B2B, Industrial & Distribution · Buyer guide
Buying a Managed IT / MSP business
Published · Reviewed by The Diligence Standard Team · Updated
MSPs can produce high recurring revenue but contracts, tool licensing, client concentration, security controls and owner escalation dependence need careful review.
How the business works
Monthly recurring revenue, contract terms, client concentration, technician capacity, cybersecurity liability and vendor stack determine value.
Risks to test
- Top client concentration
- Owner technical escalation dependence
- Cybersecurity incidents/liability
- Contract non-assignability
- Vendor/license changes
- Weak documentation
Evidence to request and reconcile
- MRR/customer cohorts
- Contracts and renewals
- Ticket/SLA metrics
- Technician payroll/utilization
- Vendor/software agreements
- Security incident/compliance records
Decision questions
- What revenue is truly recurring under contract?
- How much technical knowledge sits only with the owner?
- Are client agreements assignable?
- What security incidents or liabilities exist?
- What gross margin exists after all tool/license costs?