When Should You Consider Selling Your MSP Business and Why?

IT Support San JoseEvery single business owner should have two things in mind when they enter the market with their product or service. They should have a strategy to penetrate the market, and they should also have an exit strategy. As an MSP business, having an exit strategy is just as important as what you are going to do out of the gate. When is it time, though, for you to start to consider selling your managed service provider business?

Knowing when it is time to enact your exit strategy can be a difficult thing for any business owner. No one wants to give up what they have worked so hard to build. As a business owner, though — when you make a profit on your business or you want to venture into other areas that interest you — it is usually best to do so when you hit that prime spot.

Reaching Maximum Growth

What you want to do with your business is to sell off your MSP business right before you reach maximum growth. You always want to have your business on the upswing and when you go to sell it, you want to show that there is still potential to grow beyond where the business is now.

Having a healthy and growing business is one of the most appealing things to any buyer out there. What you want to do as an owner of an MSP business is to really know the market well. Have a firm understanding of when you think you are going to hit that peak level of maturity and exit the business before you get there.

Cashing In on Your Clients

One of the most valuable things that a business owner can have when they are running a managed service provider operation is their client base. When you have built up a series of very loyal clients, these clients are going to be your most loyal asset when you go to sell off your business.

Think about the clients that make up your book of business. How many clients do you have and how many of them have been long-term, trustworthy clients? What is your retention rate for clients that you bring on? When you have all positive results in these areas, it means you are doing great and that is only going to increase the perceived value that your managed service provider business is going to have.

Understanding the Market

No one should know the market that you operate in better than you do. With that said, where do you see the IT business going in the near future in your current market? Do you see it continuing to grow and prosper? Do you see it taking a bit of a downswing in the short-term? You want to have a firm grasp and be able to forecast the market a bit.

You want to time the market right so that you can enjoy it while the market is on the rise, but jump out when it is at that peak — and, perhaps, before it starts to fall. This is when your business is going to be valued the highest and you will get the most benefit out of following through with the sale.

You always want to have an exit strategy in mind when it comes to your MSP business. And you should only consider selling your company when you are ready. When your business is on the upswing, the market conditions are right, and you have a client book of business that is all leading to a great valuation of your business, it is time to cash in. This is when you can get the highest rate of return to reward yourself for putting together a successful business.

About the Arthor:

IT Support San Jose

Founder and President

Rob Naragon

ITque, Inc.

– Present (5 years 3 months)Campbell, CA

ITque (pronounced “i-teek”) is the Bay Area’s leading Managed IT Services Provider helping small and mid-sized Northern California businesses increase productivity and profitability with customized, flexible hybrid cloud and IT support in San Francisco, San Jose and Oakland!