Whether you’re a small business or an enterprise company, generating a steady (and improving) gross margin for your services is essential to a healthy business. When starting or managing a business, there are many KPIs to track. At BrightGauge, we always recommend you lean towards simple as too much data can be overwhelming. An often overlooked but essential KPI to watch is Services Gross Margin.
So, why is gross margin so important for MSPs? Simple. Services Gross Margin represents cash being generated to cover all those operating expenses. Your sales team, the office space, marketing efforts – all covered by Services Gross Margin. Higher gross margin means more money to invest in your business and accelerate growth.
Here are some definitions to keep in mind when calculating Services Gross Margin:
Over the years we’ve heard different variations for how to calculate Services Gross Margin. For the purposes of this post we are going to use this formula:
(Total Services Revenue - Cost of Services) / Total Services Revenue
An example of how to track Services Gross Margin in BrightGauge
Before we formed BrightGauge, we had our own Miami-based MSP, Compuquip . Our typical Services Gross Margin hovered around 42% - 48%. This was well below industry best practices according to most . We were a Technically Led Sales Organization. Therefore, our cost of engineers was higher than normal and our margins tended to be lower. When we broke out the services by line item, we usually ended up with an average margin on Managed Services of approximately 40% - 45% and Project or Professional Services at 50% - 60% range. To see a more detailed breakdown of the types of revenue please visit: Revenue By Category.
We believe anything above 50% is a great target margin and if you can move the percentage up to 60% you are best in class. If this number starts to trend downward, you could be approaching a cash flow problem. That’s why it’s important to start measuring and tracking these types of financial KPIs on a regular basis. Once you decide on those metrics that matter to you, start setting goals to guide you and your team.
To learn more about gross margin and other metrics that matter for MSPs, download the full white paper here . If you already know what KPIs matter to you but you’re struggling keeping track of everything, reach out to us and we’ll help.
Note: This post was originally published in August 2013 and has been updated for accuracy and comprehensiveness.
Whether you’re planning your first managed services agreement, or you’re ready to overhaul your existing version, we've got you covered!
Dashboards and reports play a vital role in streamlining data and extracting valuable insights. In the dynamic realm of endpoint management, it is imperative for Managed Service Providers (MSPs) to have real-time access to consolidated data from their array of tools, enabling swift action on behalf of their clients. Utilizing metrics not only aids in pinpointing areas for enhancement but also empowers them to enact precise strategies for advancement. In this month's featured Dashboard, we delve into RMM Overview metrics tailored to streamline endpoint monitoring and management. Our inspiration stems from a recent user showcase webinar featuring Nate Ginn, the Centralized Systems Manager at ESI Technology Advisors, who shared insights on leveraging ConnectWise RMM and ConnectWise PSA data for enhanced client management. Tune in to Optimizing Remote Monitoring and Client Management with Data to discover more on how Nate drives performance enhancements through data utilization. Nate and the ESI team rely on the RMM Overview dashboard to gain a snapshot into critical indicators like patch status, warranty updates, and disk space utilization, guaranteeing optimal functionality of their endpoints. This visual aid, shared among their team, helps them stay ahead of RMM tickets for prompt issue resolution as well. RMM Overview - Endpoints - view here. Here are some featured metrics: Ticket & Configuration Information - These segments organize RMM tickets based on their status, time spent, and attached configurations. It also offers a historical perspective on ticket volume, and provides insight into the endpoints and software under your management. Patching & Disk Space Utilization - These metrics provide valuable insights on missing patches, OS patch compliance rates, and disk space utilization percentages. These data points are crucial for addressing performance concerns and identifying potential security vulnerabilities. Thank you, Nate, for collaborating with us and sharing your valuable insights! Recreate in your BrightGauge RMM Overview - Endpoints Dashboard (public view link) RMM Overview - Endpoints Buildout Key Make sure to visit our library of more report and dashboard templates and please feel free to reach out to success@brightgauge.com with any questions!
