1. Establish the Company

The idea here is to take a realistic look at what it would take to stand up a local Managed Service Provider (MSP), and have that be a stream of income for you. The difficult part is having the computer knowledge, but as an IT professional, this is stuff you’ve been doing for a long time. All you really need is some key things to be able to get up and running.

The goal is not to build a Fortune-500-scale MSP, but instead build a local, functional, credible, profitable MSP that serves your local community.

Minimal Viable Company

What do you need to create a company? Well, what to do you need to create a company that isn’t going to create a big mess once you get customers and income? This page hopes to answer that and give you resources for each step along the way.

Steps to Take

There are many ways to start a business and there may be addition things you need to do in your state, but below is an opinionated take on what the barebone requirements are to be a “legitimate” business.

STEP 1: Create a Brand Name

You need to name your company. You also should, or need to, have an icon that represents your brand. This is a significant part of how your customers relate to you and remember you. With that said, this is much more difficult than you might imagine.

First, with the name, the difficulty is you probably want to have a www._________.com type of domain name, right? The trouble is that virtually all one, two, and three word combinations of all english words have already been taken. The good news is that MSP’s typically have a suffix that makes the name more unique, and therefore the domain name might be available to purchase. For example, MSP’s often have suffixes like:

• _____msp.com
• _____systems.com
• _____networks.com
• _____solutions.com
• _____technologies.com

That’s not an exhaustive list, but gives you some ideas to go from.

Using your name

You can do something based off your name like johndoesystems.com, but that will limit you and make you sound like a very small, one-man shop. Even if you are right now, that’s probably not the impression you want to give.

Using your initials

You can do something based off of your initials like jmdnetworks.com, which is better because the JMD could stand for anything. If your company grows to cover multiple cities and multiple locations, then this name scales.

STEP 1a: Get a Logo

If you are the creative type, use tools like Canva or the now-free Canva Affinity. This is not sponsored, it’s just that Adobe is such a terrible company that it brings glee to see a competitor make a dent! Affinity is noteworthy because it does everything that Photoshop Elements does, but a lot of regular Photoshop does too like working with vector graphics in addition to raster graphics.

The alternative is to pay the $10 to $30 on Fiverr and have a graphic artist create you a logo. Generally speaking you want a few things:

1. A logo that works with light or dark backgrounds OR a dark and light version of your logo
2. A square-shape “icon” and a short+wide “logo” that include the icon and your name

If you have an icon and logo, in dark and light modes, that’s all you will need for your website, social media platforms, mugs, pens, etc. too.

STEP 2: Get a Domain Name

The pattern for the past 20 years or so has been that domain registrars are good, then they get popular, and then they turn into terrible companies that nickel-and-dime you for everything. I am basing that on the experience of: Network Solutions -> GoDaddy -> NameCheap. Right now, CloudFlare is what I use and recommend. They tend to have the best prices (at least by a dollar or two), have free privacy protection for your “WHOIS” information, and have many, many free-tier features. You can use whomever you want, but if you don’t have a preference, go with CloudFlare.

When you pick a domain name, try to get a .com if you can. If you can’t, .net is the next best option. Avoid other TLD’s (top-level domains) like .io, .tech, .biz, etc. They tend to be less memorable and less trusted by customers. It’s not a showstopper issue, but it’s always better to have a .com if you can. You can see if a domain is available from:

https://domains.cloudflare.com/

If you have your brand name, and have found a domain name that matches it, then go ahead and purchase it. Domain names are typically $10-$15 per year.

Also see: Domain Registrars

STEP 3: Get a Post Office Box

This is technically optional, but highly recommended. When you are starting out, you probably don’t want to use your home address for your business. It can be a privacy issue, and it can also make you look less professional. A PO Box is a simple way to get a physical address for your business that is separate from your home. You can get a PO Box from your local post office for around $50-$100 per year, depending on the size and location.

Worse case, imagine that you did start making money, the information about this company is public record. A bad actor knows you have money, knows where you live, and your home potentially becomes a target. It’s better to be safe than sorry.

You can find and even order a PO Box online at:

https://www.usps.com/manage/po-boxes.htm

Note that it does not become active until you go to the post office and show your ID to pick up the keys. When I say “not active”, they have a physical blocker on the back of the box until you go in and show your ID. So, if you send mail to it before you pick up the keys (and they remove that physical blocker), the mail will get kicked back as undeliverable.

