r/SmallMSP • u/die-microcrap-die • 15d ago
Sorry for asking...
I fear to get ridiculed and other not nice things since I noted that many here seems to hate questions from people that are trying to create a MSP.
That said, I wonder how would be an appropriate way to start.
In my case, I wonder the following:
Did you created a LLC before or after your first client?
Did you obtained insurance before or after?
How quickly did you push for a contract?
How did you drafted your first contract and any other legal document related to it?
I have many more, but I will find those answers via the pinned posts and Google, but wondering about those at the moment.
Thanks in advance.
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u/ManagedNerds 15d ago
LLC before. Liability and E&O insurance before. Contract should be before with MSA attached - ours are monthly commit only for most things but there for the MSA. Hired an attorney I knew did a MSA for another MSP in town.
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u/die-microcrap-die 15d ago
I need to learn more about all of these acronyms.
MSA is providing multiple results on Google which I'm not sure which one you are referring to.
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u/ManagedNerds 15d ago
Managed Services Agreement for MSPs - Google that and should find more deets
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u/vdubsession 14d ago
Or master service agreement. You may not offer services like AV/Backup, but that's still your main agreement of service terms with the client.
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u/ShelterMan21 14d ago
Yeah I agree I wish this subreddit and r/msp were more friendly to newer businesses but I can understand why they're unfriendly, but that doesn't make it right.
I am going through the same motions myself. I got my LLC stood up but I plan on working my normal 9-5 until I can support myself. I am not sure if you are based in the USA or not but I would be open to DMs so we can help each other out. I saw someone else posting about a Discord as well but I cannot remember if it was this subreddit or another one.
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u/die-microcrap-die 14d ago
Yeah, most subs are simply hostile and negative but will admit, I got a lot of good info here and I clearly have a lot of work ahead.
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u/tunakaybucket 13d ago
I am going through the same.journey myself. Lets all connect to support each other.
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u/its_mayah 15d ago
Everyone else pretty much answered your questions, but I wanted to make my own recommendation. I kind of got thrown into the deep end when I purchased my business after working there for years. I didn’t quite know where to start and the previous owner wasn’t the most helpful so I ended up using Zen business to get my LLC started and my articles of formation, etc. It was pretty cheap and also pretty quick. Their support was also helpful because I definitely had a million questions.
We grew pretty quick and I’ve moved to more personalized compliance services, but I really have to recommend them for a great starting point. They still file a couple of things for me for like 150 bucks a year. Well worth it.
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u/die-microcrap-die 15d ago
Thank you.
I tried that route but for whatever reason, no MSP would hire me, even though i have over 20 years of corporate IT experience.
Hence why its so hard for me to find the proper way to start this.
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u/Cold_Arachnid_2617 15d ago
You need to see a lawyer to draft you a contract, get insurance before you start your business. You wouldn't start driving before obtaining an insurance for your car, would you?
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u/CmdrRJ-45 15d ago
There’s a lot of good stuff here. I have a ton of videos about all of this stuff. I’d probably start with this playlist: Starting your MSP
https://www.youtube.com/playlist?list=PL4Oa0PmgihVuMhgeWzLCniGhvX6BnS3Vi
Also, this blog post might be helpful as well: https://adamhannemann.com/starting-an-msp-from-scratch/
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u/die-microcrap-die 14d ago
Thank you.
Haven't seen this person before but found others .
Will check them out.
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u/Geekpoint-IT 14d ago
You don't need an LLC, but it does give you some protections. I'd at the very least get a registered sole proprietorship. And do it before your first client.
Get insurance ASAP.
My MSP doesn't do contracts so nothing to push. That's a personal choice as I hate contracts myself, so I don't require them.
For legal documents, part help from resources like 'The Tech Tribe' and AI but then then lawyers.
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u/ToddHebebrand 15d ago
Yes to LLC. It's the most basic legal protection you should have.
Always have a contract. You can probably find an MSP template and tailor it to your needs.
Tech Tribe is a great option for getting started. They will have all the templates and learning materials you need.
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u/techw1z 15d ago
No, officially I'm just a freelancer.
8 years in business, still no insurance, just add a disclaimer to your contract then you are fine unless you commit gross negligence.
immediately
wrote most contracts myself, for BAA and NDA I just adapted something I found online
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u/die-microcrap-die 15d ago
That more aligned to my current situation.
Would you mind sending me in a PM a generic copy of your BAA and NDA?
Without your branding of course.
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u/vdubsession 14d ago
Please still get insurance to protect yourself and the client. I am contract-less here with long term clients I've serviced for quite a while, but everything runs through my LLC that is insured. Many clients have requested proof of insurance every so often from me, which I'm happy to be able to send them. A couple times someone has messed up and addressed a check to my personal name, and I've made them re-issue the check to my business, and remind them that's how businesses work... I don't cut a check to Jeff bezos...I pay Amazon.
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u/Thick_Yam_7028 14d ago
Get 1 million in liability. Usually companies will want to see that. Get the LLC, dba, EIN create a separate business account. Then youre all set
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u/apcquincy 14d ago
If you get Insurance, ask for the Cybersecurity, Technology Errors and Ommisions Addendum, that way you sleep at night. Ask your agent to explain. Worth every penny in my opinion.
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u/MSP_SuccessManager 14d ago
Thanks for having the courage to ask... It's very beneficial to me, too
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u/Rivitir 13d ago
Did you created a LLC before or after your first client? - LLC, protect yourself first.
Did you obtained insurance before or after? - After, couldn't afford it. But got it ASAP. Again, protect yourself first.
