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MSP Business | February 13, 2018

Are You Running a Lifestyle MSP Business?

MSP BusinessOperating an MSP business is never an easy process, as it requires a lot of hard work and dedication. Nevertheless, there are two distinct types of IT providers that operate with completely opposite philosophies. One is considered a lifestyle company, while the other is a scalable company. Understanding these different styles can help you identify which one is the most similar to your IT company and if you need to make any changes. The following paragraphs will explain the difference between the two and which one is the better option.

What is a Lifestyle Company?

A lifestyle company is created to sustain a certain level of income for the owners and isn’t designed to grow on a continual basis. While some of these IT companies are still highly successful, they severely limit any future earnings because they’re satisfied with meeting the status quo. Typically, this type of IT provider is the investment of one person, and they’re happy with sustaining their lifestyle but are not interested in expanding into new territories. While they may benefit from the success of the company, they’re severely limiting future growth, as they don’t properly invest their finances into the organization. A lifestyle company is usually funded by a bank, which limits any equity investment. Many of these companies are unable to succeed once the owner has passed away, as they’re built on a flawed philosophy that doesn’t support growth or improvement.

What is a Scalable Company?

On the other hand, a scalable MSP business is designed for growth and is not limited by individuals. These IT businesses are built with specific practices and procedures that enable the company to run smoothly at all times. Typically, they can service a wide range of clients and are not focused on one particular type of customer. This flexibility allows them to meet the ever-changing technical needs of businesses and enables them to experiment with cutting-edge technology. Funding is also different, as scalable companies focus on venture or angel financing, which allows them to grow at a natural rate without any limitations.

Which is the Best Option?

As you can see, both styles are vastly different from each other. Many managed service providers are considered lifestyle companies, but they’re not projected to experience any substantial growth. Working for a lifestyle organization may not be in the best interests of an employee that’s concerned with promotion or long-term employment or has a desire to help a business grow. On the opposite side, a scalable company will continue to experience extended amounts of growth and is not limited to one individual. A scalable IT company offers a substantial number of benefits for anyone interested in expanding to new clients and is projected to last much longer than an IT company that uses the lifestyle business model.


An MSP business is much more likely to be successful with the use of a scalable model. Fortunately, it is never too late for a lifestyle company to transition into the scalable business model. Creating a process that focuses on growth and improvement is the first step in transforming a lifestyle IT company into a profitable business that can last for multiple generations. Learning how to cut back from a luxurious lifestyle and reinvesting the money into the company can help it experience significant amounts of growth and ultimately allow your business to become much more profitable. Don’t wait any longer— begin transitioning your IT company from a lifestyle company into a scalable business and start experiencing levels of success you’ve only dreamed about.

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