MSP 30-40-30
Revenue growth matters. What you keep matters more.
The 30-40-30 model is a way to think about the economics of managed services: control delivery cost, preserve room to invest in SG&A, and build a consistently profitable company. The calculator below lets you model the actual revenue mix instead of forcing every revenue stream into the same margin target.
Open the Calculator30-40-30 is a managed-services operating model, not a universal margin rule.
Different MSP revenue streams carry different economics. Managed services, other recurring revenue, project labor, and product sales should be analyzed separately before you look at the blended company result.
30% COGS on managed services
Labor and tools used to deliver managed services consume roughly 30% of MRR when the service line is operating at a 70% gross margin standard.
40% SG&A capacity
The model preserves room for sales, marketing, leadership, administration, and the investments required to keep scaling the company.
30% net profit target
The remaining managed-services economics create the profit target after delivery cost and SG&A are accounted for.
Revenue streams stay separate
ORR, NRR project labor, and product sales have different gross-margin expectations and should not be forced into the MRR target.
Gross margin vs. markup
A 20% product markup does not mean 20% gross margin.
Markup is calculated from cost. Gross margin is calculated from selling price. That is why a product sold at a 20% markup produces about a 16.7% gross margin, not 20%.
The calculator works from revenue and COGS so you can see the actual gross margin produced by each revenue stream rather than mixing markup and margin terminology.
Revenue buckets used in the model
MRR · Managed recurring revenue
Core managed-services revenue. The model uses a 70% gross-margin operating standard.
ORR · Other recurring revenue
Recurring product or add-on revenue with materially different economics from managed services.
NRR · Nonrecurring revenue
Project labor and other nonrecurring service revenue. The model treats professional-services margin separately.
Product revenue
One-time product sales with their own COGS and margin profile.
Interactive model
Model your current mix and margin structure.
Opening your margin calculator…
How this works
Enter your name, business email and company to open the calculator. Add revenue, delivery costs and SG&A to see margins by revenue stream and the combined result. Saving emails a link to your inputs.
Connect your revenue mix to a value goal with the MSP Growth Planning Tool.
Synthetic sample: $100,000 monthly revenue minus $30,000 delivery cost and $40,000 SG&A leaves $30,000 modeled profit, or 30%. Other revenue streams change that result.
This resource is for educational and modeling purposes. Accounting classifications vary by company. Use consistent revenue and COGS definitions and validate financial treatment with the appropriate accounting professionals.
30-40-30 questions
Understand the model before you manage to it.
What does 30-40-30 mean for an MSP?
In the MSP Fuel model, 30-40-30 describes the target economics of managed-services MRR: roughly 30% labor-and-tools COGS, 40% SG&A, and 30% net profit. It is an operating model for the managed-services revenue stream, not a universal margin rule for every type of revenue.
Does every MSP revenue stream use a 70% gross-margin target?
No. The calculator keeps managed-services MRR, other recurring revenue, nonrecurring project labor, and product sales separate because their cost structures and gross-margin expectations differ.
What is the difference between markup and gross margin?
Markup is profit relative to cost. Gross margin is gross profit relative to selling price. A 20% markup on cost produces about a 16.7% gross margin.
Why separate MRR, ORR, NRR, and product revenue?
Separating the revenue streams makes the blended company result easier to understand and prevents a low-margin product stream or project stream from being mistaken for core managed-services economics.
The number only helps if somebody owns what moves it.
Gross margin, capacity, revenue mix, and profitability are leadership operating issues. MSP Fuel coaches the people responsible for those outcomes against the same company plan.