Chris Wiser breaks down MSP pricing: charge $300 per user for standard services, or price at 5 times your cost of goods sold to hit healthy margins. Most MSPs undersell by reselling hardware and software alone at 16% margins instead of bundling services for sustainable profit.
Questions this video answers
$300 per person
5× (five times) cost-of-goods-sold, including labor
Every Tuesday
Okay, so now we're going to talk about how to price a deal, right? So it turns out there's a couple of different ways to price a deal. So I'm going to give you the Chris Weiser, no thinking model for pricing a deal. Now. Now, Chris. Chris gives me a hard time for saying that he might, but. Except he won't. I know he won't because he really believes in this. So when you start with Elite, or maybe you haven't started with Elite yet, but when you start with Elite and you come into the program, we want to simplify things so you can be successful. And it turns out we've been around the block a few times, so we roughly know what your cost of goods sold are. Now, sure, you could be doing something crazy and maybe not so profitable, but for most people, for most people, if you charge $300 per person, you're going to come out with an appropriate level of profit, okay? So if you need an easy cheat code for how to price your stuff, count up the number of heads, multiply by 300. But whatever you do, do not do this with the client. The first 30 seconds you meet them, do not do it with the client. When they say, how much is this going to cost me? Say, you know what, we need to do some analysis and figure this out. Nobody likes a smarty, right? You want to really kind of build rapport and understand what's going on in the business. Because you know what? $300 is the bottom, it could be higher. What if you do hardware as a solution? Right. There's a lot of things you could do that can drive the price around. But if you need a simple cheat code, $300 per person without projects, all in C price for all the normal stuff that's in your full cyber security stack. Now, raise your hand if you're an advanced student. Are you an advanced student? Better yet, raise your hand if you're one of Those people like Mr. Spock on Star Trek, you, like, want to know all the details, right? Okay, so here's the way it works. If you want to know all the details, and we get into this a lot in trailblazers, business mastery. But what you do is you take all of your cost of goods sold, including your labor. Including the labor, and you multiply by five, baby. And the reason you multiply by five is because you've got to charge a big enough chunk of money so it will cover all the places where you lose money, right? So I'll give you an example. Are you really paying yourself Enough money because if your price is too low, you won't be paying yourself what you're worth. Okay? So this is why you really have to look at pricing and say, you know what? I have got to price my service at a level where I'm a going concern. I've got to price my service at a level where I'm making enough profit so I can hire the right people, so I can do the marketing that I need to do so that I can, I can invest in scripts and doing things to improve my automations. Right? If you cut it too thin, you might as well be an Amazon reseller. Right? And if you're only selling hardware and software, then you've decided for whatever reason that you want to be in a world where you're only making at best, maybe say 16%. But when you take hardware and software and service and you add it together in a beautiful bundle, you're now in an 80% gross margin business. So which kind of business do you want to be in? And it all starts with how you price your service. So, quick quiz. What's the easy way to price your service? $300 per head. What's the better way to Price your service? 5 times your cost of goods sold so that you make an appropriate profit to invest in yourself and to invest in your business. So you want to know more about these kinds of things, these sort of like what I call Jedi mind tricks for running your msp. Then go down here and either watch some more videos or take that big step. You know you want to do it. You want to. Yeah, you know you want to do it. Take that big step and click the button that says book a call and I'll see you in sales onboarding on Tuesday. Every Tuesday. I'm there like a clock I never miss. Every Tuesday. We'll get there. We'll get you a sales upgrade goal and we'll get you working on building the business of your dreams. Oh, hey, thanks again for watching. And don't forget, subscribe, baby. Subscribe, subscribe. We'll see you later.
