Pricing Packages for an MSP. How much to charge per client?

Key takeaways

Use $300 per head as a starting point for pricing your MSP services.
For an advanced pricing model, calculate your cost of goods sold and multiply by five.
Understand your business model to create appropriate pricing strategies that encompass bundled services.
Profit margins can increase by integrating hardware, software, and service offerings.

Summary

The Simplified Pricing Model

In this section, the host discusses the straightforward approach to pricing services for Managed Service Providers (MSPs). The suggested baseline is $300 per person, which can create a solid profit margin. However, it's emphasized that pricing should not be divulged too early in client meetings to foster rapport and allow for understanding the specific business needs.

The Detailed Pricing Approach

For those who seek a more advanced understanding of pricing, the podcast explains that all costs, including labor, should be multiplied by five to ensure profitability. This method ensures that expenses are covered and that one can invest back into the business. Furthermore, the importance of understanding what business model you wish to adopt—low-margin resale or high-margin comprehensive service offerings—is highlighted.

Understanding Profit Margins

The episode encapsulates the significance of knowing where profit can be maximized. It advises MSPs to bundle hardware, software, and services together for a more lucrative 80% gross margin, as opposed to being restricted to low-margin sales. Ultimately, the focus is on pricing services in a way that supports business sustainability.

Show notes

Do you want to double your MSP revenue? If so, you are going to want to make sure you are pricing your MSP services properly. In this episode, Cindy Phillips, our head sales coach breaks down how much to charge per client and how to put IT service packages together that make sure you are profitable.

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