There’s often confusion about who qualifies as a “real” client. Many MSPs draw a clear line: they only work with contract clients. But ask around and you’ll hear all sorts of definitions, some including folks who just pay for backups, or license renewals. That’s like calling someone your business partner because they once bought you lunch.
So let’s settle this once and for all: What actually makes someone a contract client (and what doesn’t)? Spoiler alert: “paying something monthly” is not the bar.
A contract client is someone who has committed to a long-term relationship with your MSP. It’s not a casual fling, it’s a structured, recurring, clearly defined partnership. They’ve signed an agreement outlining services, expectations, and pricing. And more importantly, they’re paying you every month and not just when something breaks.
Typically, a contract client receives a comprehensive stack of IT services: monitoring, patching, backup management, helpdesk, and cybersecurity, among others. They pay a set fee every month, usually based on the number of users or endpoints. The relationship is governed by a formal agreement, usually with a minimum term of 12 months or more, and includes an SLA to outline exactly what you’re responsible for and when.
If it’s predictable, recurring, and comes with a signed agreement and service expectations, you’ve got yourself a contract client.
Let’s bust a few myths.
A client who pays you monthly for backups, but doesn’t have patching, monitoring, or helpdesk support, is not a contract client. That’s a client with a subscription. You’re offering a product, not a managed service.
Likewise, someone who only purchases licenses (say for antivirus or Microsoft 365) isn’t a contract client. They’re more of a reseller customer. Sure, you might invoice them every month, but you’re not managing anything. You’re just making sure their renewals don’t expire and that their inbox doesn’t implode.
Then there are the break/fix clients.. those who call once a year with a server on fire, and expect VIP treatment for their $120 emergency ticket. Or the one who wants a firewall review “real quick” but hasn’t paid you for anything since 2021. These clients may pay, but without a recurring agreement, defined service scope, or minimum term, they don’t qualify.
Even clients who sign a contract but only want one service, like mail filtering or patching, fall short. If there’s no SLA, no full service stack, and no long-term relationship, they’re not under true contract, no matter how nice their invoice looks.
Different MSPs have different thresholds, but there’s a consistent pattern among professionals.
A common benchmark is a minimum of 10 users at $200 per user, landing at $2,000 per month. Some MSPs won’t entertain contracts below $2,500 or even $3,000 per month, arguing that it simply doesn’t make financial sense to support clients below that level. It’s like having a car subscription for a tricycle: too much overhead, not enough wheels.
Solo MSPs may be more flexible, offering services like remote monitoring and management (RMM) without baked-in support, but most still set boundaries. They’ll offer hourly support or project work, but they draw the line before it becomes an open-ended commitment with unclear expectations.
Across the board, MSPs agree that if a client doesn’t commit to a full-service stack, defined pricing, and a minimum term, they shouldn’t be treated as a managed contract client.
First, contract clients provide predictable revenue. You can plan staffing, invest in tools, and forecast growth when you know what’s coming in each month. Break/fix or ad-hoc clients? They throw your calendar and cash flow into chaos. You’re either swamped or waiting for the next panic call.
Second, defining contract clients protects your team. Without clear contracts, expectations get fuzzy. Suddenly, your helpdesk is supporting someone who isn’t paying for helpdesk support. And trust us, nobody likes being the surprise “free support” MSP.
Lastly, defining what makes a contract client keeps your business scalable. You’ll avoid the trap of doing too much for too little, and you’ll focus on clients who respect your time, value your expertise, and fund your growth.
It’s simple: If they pay you a fixed monthly fee, have signed an agreement, receive a defined set of services, and have a minimum term—congratulations, they’re a contract client.
If they pay for one-off services, individual licenses, or standalone backups, without the rest of the managed stack, they’re not. If they expect the benefits of managed services without the commitment, it’s time to either formalize the relationship or manage expectations.
If you’re ready to formalize your client relationships, your contract should be airtight—and readable. No need for 12 pages of legalese and a decoder ring. Just make sure you include:
A defined scope of services (what’s in and what’s not)
A minimum term (with auto-renewal if applicable)
Response times and performance standards (aka your SLA)
Clear billing terms
Exclusions and extra charges
Termination clauses that protect both parties
Also, don’t be afraid to say no. If someone can’t meet your minimums, it’s okay to walk away. You’re not a tech concierge on call—you’re a managed service provider with a business to run.