Businesses making less, or nothing at all, due to the coronavirus outbreak are spending less too, and when businesses spend less their vendors—including their IT vendors—see cash flow dry up. The single most important key to surviving the slowdown, Palachuk stresses, is to preserve as much cash as possible.
“All other business strategy, everything else, is background noise,” he says.
Start by cutting hardware inventory to a barebones minimum, Palachuk continues. “Any equipment that you have sitting on the floor you need to get out of stock and off the shelves.”
Don’t have any hardware in stock because you’re an MSP? Shorten up that ticket queue. Lean, cash-preserving MSPs, according to Palachuk, will keep work-in-progress tickets at any given time to less than 25% of all tickets flowing into their PSA.
“Every open ticket in the system is inventory,” Palachuk says. “It’s either a value that we’re going to give to [customers] and deliver to them because it’s covered under managed services, or it’s an hour that we’re going to bill them for because it’s not covered.”
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