Also see: Reputation and Privacy

STEP 4: Create an LLC

Although you can operate a business as a sole proprietorship, it’s generally a good idea to create a Limited Liability Company (LLC) for your MSP. An LLC provides personal liability protection, meaning your personal assets are protected if your business is sued or incurs debt. Additionally, an LLC can offer tax advantages and adds credibility to your business.

Liability protection is important because, as an MSP, you are providing IT services that could potentially lead to data loss, security breaches, or other issues for your clients. If a client were to sue your business for damages, having an LLC can help protect your personal assets (like your home and personal savings) from being at risk. If you were just a sole proprietor, your personal assets are fair game in a lawsuit including your home, car, investments, and bank accounts.

Instead, creating an LLC is creating a separate “legal entity” that can own property, enter into contracts, and be sued. This separation helps shield your personal assets from business liabilities. Having “the company” be an LLC also means that you can add/remove owners, and you can later sell the business if you want to. In short, there is no downside, and lots of upside.

To create an LLC, you will need to file articles of organization with your state’s business filing agency (usually the Secretary of State). The process and fees vary by state, but typically involve:

• Choosing a unique name for your LLC that complies with state naming rules
• Filing the articles of organization form with the appropriate state agency
• Paying the required filing fee (usually between $50 and $500)
• Creating an operating agreement that outlines the management structure and operating procedures of the LLC (not always required, but recommended)

In the thread of privacy protection, there are some states that allow you to create an LLC without publicly disclosing the owners’ names. States like Delaware, Wyoming, and New Mexico offer this level of privacy. If privacy is a concern for you, consider forming your LLC in one of these states, but be aware that you may still need to register as a foreign LLC in your home state if you are conducting business there.

With that said, it’s little more complicated too (assuming you don’t live in those states) because you will need to have a “Registered Agent” in the state where you form the LLC. A Registered Agent is a person or company that is designated to receive legal documents on behalf of the LLC. Many companies offer Registered Agent services for a fee, which can range from $50 to $300 per year. Also, if you form your LLC in a state other than your home state, you may need to pay additional fees and comply with additional regulations in both states.

Here are the links to form an LLC in all 50 states, plus DC and territories:

In the end, you will receive a certificate of formation or Articles of Organization from your state, which serves as official proof that your LLC has been created. Then, once a year, you will need to file an annual report and pay a fee to keep your LLC in good standing.

STEP 4a: Get an IRC EIN

An Employer Identification Number (EIN) is a unique nine-digit number assigned by the IRS to identify your business for tax purposes. You will need an EIN to open a business bank account, file taxes, and hire employees. You can apply for an EIN online through the IRS website for free. The process is straightforward and typically takes about 10 minutes. To start, navigate to:

https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

The output of this is you will get a PDF of your EIN confirmation letter, which you should keep for your records. Your EIN is like a social security number for your business.

About Business Credit Worthiness

Similar to how you, the human legal entity with a Social Security Number (SSN), have a credit score that lenders use to determine your creditworthiness, your business legal entity with an EIN can start to establish credit worthiness too.

How to build business credit (brief)

• Open a business bank account using your EIN.
• Apply for vendor/trade accounts that report payments to business bureaus.
• Get a business credit card or loan and make on-time payments.
• List your business with Dun & Bradstreet (D&B) (obtain a D-U-N-S® Number) and ensure vendors report to D&B.
• Keep public records clean (no liens, judgments) and maintain consistent name/address info.

Business credit bureaus and scores

• Dun & Bradstreet (D&B) - D‑U‑N‑S® Number; PAYDEX score (1–100).
• Experian Business - Intelliscore Plus and other business credit products.
• Equifax Business - Business credit reports and scores (e.g., Business Credit Risk Score).
• FICO SBSS (used by lenders) and other specialty scoring models - used by banks and SBA lenders.

STEP 5: Open a Bank Account

In the olden days, like 5+ years ago, opening a business bank account was a pretty big deal. Not only did you have to go into a physical bank branch, but you had to bring in a lot of paperwork, and it took a long time. Also, you typically had to have a minimum deposit of $500 to $1,000 to open the account.

