B2B, Industrial & Distribution · Seller readiness

Selling a Managed IT / MSP business

Published · Reviewed by The Diligence Standard Team · Updated

Owners should prepare MRR cohorts, churn, contract assignability, technician utilization, vendor stack and security/compliance evidence.

How the business works

Monthly recurring revenue, contract terms, client concentration, technician capacity, cybersecurity liability and vendor stack determine value.

Issues to resolve

  • MRR is not separated from projects/hardware
  • Churn is not tracked
  • Owner owns all high-level client relationships
  • Security procedures are undocumented
  • Contracts are inconsistent

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?