Buying a small IT MSP without direct industry experience

by a searcher

3 weeks ago

I'm wondering if anyone has a view on buying a smaller IT MSP business (<$750k EBITDA)  without direct experience in the space. There are a number of these for sale, but I'd assume I would likely need deep industry expertise to own/operate one. Curious if this group has any perspectives on this!

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searcher

you got lot of good insights from other professionals. I would like to add few aspects here.

It is always good to have Industry experience, however it's good to consider below points and discuss with seller:
1. Management structure, how good they are?
2. Number of long term/recurring customers vs short term customers
3. Does the company has private company contracts or government contract?
4. What is the potential to expand the business, I came across a business which has some issues with expansion.

3 weeks ago | like reply | 0 likes

searcher from Northwestern University - Kellogg School of Management

Agree with some of the commentary already shared. Your role will be different after the acquisition based on the size. If a smaller company and the owners are exiting, there's a lot of risk in being sure the customers get what they need and that the current team gets the mentoring they need. Very much caution those with limited experience to a smaller company.

Same goes for the other side. Owners looking to exit are likely weary of an inexperienced buyer and would rather go with those with more experience.

3 weeks ago | like reply | 1 like

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