TLDR: Not all clients are created equal. Some are feeding your growth, and some are slowly strangling it. The Pumpkin Plan approach to MSP profitability means identifying your best clients, nurturing them relentlessly, and having the courage to cut loose the ones dragging you down. Saying "no" isn't just a boundary, it's a growth strategy.
Let me paint you a picture.
You're an MSP owner. You've got a decent roster of clients. Revenue looks okay on paper. But here's the thing, you're exhausted. Your team is stretched thin. And somehow, despite all those monthly recurring revenue numbers, you're not seeing the profit you expected.
Sound familiar?
Here's the uncomfortable truth most MSP owners don't want to face: you've probably been saying "yes" to clients you should have turned away a long time ago.
And I get it. I really do. Back in the day, I was what you might call a "technology prostitute." Whatever the client wanted, I'd do it. Whatever vertical they were in, I'd figure it out. However they wanted to pay, or not pay, I'd make it work.
That approach nearly killed my business.
The Myth of "More Clients = More Money"
Here's the math most MSP owners get wrong: they assume that adding another client automatically means adding profit.
It doesn't.
Revenue and profit are not the same thing. A client paying you $5,000 a month while consuming 200 hours of technician time, generating endless tickets, and demanding custom solutions that keep your team up at night? That's not a client. That's a resource vampire.
Meanwhile, you've got another client paying $3,000 a month who barely needs you because you set them up right from the start. They refer you to their friends. They pay on time. They trust your recommendations.
Which one would you rather have ten of?
The problem is, we've been conditioned to chase revenue. To say yes. To be grateful for any business that walks through the door. And in the early days? Sure, maybe you had to take whatever you could get.
But you're not in the early days anymore. And if you're still operating like you are, you're leaving serious money, and sanity, on the table.
Enter the Pumpkin Plan
Mike Michalowicz wrote a book called The Pumpkin Plan, and it changed how I think about business growth. The core idea is simple but powerful: giant pumpkin farmers don't grow prize-winning pumpkins by nurturing every seed equally.
They plant a bunch of seeds, identify the strongest ones early, remove the weaker ones ruthlessly, and pour all their resources into the pumpkins with the most potential. The result? Massive, award-winning pumpkins that everyone wants to see.
Your clients are your pumpkins.
Some of them are healthy, growing, and have the potential to become something incredible. These are your "top clients", the ones who align with your ideal client profile, refer you business, pay well, and actually appreciate what you do.
And then there are the rotten ones. The clients who complain constantly. Who nickel-and-dime every invoice. Who have fifty employees but want to pay like they have five. Who call your personal cell at 10 p.m. on a Saturday because they forgot their password. Again.
Here's the hard truth: those rotten pumpkins are stealing nutrients from your healthy ones.
Every hour your team spends putting out fires for a high-maintenance, low-profit client is an hour they're not spending delighting your best clients. Every ounce of your energy wasted on someone who doesn't value you is energy you could be investing in growth.
If you want to learn more about this approach, we've got a deep dive on the Pumpkin Plan for MSPs that's worth your time.
How to Spot a Rotten Pumpkin
Alright, so how do you know which clients are draining your profitability? Here are the warning signs:
1. High ticket volume relative to revenue.
If a client generates 30% of your support tickets but only 5% of your revenue, you've got a problem. They're consuming resources way out of proportion to what they're paying.
2. Constant scope creep and "quick favors."
"Hey, can you just…" is a phrase that should make you twitch. These clients always need one more thing that somehow never makes it onto an invoice.
3. They don't follow your recommendations.
You tell them they need better security. They say no. Then they get breached and blame you. Classic.
4. They beat you up on price. Every. Single. Time.
If a client treats you like a commodity and shops you against the cheapest provider they can find, they don't value what you do. And they never will.
5. Your team dreads working with them.
This one's subtle but important. If your best technicians groan when they see a certain client's name pop up, that's data. Your team's morale matters.
The Real Cost of Saying "Yes"
Let's talk numbers for a second, because this is where it gets real.
Healthy MSPs typically aim for gross profit margins of 50% or higher. Net profit margins should land somewhere between 25-35%, depending on your overhead and service complexity.
But when you're carrying unprofitable clients, those numbers tank. Here's why:
- Untracked non-billable hours spent on "quick questions" and after-hours emergencies
- Underestimated workloads that drain resources faster than you planned
- Inefficient processes that only exist because you bent over backwards for one difficult client
This is what we call profit leakage. And it's silent. It doesn't show up as a line item on your P&L. It just slowly, steadily erodes your margins until you're working twice as hard for half the reward.
Sound like the MSP hamster wheel? That's because it is.
Saying "No" Is a Growth Strategy
Here's the mindset shift that changed everything for me: saying "no" to the wrong clients is actually saying "yes" to the right ones.
When you fire a rotten pumpkin, or better yet, never take them on in the first place, you free up capacity. You create space for clients who align with your ideal profile. Clients who pay what you're worth, respect your expertise, and help you build the business you actually want.
This isn't about being arrogant or turning away money. It's about being strategic.
Think about the brands you admire. Chick-fil-A isn't open on Sundays, and they're doing just fine. Southwest Airlines doesn't do first class or assigned seating, and people love them for it. These companies know what they're about and what they're not about.
What are you about? And more importantly, what are you not about?
How to Start Cutting
Okay, so you're convinced. You've got some rotten pumpkins that need to go. Now what?
Step 1: Rank your clients.
Look at each client's revenue versus the actual cost to serve them. Factor in technician hours, support tickets, and the intangible cost of stress and frustration. Create a simple ranking.
Step 2: Identify your top 20%.
These are your prize pumpkins. The ones you'd clone in a heartbeat if you could. What do they have in common? That's your ideal client profile.
Step 3: Identify your bottom 20%.
These are the ones costing you more than they're worth, financially, operationally, or emotionally. Time to have some hard conversations.
Step 4: Raise prices or part ways.
Sometimes a "problem client" becomes a great client when they're paying appropriately for the service they require. Give them the option. If they won't pay, wish them well and move on.
Step 5: Stop attracting the wrong clients.
Update your marketing, your sales process, and your positioning to attract more of your ideal clients and repel the ones who don't fit. Differentiation matters.
The Bottom Line
Every time you say "yes" to a client who doesn't belong in your portfolio, you're saying "no" to sustainable growth, healthy margins, and the business you actually want to build.
The Pumpkin Plan isn't about being ruthless. It's about being intentional. It's about recognizing that your time, your team's energy, and your company's resources are finite: and they deserve to be invested in relationships that actually pay off.
So here's my challenge to you: this week, take a hard look at your client roster. Identify one rotten pumpkin. And start the conversation.
It might feel uncomfortable. It might even feel scary. But on the other side of that discomfort? That's where profitability lives.
What better day to start than today?
Ready to get strategic about your MSP's profitability and growth? Let's talk.