Nowadays, there are many really great options for online business bank accounts that make the process quick and easy. Most are free to open, have no minimum deposit, and can be done entirely online. Here are a few popular options:

• BlueVine - No monthly fees, no minimum balance, and offers a high-yield business checking account.
• Relay - No monthly fees, no minimum balance, and designed specifically for small businesses and startups.
• Novo - No monthly fees, no minimum balance, and integrates with popular business tools like QuickBooks and Stripe.
• Lili - No monthly fees, no minimum balance, and offers features tailored for freelancers and solo entrepreneurs.
• Axos Bank - No monthly fees, no minimum balance, and offers a variety of business banking products.

STEP 6: Open a Stripe Account

If you intend to accept credit cards for payment, you need a credit card processor. The easiest and most straightforward option is Stripe. Stripe is easy to set up, has transparent pricing, and integrates with many invoicing and accounting platforms. There are other options, but Stripe really stands out as the best all-around choice for small businesses and startups. It’s free to create an account, and you only pay fees when you process payments. Start here:

https://stripe.com/payments

STEP 7: Get Liability Insurance

This may be optional for you and/or you may want to delay it until you have some customers, but generally speaking, it’s a good idea to have liability insurance for your MSP. Liability insurance can protect you from financial losses in the event of lawsuits, property damage, or other claims related to your business operations. As an MSP, you may be exposed to various risks, such as data breaches, service interruptions, or errors and omissions in your services.

When looking for liability insurance, consider the following types:

• General Liability Insurance: This covers common risks such as bodily injury, property damage, and personal injury claims.
• Professional Liability Insurance (Errors and Omissions Insurance): This specifically covers claims related to professional services, such as negligence, errors, or omissions in your IT services.
• Cyber Liability Insurance: Given the nature of IT services, this insurance covers risks associated with data breaches, cyberattacks, and other cyber-related incidents.

Unfortunately, this is one of those things where you should talk to an insurance agent who can help you assess your specific risks and recommend appropriate coverage. Sometimes you might just need an “umbrella” policy that combines several types of coverage into one. With that said, these types of insurance policies typically don’t cost very much for small businesses, often ranging from a few hundred to a couple thousand dollars per year, depending on the coverage limits and your business size. So, it’s worth looking into at some point.

STEP 8: Set up Website

We already have a couple of pages on this topic. See:

• MSP - Build the Website - specific to MSPs
• Your Brand Website - more on technically building your website
• Jamstack - about different website technologies and architectures
• Public Websites - more general information

STEP 9: Set up Domain Email

Domain e-mail is the concept of having an e-mail address that matches your domain name. For example, if your domain is examplemsp.com, then your domain e-mail could be [email protected]. Having domain e-mail is important for professionalism and brand consistency. It shows that you are a legitimate business and helps build trust with your customers.

What you need is a proper domain e-mail service that allows you to send and receive e-mails using your domain name. Those can be category-level mailboxes like contact@, support@, billing@, sales@, legal@, etc. or they can be personal mailboxes like john.doe@, ssmith@, etc.

There are arguably three tiers to domain e-mail to consider, depending on what you need:

Tier 1: Cheap and Easy

Especially if you are going to have more than one domain, Migadu is a no-brainer. This is a platform that allows unlimited domains and unlimited e-mail addresses for $19/year (as of this writing), or $1.58/month! That is for the Micro plan.

So, if you your personal blog domain, and then this MSP domain, and maybe you have a third domain for a hobby, this becomes a really affordable way to have domain e-mail for all of them. Migado also supports mailbox aliasing like: [email protected] and also [email protected] too. It supports multiple aliases too like contact@, info@, support@, etc. that all go to the same inbox.

Tier 2: Reliable and Clunky

Virtually every web hosting provider offers domain e-mail as part of their hosting packages. Or they offer domain email as a standalone service. All day, every day, these are $5 per user per month, and have limitations in terms of catch-all addresses, aliases, and other features.

Or, here’s an example from NameCheap where it’s $0.99/month per mailbox, but that means you can only have ONE email address, maybe [email protected]. If you want more aliases or mailbox names, and you probably want them to feed into the same inbox, for convenience sake, then this can get tedious and expensive very quickly.

Tier 3: Professional and Smooth

If the budget allows, Google Workspace (formerly G Suite) or Microsoft 365 Business are the gold standards for domain e-mail. They offer robust features, excellent spam filtering, and seamless integration with other productivity tools.

STEP 10: Set up Social Media

TBD

Recap

TBD

These steps make your business “real” to you - which dramatically improves momentum.

Small businesses desperately need experienced, trustworthy IT help. When you show up with clarity, confidence, and the right offer, they will say yes.