Working on next year’s budget and curious about the broader economic signals shaping the channel market? If you’re a GTIA member, you’re in luck. The GTIA Member Portal has more than a year of channel economic tracker data and insights. In this article, we’ll identify four financial priorities for next year based on GTIA’s Q2 Quarterly Economic Tracker for 2026.
1. Plan on Pricing Increases
IT service provider(ITSP) margin pressures are real. Rising oil prices and the impact of tariffs on ITSP business operations are contributing to higher cost of goods (COGs) for 68% of ITSPs surveyed. A full quarter (25%) of ITSPs report that they’ve absorbed all tariff costs in Q2 instead of passing those on to their customers.
For your ITSP to compete, make strategic investments and keep pace with increasing costs to acquire and maintain tools, talent and customers, and grow your profit margins, you need to implement price increases on a regular basis.
Ideally, price increases should be:
- Incremental: Phase increases over time rather than implement one large increase.
- Included in your written agreements: Put scheduled price increases in writing in your contracts to protect your ITSP and minimize client surprises.
- Automatic: Use an escalator clause that automatically updates pricing on the agreement renewal date.
- Transparent: Clearly communicate—in writing—pricing changes to clients at least 90 days before (1) the end of clients’ fiscal years, (2) the month when clients start preparing budgets and (3) the change becomes effective.
2. Strengthen Cash Balance
According to GTIA’s Q2 Quarterly Economic Tracker, 50% of ITSPs report customers cutting tech purchases, which makes your ITSP’s cash flow less predictable. Ask your accountant where your ITSP’s cash balance stands. An ideal average cash balance for most ITSPs is the equivalent of three to six months of operating expenses (OpEx).
To strengthen your ITSP’s cash on hand, collect money sooner if your terms are credit. For example, your ITSP could invoice customers two weeks before the start of a new month with ACH payment due on the first of the month.
3. Make Targeted Investments That Fuel Growth
Although sentiment regarding the current economy has softened, long-term optimism remains remarkably steady. For three consecutive quarters, 48% of ITSP respondents have expressed optimism about the coming year. This should serve as an important reminder for ITSP leaders.
Periods of uncertainty often create significant opportunities for businesses willing to invest strategically while competitors become cautious. Market share is rarely won during perfect economic conditions. It is often gained when other organizations reduce hiring, pause marketing initiatives, delay service development or cut sales investments.
That doesn't mean spending recklessly. It means making targeted investments in areas most likely to generate future growth.
Examples might include:
- Expanding cybersecurity capabilities
- Developing AI advisory services
- Investing in customer success programs
- Improving sales enablement
- Strengthening marketing execution
- Recruiting high-performing talent displaced from competitors
The goal is balancing fiscal discipline with growth readiness. Maintaining profitability remains important, but excessive caution can cause organizations to miss strategic opportunities.
4. Build Multiple Operating Scenarios for the Next Year
Perhaps the most important takeaway from the tracker’s data is the contrast between channel optimism and uncertainty.
While long-term optimism remains stable, economic sentiment regarding current conditions continues to shift. Strong economic sentiment declined to 36%, while neutral sentiment increased to 29%. Concerns about Middle East tensions also remain elevated, with 81% of respondents reporting at least some level of concern. Negative tariff sentiment remains significant as well.
These mixed signals make forecasting more difficult. Instead of relying on a single annual plan, develop multiple operating scenarios.
Consider building:
- A best-case scenario reflecting expected growth
- A downside scenario that assumes slower project revenue and higher operating costs
- A growth scenario that assumes increased customer demand and stronger-than-expected market conditions
For each scenario, outline staffing plans, cash requirements, sales targets and profitability expectations.
Scenario planning helps ITSP leaders make faster decisions when conditions change. It reduces reaction time and provides confidence during periods of uncertainty. The objective isn't to predict the future perfectly. It's to prepare for multiple possible outcomes.