How to Start an MSP (Managed Service Provider) Business

Starting a managed service provider (MSP) business is a common path for IT professionals looking to turn technical expertise into a scalable, recurring-revenue company. As businesses increasingly outsource IT management, demand for MSPs continues to grow across industries and company sizes.

This guide explains what an MSP is, the services MSPs typically offer, and the concrete steps required to start, price, operate, and scale an MSP business successfully.

What is a managed service provider (MSP)?

A managed service provider (MSP) provides organizations with a broad range of IT services that help them manage and optimize their IT infrastructure and operations. These services can include network management, software updates, help desk support, and IT consulting.

MSPs differ from break/fix IT providers in that they offer continuous and proactive management, while break/fix providers are more reactive and operate on an on-demand basis. 

In other words, MSPs are designed to prevent issues from arising, while the break/fix model focuses on fixing problems after the fact.

What services do MSPs typically offer?

MSPs can take on a wide range of responsibilities, depending on the agreement you have in place. They often handle complex or time-consuming tasks involved in managing and maintaining the IT infrastructure. 

Some MSPs also specialize in specific verticals such as legal, financial services, healthcare, or manufacturing, where compliance and workflow requirements are more demanding.

Who should use a managed service provider?

If you’re wondering what types of organizations MSPs are best suited for, here are some of the most common fits:

• Large enterprises that want deep expertise, reduced downtime, and lower operational costs.
• Small and midsize businesses (SMBs) that want to stay focused on growth and scalability instead of day-to-day IT management.
• Hybrid and remote organizations that manage a complex, distributed workforce across different time zones and locations.
• Organizations in highly regulated industries require specialized compliance and cybersecurity controls.

Of course, this isn’t a definitive list. At a high level, MSPs offer specialized expertise (especially in cybersecurity), predictable costs, and flexible support that can scale with your business. Any organization looking for those specific advantages stands to benefit from working with an MSP.

How to start an MSP business in 5 steps

Now, let’s walk through the key steps to start an MSP business, from ideation and registration to choosing vendor partners and building a plan to scale.

1. Do market research and develop your MSP business case

Before anything else, market research should be your first step when starting an MSP. 

This process won’t just help you decide which services to offer, but it’ll also show you whether your idea has a realistic path to success.

Here are a few steps to guide the process:

• Choose an industry focus: Consider which industries have strong demand in your area, and where you already have experience or expertise.
• Study the competition: Evaluate other MSPs in that specific industry from top to bottom: see what they’re offering, how they position themselves, what they do well, and where you see opportunities to improve.
• Spot trends and a real gap in value: Look at what buyers are asking for and where the market is heading. This is also a good time to speak with prospective customers about what they would like providers to offer—or what they feel is currently missing from available services.
• Narrow your scope: Synthesize what you’ve learned into a clear niche and a simple mission statement that defines the specific problem your MSP is built to solve.

2. Decide on your MSP product specialties

Once you have your business case, it’s time to decide what product specialties you want to offer. To be clear, this part is strictly strategic and not yet in execution.

Start by choosing whether you want to focus on core services, more specialized offerings, or a mix of both. 

Core services cover day-to-day IT management essentials, such as help desk support and remote monitoring, while specialized services are add-ons that address specific needs or deliver higher-value outcomes.

Here’s a quick comparison between the two:

Core services	Specialized services
• IT monitoring and alerting • Patch management and software updates • Help desk and technical support • Backup and disaster recovery • Managing user access accounts	• Augmenting cybersecurity solutions and strategy • Offering compliance and risk management • Cloud management and optimization • Virtual CIO (vCIO) and IT planning • Handling contract management

If you intend to lean into cybersecurity, you can also position your business as an MSSP (managed security service provider). MSSPs are third-party providers focused on security services and help reduce the security burden on internal IT teams. 

Common offerings from MSSPs include firewall and VPN management, threat detection and scanning, and compliance guidance and support.

3. Set up and establish your business

After you’ve identified the area in the market you want to address, the next step is doing some much-needed legwork to actually establish your MSP as a real business. 

This is the part where you register it, think through your legal structure, set up your basic brand presence, and handle the admin essentials that make it easier to sell and deliver services.

MSP360 outlines some foundational steps, as seen below:

• Register the business as an LLC or another type of corporate entity.
• Set up a dedicated business bank account.
• Create an SLA template for client use.
• Find an accountant, an attorney, and any other business professionals you may need to help run the business.
• Obtain a dedicated business phone number.
• Register a domain name and set up a basic website for your business.
• Create (or commission) a logo for your business.
• Find office space (to keep your travel costs low, it’s wise to set up shop close to your target clients).