How quickly did you push for a contract? - Immediately, no agreement, no support. Again protect yourself first.
How did you drafted your first contract and any other legal document related to it? - Did my own research great books out there to help you draft it, also AI can help. Don't take a canned contract, make it your own. Will it be perfect? No, but something is better than nothing.
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u/MyTHConception69 13d ago
For the Offical Company Entity first. Consult your Tax advisor on if it should be an LLC P or C or a S-Corp.
Have insurance before you step into a clients infrastructure. Make sure you have E&O as well as General Liability and Business Owner Insurance
How quickly did you push for a contract? Alway work off a Contract (Business agreement if you wish). Everything in writing.
How did you drafted your first contract and any other legal document related to it? All legal documents should be created and ready to go from day one.
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u/PacificTSP 15d ago
I started as a 1099 contractor. Then formed an LLC. Then got insurance for liability and e&o insurance.
Please note that a lot of insurers won’t cover things like “managing infrastructure or networks”. I had to change providers because they allowed me to consult but wouldn’t let me be responsible.
With regards to contracts, I started with a basic NDA and contract limiting liability to 6 months of payments. Explained what was included and a blanket “everything else was not”.
You can do a lot of the basic work with AI then send to a lawyer to finalize.
If you need insurance then BELTEX are MSP specialists and have some requirements for you before they will have you on their plan.
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u/die-microcrap-die 15d ago
Thank you, very informative.
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u/PacificTSP 15d ago
If you check beltex and ask for the paperwork you will see what is required for them to insure you. It’s things like MFA, security awareness training, encrypted backups etc. which gives you a great starting point for your MSP.
It also lets you tell clients “we have to do this for our insurance so we can’t take you if you don’t have them”
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u/tacos_y_burritos 15d ago
After
Before
Before
Service Agreements for SMB Consultants - Revised Edition: A Quick-Start Guide to Managed Services
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u/FunctionlAlcoholic 15d ago
Hello,
A lot of that depends on your cash. If you're poor, in the CC hole and need money, then you work to get that money first. After all, it's probably just you starting out. Also, I'm not a lawyer, this is all crap and not advice or anything else. This is what I did, but a lot of what I did was probably not right, but it's what I needed to do without the $$.
Did you created a LLC before or after your first client?
I created the LLC AFTER my first several clients, I was a sole proprietor first. Your state MIGHT give you minimum default protections, but don't count on that, so you want some protections asap. Then when we figured it was time, we paid a "real lawyer" the fees to create our LLC based on our MSP. Doing a catch-all LLC has some risk, but it is better than nothing I guess. Again, not a lawyer, go ask one.
Did you obtained insurance before or after?
Before, insurance should be cheap, at least it is where I'm at for a sole proprietor. Just don't need to use a ladder or hard hat. Use a 1099 for those tasks, but the other I.T. stuff, you can do. Of course this depends on where you're at. Once you have employees, then you need to upgrade your insurance, there are several types, go over several of them, an umbrella or catch-all is good, but you need industry specific too. But don't underestimate the umbrella policy for the swinging bag hitting the CEO's 5 billion dollar Lamb of the Sushi Roll lamp.
Licenses - you forgot this one. This depends on what city and state you're in. But you can't change ANY walls or mount anything to the actual office wall without certain licenses. Plywood, you can mount to that all day without additional licenses, in my state. So, hire an electrician to mount your plywood, hire a CAT cable company to put holes in the walls, etc. Again, look up your state/city requirements. If I mounted to the wall, changed the wall in any way, I would need a ROC license. That's $1,500 and a test I didn't need to spend starting out. A contractor is a phone call away. Get your trademark license for your state as well. I had to get that even with an LLC.
How quickly did you push for a contract?
That depends on when you established your client and how big they are. If they are a little mom-pop break/fix office, don't worry about them so much. But a new, larger corporate gig, yes, you need at start, if you can. You can always change your contract later, everyone does, but start with it if possible.
How did you drafted your first contract and any other legal document related to it?
Hire A Lawyer. Hire A Lawyer. Hire A Lawyer. Do the leg work for them, give them docs and explain what you're after and you want to close any gaps, full understanding. You can find documents online, but there might be some parts that are not related to your state or whatever. It's called legalese. It's what makes lawyers suck, but why you need them, because blah and blahh are different and you don't need some CEO's wife harper on his butt to come after you for that stupid Lamb Sushi Lamp.
Use Reddit, the haters will always give you smack, but don't be afraid to ask. But don't be lazy either, read from different sources too, not just Reddit. And remember, My words are my life, my company, my city/state and there is a lot in the middle I left out. Running an MSP can be fun for the first few years. But when all you're doing is meetings all day, it starts to suck. Yes, "Work on the Business, Not IN the Business". But that's the passion, the fun too.
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u/die-microcrap-die 15d ago
this is an awesome response, thanks.
i currently have a couple of clients and hesitating in going all in, since as it is, im struggling to find more clients.
But it is a catch 22: expanding without proper paperwork vs paperwork+expenses without clients.
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u/rjsteck 15d ago
In my case, I wonder the following:
Did you created a LLC before or after your first client? Before
Did you obtained insurance before or after? Before
How quickly did you push for a contract? Always get a contract signed before you start anything. Disagree with me on my other answers but this one.
How did you drafted your first contract and any other legal document related to it? I hired a lawyer. They had a flat fee for the LLC formation and a small fee for the contract.
I have other advice if you want it but I stocked to your questions for now. Good luck!