A few minutes of read-only financials and a short questionnaire surfaces what a buyer would discount your MSP for — whether the cash flow still holds once a market salary for the owner-as-lead-engineer is charged against it, how much of your revenue is genuinely contracted monthly recurring versus break-fix, how concentrated you are in one client, and the contract-transfer risk they price. Preview costs nothing.
Enter two numbers for an instant Managed IT Services (MSP) ballpark. No signup — the real number comes from your books.
We answer each one from your books first — so you fix the story before a diligence team writes the number.
If most of your revenue is projects, hourly work, and hardware resale rather than contracted monthly recurring, a buyer treats it as a job, not an annuity. Modern acquirers want 80%+ recurring; a shop sitting near 50% gets priced near the floor instead of the multiple a high-MRR shop earns. Project revenue resets to zero every January, and a buyer can't underwrite a number that has to be re-won every year.
In most owner-led MSPs the owner is the deepest technical escalation point AND the client-facing strategist AND the rainmaker. A buyer can't keep all of that, so they subtract what it costs to replace you — realistically a market service-manager/vCIO salary plus a senior engineer. That add-back comes straight out of normalized earnings before any multiple is applied, which is why solo-engineer shops take the deepest haircut. If the techs and clients only trust you, the business doesn't transfer.
Concentration is a quiet multiple-killer. Once a single client is 10–15% of revenue a buyer starts haircutting; 15–25% pushes them to earnouts and escrow; above 25% it's often a deal-breaker. The fear is simple: if that client leaves the year after close, the buyer overpaid for revenue that walked out the door.
Handshake and month-to-month clients don't transfer cleanly — a buyer wants signed multi-year Master Service Agreements with assignment clauses so the revenue legally follows the sale. Same for operations: if the monitoring, patching, and ticketing live in your head instead of in a documented PSA/RMM stack with a real process, diligence flags it as key-person risk and unpredictable churn, and the multiple comes down.
Each lever is sized for a typical lower-middle-market msp, ~$3.5m revenue, ~70% recurring mrr, ~18% owner-normalized ebitda — about $600K EBITDA. Same number whether we frame it as “what a buyer discounts” or “what you keep by fixing it.”
This is the highest-leverage move you have. Converting break-fix and ad-hoc clients onto fixed-fee monthly managed-services contracts is what moves you from the floor of the band toward the top. Sector recurring revenue is already around three-quarters of total; the buyers paying premium multiples want 80%+. Every point of break-fix you convert to MRR is revenue a buyer can actually underwrite.
adds about 0.4–0.8× to your multiple · usually takes 12–24 months
Hire and document a service manager and a senior engineer so the business operates when you're on vacation. This directly shrinks the owner-replacement add-back that otherwise reduces your normalized earnings dollar-for-dollar, and removes the single biggest discount on small MSPs. A shop that runs without the owner is worth a full turn or more above one that doesn't.
adds about 0.5–1.0× to your multiple · usually takes 18–36 months
Move clients onto signed two-to-three-year Master Service Agreements that are assignable to a buyer. Contracted, transferable revenue with low churn is the difference between selling an annuity and selling a hope — and it de-risks the concentration story, since a large client under a multi-year MSA is far less scary than one on a handshake.
adds about 0.3–0.6× to your multiple · usually takes 12–24 months
Get every client under about 10% of revenue, and push gross margin up by trimming low-margin hardware resale and tightening tool and vendor costs. Diversified, high-margin recurring revenue is exactly the profile the platform acquirers pay up for.
adds about 0.2–0.4× to your multiple · usually takes 6–18 months
Typical impact ranges blended from lower-middle-market transaction data, sub-$50M M&A databases, and observed consolidator pricing in the $300K–$3M EBITDA band. Directional, not a guarantee — your memo computes your actual numbers from your books.