Managed Service Providers (MSPs) play a vital role in ensuring the smooth functioning of their clients' IT infrastructure. One effective way for MSPs to showcase their worth and maintain transparency is by crafting monthly client reports. These reports can spotlight important metrics around ticket volume, response and resolution times, and customer satisfaction ratings, illustrating their dedication to meeting service level agreements (SLAs). For June's Report of the Month, we are excited to present a Service Desk Summary Report inspired by a recent User Showcase Webinar on Client Reporting Excellence featuring Scott Kingston, the Service Delivery Manager at Spark in New Zealand. This 30-day summary offers a comprehensive view of the services delivered in the past month. Utilizing dynamic filtering capabilities in BrightGauge, this report can also display data from the previous month, tailored to your reporting preferences. Scott and his dedicated team at Spark NZ diligently distribute their Caretaker Plus Service Desk Report on a monthly basis, providing both interactive drill-down features and a downloadable PDF version for convenience. These reports offer a detailed backdrop for their regular meetings and consistently showcase the tangible advantages and improvements facilitated by Spark's exceptional services. This not only validates their pricing structure but also strengthens their reputation as a reliable and valued partner. Service Desk 30-Day Summary Report - view here. Here are some featured metrics: Ticketing Information - This section offers a concise overview of active tickets, the 30-day history of both open and resolved tickets, and key performance indicators such as resolution rates and customer satisfaction scores (CSAT). Ticket Trends - This section categorizes tickets to easily identify trends. For instance, metrics include tickets by type, subtype, item, source, and ticket opener. Additionally, it provides insights to highlight potential problematic tickets, such as those with extensive time entries and an aging ticket summary. Open Projects & Managed Servers - Concluding the report with a brief summary of ongoing projects and the effectiveness of managed servers opens up avenues for further improvements and additional tasks to be explored. Thank you, Scott, for collaborating with us and sharing your Caretaker Plus Service Report template! Recreate in your BrightGauge Service Desk 30-Day Summary Report (public view link) Service Desk 30-Day Summary Report Buildout Key Make sure to visit our library of more report and dashboard templates and please feel free to reach out to success@brightgauge.com with any questions!
As MSPs navigate the dynamic world of IT services, utilizing data in Quarterly Business Reviews becomes crucial for steering discussions towards providing personalized value and fostering enduring client connections. Integrating a real-time data dashboard into your meetings not only fosters trust but also promptly showcases your company's worth to clients. For April's Dashboard of the Month, we are highlighting an Executive Business Review Dashboard that offers a high-level overview of key performance metrics and trends that can be shared with your customers. This dashboard was crafted following a discussion with Jeremy Roth, the CEO and managing partner at S1 Technology, during February's user showcase webinar Demonstrating Client Value through Dynamic Dashboards. Jeremy and his team at SI Technology have successfully utilized this Executive Business Review dashboard to enhance their data-driven decision-making processes with clients. By using the parent-child dashboard feature in BrightGauge, they are able to roll out and manage dozens of client dashboards seamlessly, creating a culture of transparency and accountability. The Parent-Child Dashboard feature in BrightGauge simplifies the process of creating multiple client dashboards while maintaining consistency across all of them. In this particular case, the Executive Business Review Dashboard acts as the parent dashboard template. Any changes made to the parent dashboard will automatically cascade down to the attached child dashboards, ensuring uniformity throughout. Executive Business Review Dashboard - view here. Here are some featured metrics: Ticketing Information - This section provides a high-level overview of support interactions throughout the quarter, shedding light on ticket volume, what types of tickets are being opened, who is opening tickets. The drill downs (not showcased on the public dashboard) provide details on each ticket's resolution efficiency. SLA Trends - Service Level Agreements are critical benchmarks for measuring service quality. The SLA Trends section analyzes adherence to their agreements, highlight areas of success and potential improvement. Managed Devices - Managing devices data is central to ensuring operational efficiency and security. This segment of the dashboards offers insights into device inventory, performance metrics, and patch compliance statuses. Thank you, Jeremy, for collaborating with us and sharing these great metrics! Recreate in your BrightGauge Executive Business Review Dashboard (public view link) Executive Business Review Buildout Key Make sure to visit our library of more report and dashboard templates and please feel free to reach out to success@brightgauge.com with any questions!
