18 01732 759725 and prospects can learn from each other (and sponsors) while indulging in their love of motorsport. Lessons learnt Daniel co-founded MSP Finance Team in September 2021 with Adam Morris, founder and CEO of Avagio IT Services (acquired by Optimity), to share what they had learnt founding, developing, selling and acquiring MSPs over the previous 20 years. “When I started mentoring other MSPs, after the sale of my business (amicitia, acquired by NewCMI in 2014), my strapline was ‘I help MSP owners make different mistakes to the ones that I made’. That was slightly tongue in cheek – nobody’s got all of all the answers, but two heads are better than one,” he explains. “My understanding of the marketplace intersected with my understanding of the maturity that financial management brings in growing and developing a business. I had been under-served by regular, non-vertical-specific accountants and bookkeepers and realised that most MSP owners, for whom finance is an alien subject, can very easily be led astray by non-knowledgeable accountants and bookkeepers. Bringing those two elements together achieves a level of confidence for both sides.” MSP Finance Team currently has around 50 clients, ranging in size from £100,000 in annual revenue to £10 million. “Somewhere between £500,000 and “Vendors need MSPs to be competent sellers of their products and services to end clients. But if MSPs are working at a stressed rate because they’re not earning enough money, they won’t have the overhead, the bandwidth to be able to manage their clients properly and sell more of what vendors want them to sell. “If MSPs were sufficiently knowledgeable about the breathing space they needed to create in their business, which finance would tell them, then they’d be able to improve throughput for the vendors. That’s why vendors quite helpfully and correctly invest so much in peer communities. It’s why Connectwise bought HTG Peer Groups (rebranding it as IT Nation Evolve) and Kaseya bought True Methods – to help educate and elevate the financial maturity of the market.” Clearly MSPs, too, have a role to play. “Their first challenge,” says Daniel, “is to become enthused with what good finance can offer, in terms of reaching the future position of being able to sell their business and realise its value and not having to work all the time on mundane activities. The second challenge, once enthused, is to gain a level of maturity and understanding [of financial management].” MSP Finance Team aims to help MSPs achieve both these aims through a combination of mentoring and virtual financial directors; bookkeeping and accounting services created exclusively for MSPs; and MSP Meetups, where clients I’m forever being told this is a golden age for MSPs, so why do I feel so hard up? That’s a question many MSPs might have pondered and for which Daniel Welling, Co-founder of MSP Finance Team, has a simple answer: it is because MSPs are entirely disinterested in the financial management of their business and would much rather be solving a technical issue or helping their clients. This lack of interest and awareness, he says, creates all sorts of problems. “For example, most traditional accountants would put staff costs below the line as an overhead, so the MSP might think they’re making lots of margin until they allow for their labour costs – often their own salary which doesn’t even go through the P&L because they pay themselves by dividend – at which point they realise they’re making no money and, in many cases, are actually losing money. That’s cloaked by the fact that their business can still give them a reasonable income. They can earn a living, but in reality they’re being paid less than they would if they got a job somewhere else. “I say this with a smile on my face and tongue in cheek, but the tragedy of the MSP market is that so many MSPs are putting in so much effort and ultimately not getting the rewards they should and that is diminishing growth. If more MSPs sold what they do at a higher price, the market would have more money, there’d be more margin and it would be a better industry overall.” Not doing this, suggests Daniel, creates disfunction in the market. Technology Reseller talks to MSP Finance Team co-founder Daniel Welling about the challenges facing MSPs and what they should be doing to overcome them Getting on the right track MANAGEMENT The MSP Finance Team (l-r): Adam Morris, Daniel Welling and Chas Roopra
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