This would also be the time to acquire the necessary licenses and permits specific to your prospective field of business, whether IT- or cybersecurity-related licenses or environmental permits, as needed.

4. Structure and price your MSP offering

After setting up your business, it’s time to structure and price what you’ll sell. Most MSPs package and price their offerings as follows:

• All-you-can-eat pricing offers customers a comprehensive service package for a fixed monthly fee.
• Bundled pricing groups multiple services into a single package at a set price. Unlike all-you-can-eat, bundles don’t necessarily include every service you offer.
• Tiered pricing organizes offerings into levels, usually starting with a baseline and progressing to “better” and “best” tiers. The higher the tier, the higher the price-tag.
• Per-user pricing charges customers based on the number of supported users.
• Per-device pricing depends on the number of devices (regardless of user count).
• À la carte pricing lets customers pick and choose specific services, offering flexibility to tailor their spend to their needs.

5. Set up your MSP operations

Once you have a clear product and strategy in place, it’s time to build out your team and operational infrastructure. 

While the list below isn’t exhaustive, these are key considerations as you start gearing up your business:

• Develop your org structure and staffing plan
  • What kind of team structure do you want to build?
  • How many employees or contractors do you expect to start with?
  • Hire (or line up) the technical expertise you’ll need to support clients.
• Define how your MSP will operate day to day
  • Will you run the business fully remote, hybrid, or from an office?
  • What equipment, tools, and software will you need to consistently deliver and support services?
• Plan how you’re going to market your business
  • How will you market your MSP to your target customers?
  • Start defining your ideal customer profile (ICP) based on industry, size, needs, and budget.
  • What budget will you need to support your marketing goals?

At this point, you have built the foundation for a fully functioning MSP. Your services are defined, your business is set up, and you are ready to start work as an MSP. 

The next challenge is turning that foundation into actual revenue. In the next section, we will walk through practical ways to land your first clients, package an offer that drives early traction, and onboard customers that support long-term retention.

How MSPs make money and win their first clients

1. Find your first MSP clients

Landing your first MSP clients can feel daunting, but there are several proven ways to start generating momentum early. 

One of the most effective approaches is leveraging referrals. This includes reaching out to your existing professional network, former colleagues or employers, and early contacts who may already trust your expertise.

You should also begin building a basic marketing presence. This means:

• Launching a simple website
• Establishing social media profiles
• Using targeted email outreach
• Investing in SEO to help improve online visibility

It would also be prudent to consider strategic partnerships with vendors or complementary service providers to find clients. These relationships can create mutually beneficial referral opportunities and help you access prospects you may not reach on your own.

2. Onboard clients successfully

Once you’ve secured prospective clients, a structured onboarding process is critical to setting expectations and building long-term trust. Key steps in the onboarding process include:

• Hold a kickoff meeting to introduce your team, outline how you work, and clearly understand the client’s goals and priorities.
• Conduct discovery and documentation to assess the client’s current IT environment, including infrastructure, applications, users, and existing pain points.
• Define and ink a clear Service Level Agreement (SLA) to clarify which services are included, what performance metrics are in place, and what the responsibilities are for both parties.
• Set 30–90 day expectations and schedule QBRs to review progress, evaluate early results, and identify opportunities to optimize or expand services.

Successful onboarding helps reduce friction and establish your MSP as a reliable partner from day one. At this point, we’re confident that you’re already making revenue following a proper onboarding process.

3. Improve and scale your MSP

After establishing early revenue, the next goal is to maximize your business and scale into a more profitable MSP. Once you’ve built momentum with your first clients, focus on:

• Standardize your processes and SLAs to ensure consistent service delivery and more predictable revenue.
• Commit to continuous service improvement by refining your offerings, expanding your service catalog (when it makes sense), and adding the right technical expertise as demand grows.
• Leverage automation and AI to improve workflows and reduce manual effort.
• Monitor key metrics such as SLA adherence, ticket volume, and customer churn to identify where you can improve efficiency and retention.
• Choose vendor partners that support growth by adopting the right RMM and PSA tools and prioritizing integrations that improve service delivery and client value.

To be clear, many variables can affect how quickly an MSP starts making a profit. However, the steps above cover some key fundamentals and can help put your business in a strong position for long-term success.

Final thoughts: Building a sustainable MSP is worth the trouble

Building a successful MSP requires more than technical skill. Long-term profitability depends on choosing the right niche, defining repeatable service offerings, pricing for sustainability, and maintaining disciplined operations.

By focusing on fundamentals—clear value delivery, standardized processes, and deliberate growth—new MSPs can avoid common pitfalls and build a business positioned for long-term success.