The metrics buyers grade managed IT services providers on. The diagnostic fills the “your business” column from your actual QuickBooks data.
| Metric | Managed IT Services (MSP) benchmark | Your business | What it means |
|---|---|---|---|
| Recurring / contracted revenue | ~75% of revenue | Your data | Higher is better — the top multiple lever |
| Gross margin | ~52% | Your data | Pricing and job-costing discipline |
| EBITDA margin | ~18% | Your data | What flows to the bottom line |
| Healthy customer-concentration ceiling | top customer under 10% | Your data | Above it, buyers price the risk |
| Typical industry growth | ~12% / yr | Your data | Beating it can add to your multiple |
| Typical sale multiple | 4.5–9.0× EBITDA | Your data | Where the bidding starts; the levers above move you up |
Benchmarks are blended industry composites, service businesses $1M–$10M revenue, 2026-Q1 — directional, not a precise bar. Your memo measures you against your own books. Connect QuickBooks to fill in your numbers →
The diagnostic arrives as formats you can actually use, plus a private, scoped link to share a curated package with a specific buyer — you decide, card by card, what they see.
A branded slide deck, ready to present — for the buyer meeting, the lender, or the board.
A written diagnostic that holds up with buyers, yours to edit — plain-English summary, how we rebuilt your real earnings, every add-back listed.
Live formulas, not a dead printout — the path from raw profit to your real number, plus the cash-tied-up scenarios a buyer can stress-test.
The MSP buyer pool is dominated by private-equity-backed consolidators — PE has appeared in roughly two-thirds of disclosed MSP deals. Roll-up platforms like Evergreen Services Group (Alpine Investors), New Charter Technologies, Ntiva, Thrive, and Magna5 acquire smaller MSPs as tuck-ins, usually with equity rollover and earnouts. The headline 10–12x+ multiples describe these scaled $5M+-EBITDA platforms doing the buying, not the shops being bought — smaller, owner-dependent MSPs are acquired as add-ons at roughly 5–8x EBITDA, and that earnout/rollover structure prices in transfer and retention risk. Below the platforms, individual buyers and search funds acquire owner-operator shops on an SDE basis. The memo maps which pool fits an MSP your size.
Read-only, through Intuit. We never write to your books. About 5 minutes.
Just what the books can’t show — agreements, key accounts, who runs the crews.
Buyer-readiness score, normalized EBITDA, value range and top flags — instantly.
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Most Managed IT Services (MSP) businesses in the $1M–$10M revenue range trade at roughly 4.5× to 9.0× normalized EBITDA, with a typical deal near 6.5×. Smaller, owner-dependent shops sit at the low end; larger, manager-run businesses with recurring revenue reach the top. Your actual number depends on your books — that's what the diagnostic computes, blending recent lower-middle-market closings, main-street marketplace sales, and academic M&A survey data.
Two ways, depending on size. Smaller owner-led shops (roughly under $2M revenue) are valued on a multiple of Seller's Discretionary Earnings — typically 2–4.5x, with about 3.5x a solid result. Larger, recurring-revenue-heavy MSPs are valued on a multiple of owner-normalized EBITDA — realistically 4.5–9x for SMB-scale shops. In both cases the number that moves you up or down the range is your recurring monthly revenue (MRR) mix: contracted, high-MRR, low-churn shops sit at the top; break-fix and project-heavy shops sit at the floor. Every figure traces back to your books, never a generic rule-of-thumb.
Because the headline numbers come from a contaminated dataset and from the wrong end of the market. The broad NAICS-541512 database mixes true managed-IT shops in with large systems integrators, custom-software firms, and enterprise consultancies that legitimately trade at 11–20x — so its 'median' isn't your multiple. And the 12x+ figures in trade press describe the scaled $5M+-EBITDA platforms doing the buying, not the smaller shops being bought. Real SMB MSP transactions run closer to 3–5x for sub-$3M-revenue shops and 5–9x as you scale. Your broker is quoting the market you're actually in.
In order of leverage: push your recurring MRR mix toward 80%+ of revenue; build a team so the business runs without you, which shrinks the owner-replacement haircut; lock clients into signed multi-year MSAs that are assignable to a buyer; and get every client under about 10% of revenue while lifting gross margin. Those moves are the difference between selling at the floor and selling near the top of the band. The diagnostic scores where you sit on each and shows what moving up would be worth.
Sixty seconds. Four numbers. No signup, no email. Just a real answer.