I had the pleasure this week of interviewing Randy Katz, co-founder at Synesis Advisors, a boutique consulting firm that helps small business owners sell their business. Today we specifically focused the conversation on MSP’s (Managed Service Providers) and how they can best prepare to sell if that is something in their future. MSP’s are also known as outsourced IT services firms and they typically help their clients manage workstations, applications, security and other infrastructure. MSP’s is a big market (estimated at over 40,000 according to ConnectWise), that is highly fragmented, which creates a great opportunity for companies to be buyers or sellers. Here are my six key takeaways from Randy, but listen to the podcast to learn more:
Do you want to be a deal maker or deal taker?
I loved this comment from Randy. What he challenged us to think about was how proactive the business owner wants to be in preparing his company to maximize value. If you are reactive and hurried, you’re going to be a deal taker.
When you have one buyer, you don’t have them. They have you.
Randy’s point here is that even if you think you know who your buyer is going to be, there is risk of not having an alternative. This is where Synesis can help significantly.
Know your time horizon.
Are you aiming to exit in one year or three years? Your timing will impact the amount of preparation you can reasonably undertake to position the company to maximize value.
Know what type of buyer you are looking for.
If you want to sell to a private equity buyer vs. a strategic buyer vs. an individual buyer, that will dictate how you position the company for sale. A private equity buyer will want to buy the ongoing management team in most cases. An individual buyer won’t. What’s important to you.
Frame the narrative. Stay in control of the process.
This is another good reason to have an advisor but the point is that if you give the interested buyer all your information but don’t ask what they are looking for specifically, you will stay reactive in the process.
Okay, I don’t want to give away all the goodness from this episode so make sure to listen to it. You will walk away with a lot to think about and most importantly, a lot to take action on, if selling your business is something you are interested in pursuing over the next several years.
In this Podcast episode with Randy, you will learn:
- How to maximize value by being a proactive deal maker.
- Why having only one buyer puts you at a deficit.
- How to identify your time horizon.
- The importance of identifying the type of buyer you’re targeting.
- How to get in control of framing the narrative.
We are fortunate to have Randy available to spend time with us on this edition of Stride 2 Freedom. If there is a speaker you’d like us to interview, click here and let us know. Stay well. Stay safe. Stay healthy.
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This Stride Live Webinar is hosted by Stride Services. Stride is a comprehensive financial solutions provider, specializing in outsourced bookkeeping, accounting, tax, and advisory services for Managed Service Providers.
If you’re interested in being a featured guest on our Live Webinars or if there’s a subject matter expert you’d like us to interview, please let us know!
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Show Notes + Transcript:
Randy Katz LinkedIn
Synesis Advisors
Randy Katz Email
Webinar Transcript:
Things to Consider When Selling Your MSP With Randy Katz, Synesis Advisors and Business Broker
