Building an MSP That Buyers Want: Lessons From the Private Equity Playbook
Every MSP owner dreams of the day they can sell their business for a life-changing multiple.
But here’s the truth: most MSPs aren’t built the way buyers want them.
Private equity (PE) firms and strategic buyers look for very specific traits — and if your MSP doesn’t have them, you’ll either get a lower offer… or no offer at all.
The good news? You don’t have to wait until you’re ready to sell to start building an MSP that buyers line up for. You can start today.
Recurring Revenue is the First Thing Buyers Look At
PE firms love predictability — and nothing says predictable like recurring revenue.
High ARR percentage (annual recurring revenue) = stability and scalability.
Heavy project reliance = risk and inconsistency.
Quick test: If more than 25–30% of your revenue is non-recurring, buyers will flag you as risky — and your multiple will shrink.
Buyers Want Leadership, Not a “Chief Everything Officer”
If you’re still the one closing every deal, solving every client issue, and making every decision — you don’t have a business, you have a job.
Buyers want:
A leadership team that can run the company without the owner.
Defined roles and accountability so nothing depends on one person.
A business that won’t crash if the owner steps away.
Translation: The more your MSP runs without you, the more valuable it is.
Operational Discipline Matters More Than “Heroics”
Many MSPs pride themselves on “saving the day” for clients — but buyers aren’t buying heroics, they’re buying systems.
Are your SLAs tracked and met consistently?
Do you have clean PSA data and service processes?
Are gross margins healthy and monitored by client?
Think like a PE firm: they’re not just buying revenue, they’re buying a machine — and they want to see that machine runs smoothly.
Financial Hygiene is a Non-Negotiable
No PE firm will write a big check if your books are a mess.
That means:
Clean, GAAP-compliant financials.
Accurate revenue splits (recurring vs. project).
No “mystery expenses” buried in the P&L.
Pro Tip: Buyers trust data. Clean up your numbers long before you think you’ll sell — not in the 90 days before going to market.
Key Takeaways
Buyers pay more for MSPs with high recurring revenue, clean operations, and leadership depth.
The more your MSP relies on you, the less valuable it is.
Start thinking like a buyer now — not when you’re ready to sell.
Want to make your MSP irresistible to buyers — and worth more when the time comes?
Join the Value Creation Academy and learn how to structure, scale, and systematize your MSP the way private equity loves to see.