Episode 55: What is the Rule of Three for MSPs?

In this solo episode of the Infinite Scale podcast, host James Vickery discusses outsourcing for managed service providers (MSPs), a topic central to Benchmark 365's offerings but not often deeply explored on the show. He highlights the evolving market dynamics, especially post-COVID, which have made outsourcing a more common practice among MSPs seeking operational efficiency and improved margins. James outlines four main outsourcing models: freelancing, Business Process Outsourcing (BPO), shared services, and creating an offshore corporation, providing insights into the advantages and challenges of each.

- **Freelancing** offers a bootstrapping option for MSPs but comes with risks related to reliability and continuity, necessitating what James calls the "rule of three" for redundancy.
- **BPOs** manage HR aspects and offer a more structured approach but may not always align with an MSP's culture or specialize in managed services, potentially leading to mismatches.
- **Shared Services** provide a turnkey solution without the direct management of staff, suitable for MSPs looking to avoid the complexities of building and managing a team. James advocates for this model, considering it optimal for rapid growth without the hassles of personnel management.
- **Building an Offshore Corporation** is mentioned as a complex, long-term strategy requiring substantial commitment and understanding of foreign business environments.

James stresses the importance of choosing the right outsourcing model based on an MSP's specific needs and goals. He encourages MSPs to reassess outsourcing, especially if previous attempts have been less successful, noting the industry's maturity and broader acceptance of such practices. He concludes by inviting feedback and further discussion, highlighting Benchmark 365's openness to assist MSPs in exploring outsourcing solutions.