4 Big Risks to Your MSP Business: And Candid Tips to Mitigate Them

by Team Ninja

Owning an IT business isn't for the faint of heart. Risk naturally comes with the territory, but according to successful MSP veterans, owners can do several key things to mitigate their MSP risk and give themselves a foot up over the competition.

Instead of preparation and proactivity, many businesses find themselves where quick reactions to risks that arise are the only way forward—business whack-a-mole, for lack of a better term. 

In this MSP Live Chat, our panel of IT pros included Tom Lawrence, MSP industry veteran, longtime owner of Lawrence Technology Services, and influential voice on Youtube in the IT and MSP space, as well as Georg Dauterman, a fellow MSP veteran, CISSP, and President of Valiant Technology.

The panel dissected some key risks MSPs face, offered real-world experiences and candid conversations about the most significant risks facing MSPs today and how best to mitigate them.

In this recap, we'll share the whole recording and offer easy-to-skim moments from our panel's conversation on MSP risk. Jump to your section of interest below:

What Are MSP Live Chats?

We launched the MSP Live Chats series to give our partners a forum to connect directly with each other and top experts in the channel. These sessions aren't about being talked at or presented to — they're fully interactive and built around active participation. So come join the discussion!

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Full Recording

4 Top MSP Risks — And Tips to Mitigate Them

1) Losing your biggest customer

As the classic saying goes, don't put all your eggs in one basket. 

Tom Lawrence told a story of a time when he used to work in corporate at an organization that drove 92% of its revenue from Ford.  

Tom and his colleagues used to joke about this reliance on one client by saying, "when Ford got a cold, we got the flu."  

Another experience Tom Lawrence shared was around providing IT services to a local government client. Elections mean change, and sometimes that change means you'll be replaced by a more "aligned" IT service provider.

When it comes to mitigating this risk, Tom offered the following tips:

Listen to Tom Lawrence tell the whole story and share his tips below:  

2) A major security incident

You cannot 100% mitigate security risk; it's something that all businesses face. That being said, the way you respond to and communicate a major security incident to a client can be the real game-changer when it comes to mitigating cybersecurity risk. 

Both Tom Lawrence and Georg Dauterman offered great color around their experience with responding to a security incident, but Tom Watson really summed it all up by saying:


"Documentation and transparency with the end-user are the best ways to mitigate this type of risk.

Tom Watson photo


— Tom Watson, Channel Chief Advisor at NinjaOne



View the whole exchange on mitigating a major security incident below: 

3) Investing in the wrong tools

“When I talk to tool vendors, I see that shiny city on a hill, and immediately I’m like, oh yeah, we’re going to get everyone on this tool in three months. It’s going to be an awesome game-changer. And then a year later, we still haven’t implemented this tool and our team is like, what happened guys?”

Georg Dauterman


— Georg Dauterman, President of Valiant Technology



The dangers of "overtooling" are very real, and the practice comes with some severe side effects as well. From employee confusion to vendor sprawl sucking away precious dollars, the dangers of overtooling are something MSPs owners must be mindful of. 

It's essential to be mindful of the tools you bring in and ensure that every new tool serves a specific purpose for your business.

Often, MSP owners get stuck in Reddit forms that offer a list of tools that have changed their business for the better, but these tools helped their business; they could be an anchor for yours. Don't get caught handing over money month after month to a vendor you're just not using. 

The best way to mitigate this risk is to audit your tools. Tom Watson recommended an audit of all the tools you're being billed for every six months. If your team hasn't utilized a tool since purchase, it's probably time for it to go. 

View the whole conversation on "overtooling" and technology audits below: 

4) Hiring challenges and employee attrition

Hiring and recruiting, especially salespeople in a technical environment, can be challenging, but waiting too long to hire a sales professional can limit company growth while hiring the wrong salesperson comes with some potential reputational challenges you should be aware of as well. 

Sales professionals represent your company to the community at events, on webinars, and in every sales call they make. They act as the tip of the spear when it comes to your business going to market. 

Tom Lawrence shared his personal experience of hiring a salesperson who had a drinking problem. This issue then negatively impacted his relationships with members of the local chamber of commerce, so the risks are significant. 

Mitigating this risk involves building out better onboarding processes and creating transparent metrics for the salesperson to share with the business leader. 

View the full panel exchange on hiring challenges and how to navigate them below: 

In our current candidate-centric job market, don't forget about the risks of a stalled recruitment pipeline and employee burnout due to lacking staff and increased workload. Here are some resources for mitigating employee burnout and attrition: 

It's risky being a business owner

All entrepreneurs understand that owning a business, large or small, comes with risks. But the best entrepreneurs have implemented tactics and strategies to mitigate this risk putting them ahead of their competitors. 

For more content on mitigating risk to your MSP business, last year, we had Colin Knox, Founder & CEO of Gradient MSP, on to the live chat to talk about this topic at length. Check out this recap blog for his three tips on strengthening your position

Don't miss our next MSP Live Chat!

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Find out when we're hosting our next one, and be part of the conversation with your peers.

Next Steps

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