MSPs
PREPARING FOR SALE PAYS
Many MSPs assume they’re profitable, yet hidden structural weaknesses and poor financial visibility are eroding margins, depressing valuations, and derailing deals. Daniel Welling, co-founder of MSP Finance Team, argues that operating with exit‑ready discipline, even when a sale isn’t on the horizon, is becoming a defining advantage in today’s MSP market.
M
anaged service provision can be an incredibly rewarding line of work. As organisations become
increasingly reliant on IT and tech, MSPs have become digital stewards and trusted advisors, providing genuine, measurable value to their customers by delivering, upholding, and optimising the supporting services that modern enterprises desperately need. Playing no small part in the effective day-
to-day running, scaling, and future-proofing of companies across industries, well-run MSPs are enjoying – as they should – healthy profits. Yet the line between financial prosperity and problems is thinner than many MSP business owners might expect. I oſten meet founders who believe they are
running a profitable business. Tey have cash in the bank, are paying themselves a healthy income, and clients continue to sign up for and renew their contracts. Everything sounds great, until you dig into the numbers. A contract that a business owner might
perceive as £10,000 in monthly profit may actually prove loss-making once expenses, time, effort, and the owner’s own remuneration are properly accounted for and costed.
30 | September/October 2026 It’s easy to feel positive about securing the
income. But if the commercial value of the roles performed and services provided add up to £11,000 a month, then the reality is that the business could find itself carrying a £1,000 monthly loss without necessarily realising it.
MSPs are IT gurus, not financial experts Many MSPs are losing money this way, masked by the fact that revenue can still provide them with a reasonable income. However, earning a living is not the same as owning a genuinely profitable company. Understanding this is the first step to
remedying this. MSPs are IT engineers, not financial professionals. Tey’re highly capable in their field, but naturally depend on general accountants, bookkeepers and automated tools for their financial needs. Tese resources are undoubtedly useful for
keeping accounts, but they aren’t the best for explaining how the MSP is actually performing financially. A report in Xero or QuickBooks might give
the impression that everything looks rosy, but the information is rarely sufficient to provide
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