EP.63: Building a Better MSP: 15 Lessons from the Owner’s Seat, Part 2: Whale Clients, Toxic Accounts, and Systems Before Software
A full service desk and healthy revenue can hide an uncomfortable truth: your MSP might be growing without becoming stronger. One client holds too much influence. Your team supports too many variations. Important conversations happen only when something goes wrong. Over 30 years building and scaling Australian MSPs, Nick and I have learned that these problems rarely arrive dramatically. They accumulate through decisions that seem reasonable at the time. We accept an exception, postpone a difficult conversation or buy another tool, then wonder why the business feels harder to run. In this episode of MSP Mastery Podcast, we continue our Building a Better MSP series with Brendan Rose. Our discussion explores five lessons about client relationships and operational foundations. Brendan’s experience reinforces something we have learned ourselves: sustainable growth requires deliberate choices about what you accept, how you communicate and where you invest your resources.
MSP Mastery
11/2/20265 min read
A full service desk and healthy revenue can hide an uncomfortable truth: your MSP might be growing without becoming stronger. One client holds too much influence. Your team supports too many variations. Important conversations happen only when something goes wrong.
Over 30 years building and scaling Australian MSPs, Nick and I have learned that these problems rarely arrive dramatically. They accumulate through decisions that seem reasonable at the time. We accept an exception, postpone a difficult conversation or buy another tool, then wonder why the business feels harder to run.
In this episode of MSP Mastery: Ctrl Alt Deliver, we continue our Building a Better MSP series with Brendan Rose. Our discussion explores five lessons about client relationships and operational foundations. Brendan’s experience reinforces something we have learned ourselves: sustainable growth requires deliberate choices about what you accept, how you communicate and where you invest your resources.
Understand What Your Biggest Client Really Contributes
Nick and I know how easily a large client can become the centre of an MSP’s world. Their requests receive extra attention, their priorities shape resourcing, and the thought of losing them starts influencing decisions everywhere else.
The first principle is to separate revenue from profitability. A client’s invoice total does not tell you how much value that relationship creates after labour, support demands and delivery costs.
We learned this when we lost a major client that represented roughly half our revenue. At the time, it felt catastrophic. Yet 12 months later, the business was more profitable and we were happier.
Much of that revenue had come from hardware and project work, with pressure on hardware margins. We were also providing extensive support and giving the account more attention than we had properly recognised.
The lesson was not that losing a major client is harmless. It was that we should have understood the commercial reality before the relationship ended.
Brendan reinforced the importance of maintaining a sales pipeline rather than letting a large account consume every available resource. Growth can reduce concentration risk, provided it creates a genuinely broader client portfolio.
For owners, the practical response is to understand client profitability and model the consequences of losing a significant account. Our BMW approach examines the best case, most likely case and worst case. Making those decisions calmly gives you a plan rather than a panic response.
Stop Letting Fear Decide Which Clients Stay
One of the hardest lessons Nick and I learned was that some client relationships should have ended earlier. Keeping revenue feels responsible, particularly when cash flow matters. But retaining an account that undermines your team or repeatedly rejects essential advice can carry a substantial cost.
We encourage owners to apply their core values beyond recruitment and staff management. Those values should also guide relationships with clients, suppliers and partners.
Consider the clients your team enjoys supporting. Usually, there is more than technical compatibility involved. Communication works, advice is respected, and both organisations approach problems constructively.
Brendan connected the confidence to end an unsuitable relationship with the discipline of ongoing sales and resource forecasting. When you cannot see where future work will come from, every existing account feels indispensable.
That supports our view that client selection and business development belong together. You need options, not simply the courage to have an uncomfortable conversation.
Before ending a relationship, establish whether the problem can be resolved through clearer expectations, a revised agreement or a direct discussion. If the misalignment remains, handle the separation professionally, with appropriate notice and an orderly handover consistent with your agreement.
The objective is not to punish a difficult client. It is to protect service quality, team wellbeing and the business you are trying to build.
Standardise Without Becoming Inflexible
Nick and I have experienced both extremes of service design. Early on, almost everything was bespoke. Later, Nick pursued a much more rigid approach to standardisation and found that selling the ideal service agreement was not always straightforward.
Our position now is practical: know your ideal client and service model, but distinguish between a planned transition and an unmanaged exception.
A client does not necessarily need to reach your preferred operating environment immediately. However, your team needs to understand the destination, the journey and the commercial implications.
Brendan illustrated this with an MSP trained around Microsoft taking on a Google Workspace environment. The opportunity might be worthwhile, but unfamiliarity creates extra work. Without training and a deliberate commercial decision, the account can become a distraction rather than profitable growth.
The same principle applies to your tools. Nick described how responding to individual client needs eventually left us supporting six backup solutions. Each decision had a reason. Collectively, they created complexity.
Every additional variation needs to earn its place. Consider training, documentation, billing, support coverage and the effect on consistent delivery.
Standardisation should make the business easier to operate and the client experience more dependable. It should not become an excuse to ignore sensible opportunities. The difference is whether you have consciously planned the exception or simply said yes.
Make Communication Part of Service Delivery
One of our strongest lessons is that silence does not mean satisfaction. A client who is not complaining may still be questioning your value or discussing another provider.
Nick experienced this after stepping back from being the main contact for everything. Operational meetings continued, but the senior decision maker was no longer meaningfully engaged. By the time he secured that conversation, the client had decided to move.
Regular contact alone was not enough. We needed contact with the right people.
Our approach developed into separate operational and strategic conversations. Service coordinators could discuss outstanding issues with the people managing daily activity. Strategic reviews focused on business challenges, priorities and the technology roadmap.
Brendan reinforced that an operations or service delivery manager should not wait for a scheduled review to acknowledge unresolved problems. If your team knows an issue is dragging on, the client probably knows too.
We saw this during a winter period when illness reduced our staffing and tickets accumulated. Clients asked why we had not told them. Some could have delayed less urgent requests if they had understood the situation.
We introduced proactive messages using tools we already had. The improvement was not a new technical capability. It was giving clients context before frustration escalated.
Build a communication rhythm that suits the relationship, assign responsibility and make sure senior stakeholders remain connected.
Build the Process Before Buying the Software
Nick and I understand the appeal of a promising new tool. We also know that subscriptions and incomplete implementations can accumulate long before anyone stops to assess their value.
The starting question should always be: what business problem are we solving?
Before automating anything, agree on how the process should work. If every person follows a different method, software will not resolve that disagreement. It may simply reproduce it faster.
Nick made this point about AI tools in this episode. They can help build a solution, but they still need a clear process and intended outcome.
Brendan’s recommendation was to develop a business case covering the expected benefit, what the tool replaces, implementation effort and measures of success. That includes removing the old platform rather than paying indefinitely for both.
For us, quarterly planning created an important boundary between exploring an idea and implementing it across the business.
Ownership matters just as much. We developed product champions, supported by a second person, and included that knowledge in our skills matrix. This gave staff a clear place to seek help without making expertise dependent on one individual.
Regular subscription reviews then help confirm that each tool remains useful, appropriately licensed and supported by someone accountable for it.
Build a Business You Can Lead With Confidence
The thread connecting these lessons is deliberate management. Understand your client economics. Choose relationships that fit. Control unnecessary complexity. Communicate before problems escalate, and establish the process before introducing another platform.
Nick and I have learned that a better MSP is not simply a busier one. It is a business whose decisions support profitable growth, reliable delivery and a team equipped to succeed.
If these patterns feel familiar, reflect on where your business needs more clarity. Connect with Nick, me and the MSP Mastery team to continue the conversation about building an MSP that works better for you, your people and your clients.
