STATE OF THE INDUSTRY
How To Avoid Selling Your Company To
The Wrong Buyer
You worked you ’ re a $$ off to grow your MSP , so deal price is important , but you also want to leave it in good hands .
Here are some tips to find the perfect buyer .
Selling the MSP business you built with your blood , sweat , and tears is a major decision . The same is true for the buyer who doesn ’ t want to be saddled with a mismatch .
That ’ s why it ’ s critical that both sides set the right expectations , have transparent communications , and paint an accurate picture of their companies during the process leading up to an M & A transaction .
Anything less can derail a deal or result in dissatisfaction , with buyers and sellers disagreeing on fundamental matters — customer service , work-life balance , and overall company philosophy .
It ’ s Not All About The Benjamins
Deal price is important , of course , but shared values are essential to a successful transaction too . Products , services , and people should all complement each other , according to Kathy Wagner , chief financial officer at Kaseya , which helps facilitate MSP transactions through its M & A Concierge Platform .
“ Different companies have different types of cultures ,” she says , “ and this is really a marriage .” One company may have a bare-bones staff working lots of overtime . Another may be more attuned to work-life balance initiatives or provide free snacks and lunches for employees . “ Those guys are always going to be bumping heads if the values aren ’ t the same ,” Wagner notes .
Customer service orientation also needs to align , she adds , noting that “ some companies think the customer is right ; some companies think the customer is right within reason .”
Joanna Mirov , senior advisor of M & A at Ntiva , an IT services company with offices across the United State , also stresses the importance of shared values . “ If the values , culture , and priorities are aligned , everything goes smoothly , and you avoid the disruption of losing employees and clients ,” says Mirov , who sold her 17-year-old MSP business to Ntiva .
What Will You Do After The Sale ? Set Expectations And Plan Ahead
Wagner encourages buyers and sellers to reach an understanding about what happens to the seller ’ s founder or CEO post-sale . Sellers , she says , need to ask themselves these key questions : Do I want to stay on ? If so , what does that look like ? What does my day look like when I become an employee as opposed to the owner ?
Mirov is living proof of the need to plan ahead . “ I was so busy with making sure my clients and staff were taken care of that I forgot about myself ,” she recalls . “ Luckily , Ntiva worked with me on this process , but I should have thought this through way in advance .”
Knowing the selling CEO ’ s role in advance can affect the terms of the sale too . A CEO planning to stay may agree to take less money up front in favor of an earnout based on business goals .
Don ’ t Cover Up Your Warts — Be Transparent
Buyers and sellers need an accurate picture of each other ’ s business , says Wagner .
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