Nancy Henriquez on What To Do Before Selling Your MSP Business

In a special, two-part episode of Channel Insider: Partner POV, host Katie Bavoso interviews Nancy Henriquez, an MSP expert and two-time IT services business owner with recent experience working for an IT vendor.

Henriquez’s journey provides invaluable enlightenment for anyone in the IT channel, particularly those managing or considering starting an MSP business. With Henriquez’s dual perspective as a business owner and at a tech vendor, the conversation highlights lessons on growth, resilience, and the transforming scene of managed services.

Starting out: Finding opportunity in break-fix

Henriquez’s journey begins right after high school when she entered the IT space as an intern at a local break-fix shop. Reflecting on that time, she notes how she felt out of place early in her career due to her youth in a field dominated by more experienced professionals.

Despite this, she quickly learned the ropes and identified a gap in the market: “My employers weren’t really into the idea of recurring revenue or contracts, and that’s where I wanted to go,” she says. By the age of 22, with a young family, Henriquez took the leap to start her own break-fix shop.

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The pivot to managed services: Seeing beyond the break-fix model

After running her break-fix business for nearly a decade, Henriquez had an epiphany: the break-fix model wasn’t sustainable for long-term success. “Break-fix is more time-material,” Henriquez explains. “You literally have to wait until something breaks before you can fix it, and there’s no proactiveness in that.” This realization pushed her to transition to the MSP model, where she could offer more proactive services to clients.

Bavoso then asks, “When you first heard the term MSP, what did it mean to you, and how has that evolved over time?” Henriquez recalls attending her first MSP conference in 2016, which opened her eyes to the possibilities within managed services. The MSP 501 list, particularly the top ten businesses, became a guiding light for her. “I started looking at those businesses to understand how they were making it work and how they were successful,” she says.

From fixing problems to providing solutions

As the conversation continues, Bavoso challenges Henriquez to reflect on how the MSP space has evolved since she started. Henriquez acknowledges the expansion of managed services beyond infrastructure, noting, “Managed services now are so broad—you can have managed services within IT, print, and telecom. It’s no longer just about fixing problems but helping businesses run more reliably and efficiently.”

For business owners or those starting in the MSP space, Henriquez emphasizes that being an MSP today is about more than just fixing problems. It’s about offering solutions that keep businesses running efficiently and set them up for sustainable growth. This includes guiding clients through emerging technologies like artificial intelligence and cybersecurity.

Handling customer expectations in technology solutions

Bavoso asks Henriquez about the challenges of dealing with customers who request new technologies they may not fully understand. Henriquez reflects on this, saying clients often approach her with requests they’ve seen at conferences, asking for features or technologies without grasping the complexities involved.

She recalls, “I find it funny, especially when customers were, you know, oh, I went to this conference, and I heard this, and I want that technology for me,” a demand that seems simple but requires a deeper understanding of the business’s context, such as location, software compatibility, and operational needs.

Henriquez emphasizes educating customers rather than simply fulfilling their requests without guidance. She notes that it’s not enough to want something new and innovative; businesses need to know how it fits into their existing framework.

She stresses, “You have to understand the positioning of your business, the location of your business, and what software you work with,” underscoring the point that innovation requires thoughtful integration rather than impulsive implementation.

Exit planning: Start with the end in mind

Bavoso shifts the conversation to exit strategies, asking when business owners should start thinking about selling their MSP. Henriquez stresses that it’s not something to leave for the last minute. She recounts a pivotal moment from the Goldman Sachs 10,000 Small Businesses program, where she was taught to “start with the end in mind.” After attending the class, she realized she was not in the right business, saying, “I went home and told my husband at the time that we needed to sell it,” She reflects. “I had built a business more so out of survival and necessity, less about what I wanted out of life.”

