1

In general, and open for discussion, I’d like to discuss the viability of purchasing a Managed IT Services company.

The company is still in it’s infant stage, but is generating about $35k in recurring revenue (Managed Services), and Project revenue of about $10k. For a total of about $45k per yr.

The owner has fallen ill and cannot continue to operate the business.

What are your thoughts about taking on this business? Especially, since the revenue is primarily from managed services.

Speaking with the clients, they speak very highly of the service they’ve received thus far.

Enjoy,

1 Spice up
2

What are their overhead costs for providing their Managed Services?

How many hours = the $35K?

3

I assume you’re part of an MSP already and looking to buy out/bring in a new company to expand? Take a good look at their books, see if there is anything to worry about in there. Are they making money or loosing money? What services are the most lucrative, which ones are loosing money? Which clients are their VIPs? What procedures are in place for the clients?

4

Number 1 question to get answered. Will the staff stay if you purchase the company? Because that is want makes this work, people with good personality and skills not some off shelf MSP program.

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Also, what is the opportunity to grow the business?

6

In my area and probably elsewhere also, usually the MSP will buy the clients not the company. Reason being is you don’t want the possible liabilities the selling company might have (back taxes, unpaid vendors…). Also, another criteria usually is the selling companies management stays on with you to help with the transition for a year or so. There is no guarantee the customers won’t leave either. I almost sold my first MSP to a larger MSP and those were the conditions. In the end, I didn’t sell and kept some of the customers. My business partner and I were parting ways. It was either we sell our business and we keep the customers.

7

Maybe, just as important, what do you think of the business model? Is it sound? Is the opportunity still alive? Are the big guys going to take over? Are systems going to be cloud only? Thank you all for responding!