Managed Services: Don’t Get Nickel and Dimed

As a business owner, you need to decide what level of IT support is right for you. Small businesses frequently operate under the "break-fix" model. Break-fix is exactly what it sounds like: you run your business until something breaks, then you pay an IT support company to fix it. Large corporations usually have an in-house IT department to take care of their computers, servers, networks, and phones. Then there's the middle ground. Managed Service Providers offer a monthly service agreement to handle all of your IT support so you can control your budget and run your business. However, not all managed service agreements are created equally. Here are some tips on how not to get nickel and dimed. 

Break-Fix Model 

While the break-fix model appears the simplest out of the gate, it ends up costing more than you’d think. The ‘breaks’ cost you more because you're stuck with unexpected downtime, outages, and lost potential revenue. The ‘fixes’ cost you a lot more due to hardware costs, software costs, and paying Techs to install everything. At some point, you'll get tired of your CFO running into your office with a stack of bills from all of last month's fixes. 

In-House IT 

You’re probably asking yourself, why don’t I hire a full-time IT person to take care of my needs? Well, that is certainly an option, but when you take a deep look into the ROI you’ll notice a huge gap between hiring one person vs. contracting with a fully staffed Managed Service Provider. Let’s break down the costs. 

Let’s say that a full-time IT person will run around $50,000 a year, starting salary. That's $24.50 an hour, Monday through Friday, 8 hours a day. The actual cost will be a whole lot more! Your new hire will need a desk, a computer, a laptop (for remote work), maybe a gas card or car if you have more than one office, a cellphone, and high-speed internet access. And they'll also cost you vacation time, sick time, holiday pay, and probably a lot of overtime. At the end of the year, you're probably close to paying out twice their base salary. And you're still basically operating under the break-fix scenario because that individual is not available to do everything you need 24/7. 

Managed Services 

There are two lists of services to consider when it comes to Managed Services. 

  1. Permission to Play Services 

These are the standard services every MSP should offer. A good list includes the following: 

  • Remote Support 
  • Remote Desktop Sharing Assistance 
  • Onsite Support, as needed 
  • Help Desk Phone Support 
  • Office & Mobile Phone Support 
  • Network Administration 
  • BDR (Backup Disaster Recovery) 
  • Software & Security Updates 
  • SPAM control 
  1. Real Managed Services Providers Also Include 

Good Managed Services providers go above and beyond this list to include: 

  • Parts Replacement 
  • Vendor Management 
  • Hardware Replacement 
  • Software Updates 
  • Technology Consulting 
  • Compliancy 
  • Cybersecurity:  
  • Intrusion Prevention 

Managed Services Costs 

If you've looked at hiring a Managed Services Provider before, you may have experienced sticker shock when they quoted you the price of their monthly service agreement. Especially if it included all of the above at a flat rate. However, if you examine the benefits of a monthly agreement you'll see that it will work well with your business plans and help take your company to the next level without the unexpected costs of break-fix or the added costs of hiring a staff person. 

There's A Problem in the Industry Today 

However, there's a problem in the IT support industry today. When offering Managed Services, some people say they'll cover everything with a 'flat rate.' Then, they end up sending you a bill at the end of the month for drive time, after-hours service, or parts. They may have promised you a clear-cut agreement, but then nickel and dimed you to death with a pile of invoices. It doesn't sound much different than a break-fix arrangement at that point. With Managed Services, you should be able to budget for a set monthly rate. As you look for a Managed Services Provider, make sure you ask about the things not included in their 'flat-rate' offer. You need to know if you're about to be nickel and dimed or if you're working with a quality Managed Service Provider. 


We consider ourselves one of the good guys. We will work with you to define your needs and formulate a plan to address them. Our goal is to take IT distractions off your plate so you can focus on your business. Consider us your business growth partner. For more information, please contact us any time. 



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