MSP ROIs Don’t Matter

Fairly recently, MSPs have taken to touting their ROI. Admittedly, we ran with this fad as well. At one time we even had an ROI calculator available to users on our site. It wasn’t very popular as it was very rarely used. And once we pulled away from the trees, we saw the forest for what it was. We were offering people a tool they didn’t need, a calculator for numbers they didn’t have. Genius!

So, the question is, is ROI truly irrelevant? No, not at all. But it becomes irrelevant when there is no value to the metrics being evaluated. Say for example, you want to know the return on your investment on a property you intend on flipping. Those numbers are easily calculated. Cost of acquisition plus any rehab deducted from the resale price and there you have your ROI. But property is tangible and routinely measured. Services do not get the same treatment. And certainly, there are some ancillary benefits to many services that are not considered as they were not the direct goal. For example, when hiring a bookkeeper, while your accounts receivables are attended to, and your accounts payable dealt with, the expertise they bring may carry additional benefits. They may bring insight into a better insurance policy or improved employment practices where your company can maximize your hiring dollars. Each of these can be difficult to measure, but certainly not impossible.

The truth is that most small businesses don’t spend a lot of time measuring. This is why, in effect, our ROI calculator was a waste of web space. Asking individuals to put an estimate on how much money they lost per hour of down time was a bit much because we were not only asking them to mentally calculate the approximate hourly wage (total burden) of each employee, but their rent, utilities and potential loss in sales. Those numbers are on a spreadsheet for most Fortune500 companies, but not many outside of that. And honestly, they don’t really need them. A small business owner will tell you from experience what works and what doesn’t. Where the benefits lie for them and what doesn’t make much difference to them. They have a certain expertise and the successful ones know to look for others with expertise they can use to give them the results they want; and they may not come in the form of ROI.

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