Skyrocketing demand for managed services, including IT services spending forecasts projected to surpass $1 trillion by 2019, and you have a recipe for a lot of M&A activity in 2018.
Historically, many MSP acquisitions happen by accident. WHat I mean is that many MSP sellers find themselves approached by a prospective buyer or are driven to sell due to an unplanned set of circumstances (health, financial pressures, etc.). Unplanned M&A deals are not always the best way to exit your MSP practice. In fact, being pressured into a deal could be disastrous and undermine all the hard work you've put into your MSP business.
What Is Your MSP Exit Plan?
MSPWorld 2018 will feature a session on how to develop and execute an exit strategy for your MSP practice. What is particularly important for MSP owners is the following:
- Do you have a good story to tell?
- Brand awareness of your MSP business
- Solid financials - this includes having polished financial reporting, but also having had time to focus on your business so the financials tell a positive story
- Cleaning up the cobwebs - selling a MSP is just like selling a house. You need to prepare it for inspection, and ultimately for a transfer in ownership
- Preparing your employees - people often make up the best part of a MSP practice. Knowing how to prepare your staff for an eventual sale is crucial to a smooth transition, especially if the value of your MSP business depends on it!
2018 will likely see an increase in 2018 activity, but it won't be due to traditional consolidation drivers, such as lack of demand. 2018 is going to be like the gold rush of 1849. If you aren't prepared for it, you could lose a lot in value.
