CEO Growth & Profit: Tracking your Financials the way the Top Performers Do
In any business, there is a primary need to generate enough gross margin dollars to cover overhead expenses, and to contribute to the bottom line so that the business can grow. In the Managed Service Provider (MSP) space, service gross margin is the most important component of that overall profitability.
While product gross margin is important, it typically only makes up roughly one-fourth of the total gross margin dollars that an MSP generates. Services on the other hand, tend to produce a higher and more reliable stream of gross margin dollars. Despite the stickiness of the service business, it is also riskier. This is primarily because if you fail to sell enough services, you still have to carry those high service labor costs that do not exist in product-centric businesses.
Since service gross margin is the most important aspect of an MSPs profitability, it goes without saying that accurately measuring and optimizing it is a foundational best practice. And to improve your financial performance, you'll need to adopt an accounting setup that gives you greater visibility. Doing so enables you to see what is happening in the business, take remedial action as needed, and see if your actions are having the desired effect. Unfortunately, most accounting systems are not set up to measure Service businesses usefully and they do not, by default, provide the level of visibility MSPs need to see what is really happening within the company.
In Tracking your Financials the way the Top Performers Do, Rob Bufano, the Service Leadership Solution Director with ConnectWise, shared how top performing MSPs set up their chart of accounts to obtain the granularity they need to measure and optimize their gross margin. Rob focused not only on the 'why' but the 'how to' for gaining better visibility and control of your financial performance. If you missed this CEO Growth & Profit webinar, no worries! You can always watch the recording, shared below, at any time!
What you'll learn by watching this webinar:
- How the best-in-class, median, and bottom 1/4th of solution providers are performing financially
- How to use the Sales and Service multiple of wages successfully
- Benchmarking methodology by predominant business model
- How you can identify your predominant business model
- Setting up your chart of accounts to have a useful profit and loss statement
- Why a correctly designed Chart of Accounts is so important
- How to use your financials to create your budgeting and forecasting
- Tying your financial tracking back to operational maturity level best practices
If you haven't tuned in to the CEO Growth & Profit series yet, the Partner Success team has combined forces with Service Leadership to bring MSP owners, CEOs, and executive leadership teams loads of valuable content across 10 webinars. This series is dedicated to helping you quickly determine how you're performing on the biggest financial drivers in your business. Taking it a step further, this series also provide practical guidance on improving sub-optimal business practices by adopting the proven methods of best-in-class.
Check out all of the webinars in this series:
|CEO Growth & Profit Topic||Date/Time||Expert||Register/Watch Now!|
|Making Service Profitability Decisions the Way the Top Performers Do||August 3rd, 1pm Eastern||Paul Dippell, Founder, Service Leadership||https://bit.ly/service-profitability|
|Making Sales Investment Decisions the Way the Top Performers Do||August 25th, 1pm Eastern||Rob Bufano, Service Leadership Solutions Director||bit.ly/sales-investments|
|Tracking your Financials the Way the Top Performers Do||September 22nd, 1pm Eastern||Rob Bufano, Service Leadership Solutions Director||bit.ly/tracking-financials|
|Key to Success: Knowing your Ownership Mode||October 12th, 1pm Eastern||Brad Schow, VP, Consulting Services, ConnectWise||bit.ly/ownership-mode|
|Getting to Goal: Knowing your Value Creation Strategy||November 16th, 12pm Eastern||Brad Schow, VP, Consulting Services, ConnectWise||bit.ly/value-creation-strategy|
|Getting to Goal: Putting your Value Creation Strategy into Action||December 7th, 1pm Eastern||Brad Schow, VP, Consulting Services, ConnectWise||bit.ly/value-creation-action|
|Foundational Excellence: Choosing your Target Customer Profile||January 12th, 2pm Eastern||Peter Kujawa, VP, Service Leadership & TSP Evangelist||https://bit.ly/target-customer-profile|
|Foundational Excellence: Driving Technology Standards||February 15th, 11am Eastern||Peter Kujawa, VP, Service Leadership & TSP Evangelist||https://bit.ly/technology-standards|
|Foundational Excellence: QBRs as your Scale Engine||March 16th, 1pm Eastern||Peter Kujawa, VP, Service Leadership & TSP Evangelist||https://bit.ly/QBRs-scale|
|Foundational Excellence: Pricing and Packaging||April 20th, 1pm Eastern||Rob Bufano, Service Leadership Solutions Director||https://bit.ly/pricing-packaging|
To sign up for future episodes in the CEO Growth & Profit series or to watch previous webinar recordings, use the links above or visit our webinars page. Make sure to keep an eye out for additional emails and in-app invites from us, and follow @BrightGauge on Twitter for updates.
We highly suggest you RSVP to each webinar now! Even if you can't attend the live webinar, we’ll still email you the recording.
As always, we love your feedback and your questions, so shoot our success team an email any time!