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As former MSP owners, we worked hard to craft an agreement that summarized the responsibilities of both parties, and outlined the services we would provide. But just as important was using our contract asa means of helping our business reach its full growth potential.  \nThe exciting news is that we’re taking the guesswork out of agreements for you, because in the pages that follow you’ll find a template based on the exact contract that we used in our MSP. You’ll be able to take this template, add in your logo, company name, and client’s name and change any details as it relates to your business.  \nNOTE: Before we begin, we’ve also put together a list of the most important takeaways that you need to know about why this contract works so well for any managed services business.  \nLet’s get started with those takeaways.  \n5 things to know about  \nMastering a Managed Services Agreement  \n1. Your contract should be multi-year  \nManaged services is a business focused on monthly recurring revenue (MRR) and in order to do it right, it takes a long-term commitment. At our former MSP, Compuquip, we would explain to prospects that a 3-year deal was necessary (required) because, as we explained, “it takes 6 months to get our arms around your network, 12 months to clean it up and optimize it, then 18 months to enjoy the fruits of our labor.”  \nHowever, every so often we would have a prospect who didn’t want to sign a long-term agreement. And since we didn’t want to waiver from the 3-year contract, we had to turn down good business because of a legal technicality.  \nTo help avoid the issue, we introduced a clause that they could cancel their contract with a 6-month notice. It gave the customer reassurance that they weren’t locked in forever, and gave us confidence that if we did our job right, we were going to have them around for 3 years. [See Appendix C, \\#4 in the  contract]  \nNOTE: If you have a customer who balks at the 6-month clause, then change it to 3 months. The reality is that clients would need some time to find a new service provider and make the transition. You never know when you’ll have a chance to earn their business again in the future, so don’t burn bridges over the termination clause.  \n2. Automatic renewals should be included in your contract  \nYou’ll see in the Term & Termination section that each of our agreements would automatically renew for an additional one-year period on the anniversary of the Effective Date. [See Appendix C, \\#4]  \n3. Use a fixed-fee contract  \nInstead of setting our terms based on user or device count, we loop everything into one fee, which customers love because they only have one set amount to worry about each month. In the notes, we would say,“fees up to X servers, X users, and X locations.” The number would account for a small buffer of growth room, but offer flexibility for us if the client experienced exponential growth. [See Schedule C in the contract]  \n4. Each contract should include an annual increase  \nOver a 3-year period of your contract, your expenses will rise, whether that’s due to inflation, salary increases, or other operating costs. So in each of our contracts, we include a note that “fees are subject to an increase of up to X% per year.” We typically start this rate at 5%, but that gives us negotiation room to actually end at a 3% annual increase on each agreement. [See Appendix C, \\#3-B]  \nBONUS: As you start building your MRR, this 3% increase is a huge deal- it can easily cover your team’s salary increases!  \nNOTE: From our experience, less than 10% of our clients even question the annual increase, so give it a shot and you’ll see how easy it is!  \n5. Use simple language  \nMake it easy for p","cbCaikQOM6GCpUbf","https://ap.wps.com/l/cbCaikQOM6GCpUbf","pdf",1290348,37,"English","# Proposal Overview\n## Company Name Overview\n## Support Model\n## Schedule A - Service Offering","[{\"question\":\"Why should a managed services agreement be multi-year?\",\"answer\":\"Managed services is structured around monthly recurring revenue and requires a long-term commitment to understand, remediate, optimize, and realize results over time.\"},{\"question\":\"What contract clauses support flexibility without locking the customer in forever?\",\"answer\":\"A cancellation clause with 6-month notice (or 3 months if needed) helps balance customer reassurance with the provider’s ability to maintain a multi-year relationship.\"},{\"question\":\"How should pricing and fee changes be structured in the agreement?\",\"answer\":\"Use a fixed-fee structure that bundles terms into one monthly amount, and include an annual increase clause (often starting around 5%) to reflect rising expenses over the contract term.\"}]","Managed IT Services Agreement - Template | PDF",13]