Henriquez’s realization speaks to a larger truth for entrepreneurs: businesses should be built with a future sale in mind, even if that’s not the immediate goal. Her second venture, informed by this lesson, was structured entirely differently. “I read a book called Built to Sell, and it gave me foundational aspects that I needed to look at when building that business,” Henriquez says.

Part two: The perspective shift from MSP to vendor

Bavoso begins the second part of her conversation with Henriquez by asking about her transition from running an MSP to working for an IT vendor.

After selling her MSP, she was at a crossroads, wondering, “What is my purpose?” Her answer was a desire to “give back” by helping other MSP owners avoid common pitfalls and achieve growth faster. “I have so much to give and so much to offer to help other MSP owners not make the mistakes I did,” she explains, emphasizing a desire to support new and established MSPs in achieving success.

Her time in this role allowed her to grasp the importance of ongoing support for MSPs, especially as new entrants reshape the industry. She believes that the entire channel can grow stronger and more resilient when MSPs and vendors collaborate.

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The role of community in the channel

Bavoso and Henriquez delve into the idea of “community” within the IT channel, a term Henriquez uses frequently throughout the interview. Bavoso notes that the channel is “a community” where professionals quickly form connections and offer mutual support.

Henriquez agrees, adding that MSPs gain invaluable benefits from peer groups, which allow them to network, share challenges, and find mentors. She emphasizes that finding the right peer group is crucial; just as in any social setting, not every community will be the right fit. MSPs must feel comfortable and safe in these spaces, as openness about challenges leads to more substantial support systems and growth.

For new IT channel entrants, Henriquez advises exploring different peer groups and identifying one that resonates with them personally. This alignment with a group that feels like a natural fit can unlock collaboration and shared learning opportunities.

Education and upskilling: Investing in MSPs’ success

Bavoso asks what vendors could do better in fostering community and supporting MSPs. Henriquez suggests that vendors should focus on “upskilling and education, not just technical, but also how to run an efficient business.” She points out that MSPs are on the front lines of customer interaction and are critical to the growth of the tech ecosystem.

Given the rapid technological advances, particularly with the rise of AI, she argues that MSPs are at the “heart of the businesses that grow our economy.” Vendors should, therefore, focus on helping MSPs keep pace in technical skills and business management. “Without them, we wouldn’t be able to grow as much as we need to.”

Embracing collaboration over competition in the MSP industry

Bavoso probes Henriquez on what the channel community and MSPs could do better, and Henriquez advocates for “collaboration over competition.” She explains, “There is space for everyone, and… there’s plenty of business for everyone,” encouraging an industry-wide shift toward cooperation.

Henriquez’s vision underscores the need for collective growth rather than rivalry. By viewing the industry as a shared ecosystem, each MSP can contribute its distinctive strengths, which, in turn, raises the standards and services available.

Selecting vendors with intention and due diligence

In a marketplace where clients can access countless services, Bavoso challenges Henriquez on how she’d approach selecting partners if she were to start a new MSP.

Henriquez asserts that partner choice should hinge on the needs of your customer base. It’s not about partnering with every possible vendor but building a carefully curated selection that resonates with client expectations. “Asking the right questions as if you were your customer,” she says, is vital.

Henriquez advises MSPs to establish a due diligence process and consider publishing it to foster transparency.

Looking forward: Henriquez’s next chapter

In response to Bavoso’s inquiry about her future plans, Henriquez shares her current project: writing a book that will compile her own experiences alongside stories from the MSP industry.

Her goal is to create a resource for aspiring business owners who may not have a formal business education, guiding them on how to leverage community and peer support for growth. “Ultimately, I want to write a guide for someone… to start a business or grow a business, leveraging their community,” she says.

By sharing her knowledge, Henriquez hopes to bridge the gap for those entering the business world without traditional resources.

Tune in to the video or podcast above for more insights from Katie Bavoso and Nancy Henriquez, an MSP expert— and be sure to like and subscribe for future interviews with solution providers and thought leaders, plus special episodes and opportunities!