As an MSP, growth and profitability are always top of mind. But how you structure your customer base can make a big difference in how you scale. So, here’s the question: Would you rather have 10 accounts with 5 users each or 2 accounts with 25 users each?

On the surface, the total number of users is the same—50. But the way those users are distributed can significantly impact your operations, support workload, revenue stability, and overall profitability. While managing fewer, larger clients may seem more efficient, the reality is that winning, supporting, and keeping them is more difficult than managing a diverse base of smaller clients. Let’s break it down.

The Case for 10 Accounts with 5 Users Each

Pros:

• Diverse Revenue Streams – Losing one small account won’t drastically affect your business.
• More Market Reach – A broader client base means more opportunities for referrals and cross-selling.
• Higher Potential for Growth – There are over 3 million small businesses to sell to, and each one can expand over time.
• Lower Competition – Small businesses rarely have internal IT teams and typically rely on external MSPs for support.
• Higher Profitability – Small businesses have fewer options and less purchasing power, meaning they tend to pay more for tech services.
• Stronger Business Relationships – Smaller clients often view MSPs as strategic partners rather than just vendors.

Challenges:

• Higher Administrative Workload – More accounts mean more invoices, varied support tickets, and increased operational complexity.
• Varied Client Needs – Standardizing solutions can be difficult when working with many different businesses.

The Case for 2 Accounts with 25 Users Each

Pros:

• Streamlined Management – Fewer accounts mean simpler billing, hopefully fewer support requests, and managing relationships easier.
• Higher Per-Account Revenue – Each client brings in a larger, more consistent revenue stream.

Challenges:

• Revenue Risk – Losing one of these accounts could mean a significant financial hit.
• Lower Potential for Growth – There are only about 300,000 businesses with 20-30 employees, and they tend to expand at a slower rate.
• Limited Market Reach – A small client base means fewer opportunities for referrals and cross-selling.
• High Competition – These businesses often have internal IT teams and multiple decision-makers, making sales cycles longer and more complex.
• Lower Profitability – Larger businesses have more purchasing power and tend to negotiate lower rates for services.
• Transactional Relationships – Unlike smaller businesses that rely heavily on their MSPs, larger clients often see them as vendors rather than partners.

So, What’s the Right Answer?

If you’re a large MSP (20+ employees), you may have the resources to take on the challenges of managing fewer, larger clients. However, if you’re a small MSP (5 employees or fewer), targeting smaller accounts provides greater stability, higher profitability, and more growth opportunities.

At D3 Unified Communications, we help MSPs scale profitably by providing white-label UCaaS solutions that fit businesses of all sizes. Whether you focus on small businesses or larger organizations, our platform ensures easy management, high margins, and seamless integrations.

How is your business structured today? Would you rather manage more small accounts or fewer large ones? Let’s discuss how we can support your growth strategy.