If your company is considering starting a managed service provider business, you’re entering an exciting, but challenging opportunity. Unlike traditional services, managed services are about building a system. This prevents problems before they start, which means having a scalable managed services framework, a solid strategy, and a business model that works.

Many companies are drawn to managed services by the promise of recurring revenue and the opportunity to build stronger client relationships. This potential is exciting, but it's important to remember that success in this space isn’t just about offering services—it’s about creating an efficient, profitable, scalable managed services operating model.

How do you start a managed services company the right way? A good idea alone isn’t enough; success requires a solid strategy. We’ll guide you through the key steps, from designing a managed service provider business plan to building a business that’s competitive and built to last. Let’s get started.

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Step 1: Managed Services Business Plan

You need a solid game plan to build a managed services business that works—not just a vague idea of what you’re offering. You need a strategy that defines your niche, pinpoints where your revenue will come from, and sets you up for long-term success.

One of the best ways to map this out is to create a business-managed services model canvas. Think of it as your blueprint that helps you lay out everything: your managed services delivery model, your ideal customers, the key resources you need, and the revenue streams that will keep you profitable. Companies that take this structured approach scale faster, run more efficiently, and avoid the chaos that trips up so many new MSPs.

Your competitors can also provide valuable insights. By identifying their strengths, you can position your business in a way that sets you apart. The more precise your unique selling proposition, the easier to set realistic goals and build a plan that truly differentiates you.

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This managed service provider business model provides a structured approach to delivering value and sustaining long-term growth.

Related: The State of Managed Services 2025

Step 2: Understand Legal and Compliance Requirements

When starting a managed services company, it's crucial to understand and address legal and compliance requirements. While these aspects may not be the most exciting, they are essential for avoiding potential problems. The good news is that these issues can be managed effectively with early and proactive attention.

Why compliance matters

Running a business IT-managed services company means handling sensitive client data, which puts you under a legal microscope. Many new managed services IT company owners underestimate how many regulations apply to them.

So, here are a few key areas that’ll keep you on track when setting it up:

• Get your licenses and permits in order
• Understand the significant compliance laws
• Write solid Service Level Agreements (SLAs)

The table below outlines key licenses and certifications commonly required for MSPs. It includes their purpose, who needs them, and example jurisdictions where they apply.

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Step 3: Develop a Managed Services Offering

Your managed services offerings are what set you apart. The more relevant they are to your audience, the easier they are to scale. At a minimum, your services should cover core IT needs like remote management, cybersecurity, cloud solutions, and disaster recovery. Beyond that, it’s about structuring your pricing in a way that makes sense.

But, here’s the key: If you’re only competing on price, you’re in a race to the bottom. Instead, build your managed services plan around client pain points, focus on solving critical business problems, and create a model that grows with them and you.

Related: Which Practices and Metrics Are MSPs Overlooking in Offers and Sales?

Step 4: Specialization of Sales

Selling managed services is unlike hardware, software, or support contracts. You will struggle if you’re still pitching it like a traditional IT service. Managed services are about outcomes, so your sales team must approach things differently.

First, they must understand the technology and how it’s managed—operations, compliance, the whole picture. However, these deals take longer, are more complex, and are usually decided way above IT’s pay grade.

IT might influence the decision, but the real sign-off comes from the CXO level or a major business unit VP. They don’t care about the latest Remote Monitoring Management tool; you need to speak their language. Show them how managed services reduce risk, control costs, and improve efficiency—and you’re on your way to closing bigger, more profitable deals.

Step 5: Service Delivery

Selling managed services is different from delivering them. It’s not only about your operations—it’s about integrating them into your customers' operations. Your service delivery model should ensure that the outcomes you promised will happen. This approach, in addition to standardization, scalability, and automation, are non-negotiable. It reassures your clients that their operations are in good hands.

This is where your approach and model become non-negotiable; If your delivery isn’t built for efficiency, you’ll be burning resources and cutting into profits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Few functions impact profitability and customer satisfaction more than delivery. If you nail this, you will keep clients happy and create a scalable managed services framework that fuels long-term success.

Step 6: Client Operations

Once your managed services operations run smoothly, the next step is ensuring your clients can scale with you. Optimize client operations to ensure your long-term growth and profitability.

Strategic client growth tips:

• Expand your service model by aligning with vendors that bring added value to your clients.
• Enhance client operations with automation, reducing manual work and increasing efficiency across their IT infrastructure.
• Design a service plan for a managed IT company that evolves alongside your clients.

Related: Which Practices and Metrics Are MSPs Overlooking in Delivery, Operations, and Customer Success?

Step 7: Ensure Profitability

If you don’t have someone in your managed services organization who understands your financials better than the finance department, you’re setting yourself up for trouble.

Running the financial side completely differs from selling products or traditional IT services. You’re dealing with recurring revenue, revenue recognition, margin calculations (both gross and net), and constant investments in resources and operations. The best-managed services delivery model can fall apart if you don't get these right.

We’ve seen it happen—fast-growing managed services businesses with amazing offers and top-tier talent crumble when they don’t take financial governance seriously.

Building a Successful Managed Services Business

The companies that truly thrive in this space standardize, automate, and optimize everything, from sales and operations to financial governance and client relationships.

Success requires a clear strategy, a strong delivery model, and the financial discipline to keep the business stable, no matter what the market throws at you.

You'll lead if you focus on compliance, build your business to scale, and align your services with clients' needs. You’ll create a company that doesn’t just react to change, but drives it. That’s where the real opportunity is.

You don’t have to figure it all out on your own. For more information about how membership can help you solve your most pressing business challenges, contact TSIA today.

FAQs

Why is building a managed services business important for IT organizations?

MSPs offer proactive IT management, reducing downtime and improving client business continuity.

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What are the key components of a successful managed services business model?

A strong business model includes clear service offerings, competitive pricing, efficient operations, and a strong sales pipeline.

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How do I define the scope of services for a managed services business?

Evaluate market demand, analyze competitors, and align services with client needs.

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What tools and technologies are essential for managed service delivery?

RMM, PSA, cybersecurity tools, and cloud-based management platforms are essential for operational success.

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How can I price managed services effectively?

Choose a flat-rate, tiered, or per-device pricing model that aligns with your business goals and client expectations.

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How can I scale a managed services business effectively?

Invest in automation, expand your services portfolio, and build a solid marketing strategy to attract and retain clients.

Your Key Takeaways

• A clear business strategy is essential for MSP success: Launching a managed service provider (MSP) business requires more than technical expertise—it demands a well-defined business model. A structured MSP business plan, including revenue models, service offerings, and compliance frameworks, ensures scalability and long-term profitability.
• Compliance and standardization build trust and efficiency: Meeting legal and compliance requirements is non-negotiable in managed services. Obtaining the proper licenses, adhering to data protection regulations, and implementing standardized processes protect your business and establish credibility with clients.‍
• Profitability hinges on service differentiation and financial discipline: Successful MSPs go beyond basic IT support by focusing on automation, efficiency, and customer-centric service delivery. Aligning offerings with client needs, managing recurring revenue effectively, and optimizing financial operations create a resilient and profitable business.