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Give me three moves
IT support and managed services

We run a small MSP and our per-user pricing no longer covers what we actually deliver — how do we fix it?

Short answer

Separate pass-through licensing from your service fee and stop absorbing vendor increases. Most small MSPs quietly swallow annual Microsoft and security-vendor rises to avoid a conversation, which permanently rebases their margin downward every year. Licensing should be billed as a distinct line that moves when the vendor moves, leaving your service fee to be negotiated on its own merits.

Absorbing a pass-through feels like good client service and is the single most damaging pricing habit in the sector. Each absorbed increase becomes the new baseline, so the margin never recovers, and after three years the contract is structurally unprofitable with no single decision to point at.

The second leak is seat drift. Agreements are written for a headcount and clients grow into and past it without the contract being revisited. Check active seats against the contracted number — it is common to find a client at 40 seats on a 25-seat agreement.

Scope drift is the third. Security expectations have expanded enormously — MFA enforcement, EDR, phishing simulation, compliance evidence — and most of that arrived into existing agreements without a corresponding fee change.

Pass-throughs are also the easiest increase to defend precisely because they are not yours. Showing the vendor invoice makes the conversation arithmetic rather than negotiation, which is why they should never be buried inside a blended rate.

Want this worked out for your business specifically?

Everything above is the general case. Describe your business in one sentence — what you sell, roughly how many customers, roughly what you charge — and you will get three specific moves back, each priced per month with the arithmetic written out so you can substitute your own figures.

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Give me three moves

People also ask this as

  • How should an MSP price per user per month?
  • How do I raise MSP prices without losing clients?
  • MSP margin shrinking due to licensing costs

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Figures are typical ranges for small businesses in the UK, US and Canada, given so you can check them against your own books rather than take them on trust. They are arithmetic on stated assumptions, not a forecast, and not financial advice.