Sales and marketing, Content, Small business

Books: How to Sell Your IT Services Provider Business

A growing number of books specifically focus on building, running and selling (i.e., exiting) an MSP (managed IT services provider) business. Among the books that have caught my attention...

1. Get Acquired for Millions: A Roadmap for Technology Service Providers to Maximize Company Value. A new book from IT channel partner advisor Linda Rose promises to help MSPs and IT solutions providers with their exit strategies. I haven't read the book but may check it out in the weeks ahead.

2. The MSP CEO: Your Guide to Building a Successful MSP Business: This one, from former MSP owner and operator Tommy Wald, interviews numerous MSP industry experts for thoughts on building and running a next-generation MSP. The book includes a few thoughts from me. But as I always disclosed -- my thoughts are ultimately culled from experts across the market.

3. Walk Away Wealthy: The Entrepreneur's Exit-Planning Playbook: This also is required reading for ChannelE2E's followers. The book, written by Mark Tepper, is for all small business owners and doesn't specifically target the technology industry or MSPs. Still, it's one of the key books that I keep on my desk as a reminder of ChannelE2E's mission -- guiding readers from Entrepreneur to Exit.

How Much Is Your MSP Worth? Valuation Considerations

M&A activity involving MSPs and IT solutions providers remains strong, though company valuations can be difficult to pin down.

In some rare instances, ChannelE2E has seen some MSP valuations reach 8X to 10X annual EBITDA. The more reasonable valuation ChannelE2E has heard is 6.5X annual EBITDA — with many deals ranging from 4X (yes, that low) to 8X annual EBITDA, based on a range of factors. Here are deeper details about MSP valuations and associated factors.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.