You’ve built your MSP from the ground up—with your hard work, dedication, time and heartache. Now you’re ready to sell. How will you leave your business, and more importantly what will you leave behind?
As an MSP, providing managed IT, cloud infrastructure and cybersecurity services remotely gives you certain advantages over traditional project-based business models involving hardware resale and onsite service requirements—including higher margins for your recurring service agreements. The number of these recurring agreements, and the length of their term, are an important factor in optimizing the sale of your business.
Before we get to what buyers are looking for, let’s examine your reasons for selling your business. You’ve worked hard to build your business to where it is today, and your decision to sell can depend on a number of factors. Your business may have topped out in terms of its value and you wish reap the rewards of your labours. Perhaps you’ve received an offer that is too good to refuse. Or you’re ready to retire, or to take on new challenges and opportunities. There may be unexpected family or health issues that need to be addressed, or ongoing issues with business partners that are unable to be resolved.
“Whether you’re looking to exit your MSP business immediately or over a set period of time, our process ensures the preservation of the business, its legacy, and business continuity for employees and clients. We are operators partnering with operators. We are not suit and tie bankers or private equity investors looking for their next firm to strip and sell for parts. We have over 15 years of Information Technology hands-on experience.”
Ravi Ramharak, Managing Director Mergers & Acquisitions, MSP Corp
So what is it that potential buyers of your business are looking for? One key factor is you, or rather the lack of you being there. They want to know whether your business can operate with you. Have you put in a solid management team and structure that doesn’t require your day-to-day involvement to keep running smoothly?
Other factors buyers are looking for is consistency. Has the company shown steady revenue growth that will be sustainable beyond your tenure? Does it boast a high percentage of recurring revenue? Do you own any particular market segment or niche? Is your client base diversified, or do you rely on only one or two key clients? Traditionally, what has been your client and staff turnover rate? In addition to seeing stability in both your client base and your employees potential buyers are interested in the core competencies of your staff and what measures have been taken to ensure their development.
And then of course there are the financials. Potential buyers look strongly at the bottom line. Do you have a history of consistent cash flow? What is the value of your ongoing contracts and any receivables you are carrying? These are just some of the many elements in undertaking the successful sale of your MSP business.
MSP Corp understands that you’ve worked hard to build your business and you want to protect it. With a mission to be a world-class business partner for MSP owners across Canada, we actively seek to acquire and partner with owners looking to secure the value of the business they have built and provide a seamless exit process that ensures business continuity and employee and client stability.
Contact us today to learn more about selling your business and maximizing its value.