Every few weeks I get a call that goes roughly the same way. An owner has decided it’s time. Maybe they’re tired. Maybe a broker planted a number in their head. Maybe a competitor just sold and the FOMO is real. They want to know what their MSP is worth and how fast they can get to a deal. What they’re really asking about is MSP exit readiness, usually for the first time.
Most of the time, I have to tell them something they don’t want to hear: the price a buyer will pay was largely decided two or three years ago. Not by the market. By how the business was run.
Buyers all ask the same questions
I’ve sat on both sides of this. I grew a 12-person VAR into an 85-person MSP and sold it, and I’ve spent the last decade-plus helping owners prepare for their own exits. Across every deal I’ve seen, a buyer’s diligence starts with the same questions.
How predictable is the revenue?
Not how big. How predictable. A dollar of contracted, recurring managed services revenue is worth a multiple of a dollar of project work. If your revenue mix leans heavily on projects and product resale, a buyer discounts accordingly, no matter what your top line says.
How much leverage is left in the margins?
Sophisticated buyers aren’t just pricing what your business earns today. They’re pricing what it can earn under their roof, with automation, standardization, and scale applied. A shop where every client is a snowflake and every ticket is handled by hand offers a buyer very little to work with. One with standardized agreements, a disciplined stack, and clean processes gives them margin they can unlock, and they’ll pay for that upside. The irony is that the owners who build that leverage usually capture most of it themselves before they ever sell.
How dependent is this business on you?
If the biggest clients call your cell phone, if pricing lives in your head, if the team escalates everything to your desk, then the buyer isn’t acquiring a business. They’re acquiring a job you’re about to quit. Owner dependence is the single most common value killer I see, and it’s also the slowest one to fix.
Are the margins real?
Plenty of MSPs show a healthy bottom line that evaporates under normalization. An under-market owner salary, family on payroll, personal expenses buried in the P&L. Buyers pay for true net profit after a fair owner wage. The best-run MSPs clear 18% or better on that basis, while the industry median sits around 7%. That gap is the difference between a premium multiple and a disappointing one.
“Exit ready” is just “well run,” measured
Here’s the part that trips people up: none of this only matters if you’re selling.
A business with predictable recurring revenue, margins that survive scrutiny, durable client relationships, and a team that runs the day-to-day without the owner is simply a better business to own. It throws off more cash. It’s less stressful. It gives you options. Sell, hire a GM and step back, acquire, or just keep running something that doesn’t run you.
That’s why the owners who get the strongest outcomes aren’t the ones who “prepared to sell.” They’re the ones who ran a tight business for years and then happened to sell it. The preparation and the running are the same work.
The seven dimensions buyers actually price
When we evaluate an MSP the way an acquirer will, we look at seven things: profitability quality, the growth engine, revenue mix and agreement design, client base durability, owner independence, operational and financial maturity, and go-to-market position.
Most owners have a gut feel for two or three of these. Almost nobody has an honest read on all seven, because when you’re inside the business, you grade on a curve. You know why that one client is 30% of revenue. You know the books are “basically clean.” A buyer extends no such courtesy.
How do you check your MSP exit readiness?
This is exactly why we built our free MSP Exit Readiness Assessment. It’s about 32 questions and ten minutes of your time, and what comes back isn’t an automated score. We read your answers and write you a personalized report, the same way we’d brief a client. Where you stand on each of the seven dimensions, an overall rating, and the handful of moves that would raise your value fastest.
If you’re planning to sell in the next year, it will tell you what diligence will surface before a buyer finds it. If you’re years away, even better. Time is the one input you can’t buy back, and the value you’ll eventually sell is being built (or leaked) right now.
Ten minutes. No cost, no pitch in the report.
Common questions
How long before selling should an MSP start preparing?
Ideally two to three years. Most of the factors buyers price, like recurring revenue mix, owner independence, and normalized margins, take multiple years to change meaningfully.
What do buyers look for when acquiring an MSP?
Predictable recurring revenue, true net profit after fair owner compensation, client base durability, and a business that runs without the owner. These drive the multiple more than headline revenue does.
Is exit preparation worth it if I’m not planning to sell?
Yes. The same work that makes an MSP sellable also makes it more profitable and easier to run in the meantime.
Dave Wilkeson is the founder of MSP Advisor and co-author of Profit and Growth for MSPs: Dragon Boats, Catamarans, and Superyachts.