. Just need to get started.
As far as YouTube, been looking there. Thanks, will continue. I just feel a little overwhelmed with all the features and just get started and ensure im utilizing it and understanding it…but I know, like everything, it will come in time.
No way, this is a great question. My fingers are crossed in hope that Syncro adds native Acronis billing. That’s the only barrier to entry for us; we just created a SoP for our future billing admin regarding Acronis billing sync with Pax8. We would save so much money if we could have native Acronis billing like we do with Cloudberry/MSP360.
Welcome to the forum. Best of luck with your new MSP business!
Thanks Jason, apprecaite the welcome… and to think. I just moved from MSP360 to Acronis. Maybe I should have stayed with them. (hehe)
Hey Corey,
First off congrats on starting up a new MSP! That’s always an exciting time, particularly the notion of no longer having a ceiling over your head in terms of what you can now earn :).
In regard to ‘proper’ markup percentages, I wouldn’t actually worry too much about that at all. Margins shift depending on the class of customer you are targeting. Meaning if you’re working with majority break/fix and/or residential clients, you are likely competing with consumer products like Carbonite. So at that stage getting the sale, and ensuring you control as much of the customer environment as humanly possible is far more important than capturing a ‘magic’ margin. In fact, there are times it makes sense to use add-ons as a loss leader to ensure just that, especially if you are nurturing some break/fix customers in hopes of turning them into contract-based customers.
As larger percentages of your work shift to fully managed services, you can focus more on better margins since the customer dynamic shifts quite drastically at that point. Eventually when you get big enough, you’ll have fully standardized when and how you sell add-ons. In fact, in many instances those are simply enveloped into your base contract price.
Point being your biggest asset as a startup MSP is your ability to be nimble and change course at the drop of a dime, or change your approach as needed for a one-off customer. That type of freedom really isn’t feasible with larger MSPs who are always working to standardizing everything. It’s one of your best tools for capturing clients from MSPs much larger than you, actually.
In regard to what to focus on first for Syncro, I’d focus on ticketing above all else. The key to rapid growth at your stage is time management. Every second you are doing anything other than selling outwardly to new customers, your revenue potential (labor revenue per technician) is going down by the minute. Ensuring you are using the most low-touch ticket ingestion methods prevents you from wasting significant amounts of time having to track things in multiple places (transferring SMS messages or voice conversations to tickets, for example), and it ensures you are teaching your customers to use the most economic ingestion methods that work best for you as a 1-tech MSP.
So I’d focus on getting your ticket flow and prioritization queues solid. For example, as a 1-tech MSP, email and Agent Contact Forms are going to be your best ingestion methods. Live Chat is a sick Syncro feature, but it comes with certain expectations you likely can’t meet at your size. Also, understanding how to triage/prioritize tickets (along with on-site service calls) is going to be king here.
Don’t get overloaded with anything else just yet. After a solid 4-6 weeks of logging everything as a ticket, even internal stuff, then spend a Saturday or Sunday going over all your previous tickets and finding holes and commonalities. For example, I wasted more time doing this stuff because of X, or if I had a way to automate Y, then I would have saved a bunch of time because I manually resolved 17 tickets in that timespan by performing the same task.
From there, start to shift away from manually billing out of QBO or Xero (assuming that’s what you’re doing now) and start billing out of Syncro. The more systems you can remove from the equation the simpler things become, and this will set you up FAR better when you start to bring on more and more contract customers, because our recurring billing system (particularly the dynamic counting component) is second to none and will save you a huge amount of time down the road.
Chasing fancy scripts, perfect processes, and all the little bells and whistles can be a huge black hole at your size. In reality, you can do everything wrong and still rapidly grow if your compass consistently points toward new customer acquisition above all else.
The last piece of advice I’d give is to remember that you are no longer a technician, you’re a businessperson. Most new startups in this space come into it with a tech-driven mindset instead of a sales-driven mindset. This is often the difference between an MSP that grows rapidly in their first year or two, and MSPs that simply never grow at all.
Let me know if you have any questions and I’d be happy to help you out. Also, I have a book out designed specifically for startup MSPs. If you have a Kindle reader, PM me your email I will gift you a copy. I do tackle pricing and packaging and handling add-ons specifically in the book.
Andy,
Thank you! So valuable! I will try and PM you now.
-Cory