Starting an MSP is both challenging and rewarding. But for some, it becomes a stressful endeavor with limited upside. Several years in, many business owners wonder if they would have been better off “just getting a job.”
Do you feel like you’re stuck running a business that’s no longer enjoyable or profitable enough to justify the effort? A nontraditional exit could offer you a way out. It can be a means to sell, secure a comfortable future, and start fresh.
Understanding Nontraditional Exits: More Than Just Selling
A nontraditional exit is about flexibility. It requires you to find creative ways to align with a buyer that make the deal beneficial for both sides. For many small MSP owners, this approach will offer more than financial gain. It also provides an escape route from burnout and the chance to work in a more sustainable, enjoyable way.
Consider the story of the MSP owner who sold his small business to a larger competitor while taking on a salaried role with the buyer. He received an earn-out for his book of business for the lifetime of the contracts along with a reliable salary.
Several years later, this former small business owner is thriving. He’s healthier, happier, and now an equity partner in the larger MSP. This is a perfect example of how an unconventional deal can result in long-term happiness and financial security.
When Fixing Isn’t an Option: The Emotional Toll of Entrepreneurship
For some, the idea of investing years of hard work to fix an underperforming business simply isn’t an option.
Entrepreneurship can be incredibly isolating. Many owners face long hours, dwindling profits, and the constant stress of keeping clients happy — all without the resources of their larger competitors. The stress of running a business you no longer love impacts both physical and mental health. It takes a toll on your marriage and family, too.
If you are determined to turn your business around, it could take up to two years to see significant results. However, if you’re burned out or “done” with the daily grind of MSP ownership, a nontraditional exit is a healthier path. It’s a chance to step away, regroup, and decide what’s best for you without being trapped by the burdens of entrepreneurship.
Selling to Other MSP Owners: A Lifeboat in Crisis
One of the most effective nontraditional exits involves selling to another MSP owner looking for new opportunities. These buyers often value nontraditional deals for reasons such as:
Carrie Richardson
- Adding Revenue Without Extra Sales Efforts: Expanding revenue by acquiring existing customers rather than through direct sales
- Expanding the Talent Pool: Gaining experienced employees by acquiring a smaller MSP rather than going through hiring processes
- Regional Expansion: Growing into new areas with reduced risk and without starting from scratch
These types of transactions are attractive to less experienced or first-time MSP buyers. They provide strategic advantages while allowing sellers to make a clean exit.
Conclusion: Is It Time to Sell?
Not every MSP owner wants to stay in the game forever.
Whether it’s burnout, desire for a new challenge, or the opportunity to secure a more stable financial future, a nontraditional exit could be key to moving forward. From merging with another MSP to taking on a new role within a larger business, the possibilities are vast if you’re willing to think creatively.
Of course, you must prepare your small MSP for sale. If you’re exploring any kind of exit — even a nontraditional one — you’ll need to:
- Document your processes and client environments.
- Make sure your financials are up to date and accurate.
- Check on the health of your client relationships. Your exit value will be tied closely to your clients and their willingness to stay with the new provider post sale.
Once you go through these steps and find the right buyer, you can move on to the next step in your own life.
Carrie Richardson is a partner at Fox and Crow Group LLC. If you’re looking to learn more about your options, visit mspexit.com, a Fox and Crow Group educational resource for M&A opportunities in the IT channel. For more great insights, check out Fox & Crow Group’s author page here.
Featured image: iStock
