EP238 – M&A Mastery – Part 2 – Preparing to Sell your MSP with Ken Roulston & Ian Luckett

Ken Roulston brings his decades of industry experience to the table and together we explore what it really takes to get your MSP into a position where it’s not only ready to be sold, but where it attracts the right buyer and achieves a fair valuation.  Ken Roulston has walked the talk. He built his own MSP from the ground up, completed six acquisitions over 12 years and ultimately sold the business in 2023 for a healthy multiple, leaving behind a highly efficient and well-oiled operation. Throughout this episode, Ken shares what truly drives value in an MSP and why EBITDA is king when it comes to valuation. We get into the weeds of what EBITDA really is, the difference between profit, EBITDA and adjusted EBITDA, and how small tweaks in your operation today can make a big difference to your valuation tomorrow.  One of the key takeaways from Ken Roulston in this episode is that profitability is only half the picture. Buyers are also looking at recurring revenue, the quality of contracts with your clients, the efficiency of your operations and how professionally the business is run. We talk about the reality that many MSPs face – thinking their business is worth more than it actually is – and how things like weak client contracts or high client concentration can be red flags to buyers. Ken explains how buyers look for signs of consistency and professionalism, including documented processes, clean accounts, staff contracts and a good track record of customer retention. If your MSP is being run informally or too heavily reliant on you as the owner, that’s going to limit your options when it comes to selling.  We also touch on the age-old debate about outsourced service desks. Is it a red flag for buyers or a smart operational choice? Ken shares how outsourcing can actually be a strategic advantage if done correctly, particularly in a tight labour market where skilled engineers are hard to find. In his case, the buyer saw the outsourced helpdesk as an opportunity and adopted it post-acquisition, demonstrating that the model itself isn’t the issue, it’s how efficiently it runs.  Throughout the conversation, we continue to reinforce the concept of owner not needed. If your MSP can't function without you, it’s not a business. It's a job. And buyers don’t want to buy your job. They want a systemised, well-governed, and self-sustaining business. So whether you’re working five days a week in the weeds or you’ve managed to reduce your time to just one day a week, the goal is to build a business that can stand on its own two feet.  Ken also shares his thoughts on selecting the right buyer, and why it’s not always about choosing the highest bidder. Culture fit matters, especially if there’s an earnout or deferred payment involved. If the acquiring company doesn’t align with your values or runs the business poorly post-acquisition, it could not only damage your legacy but also impact your final payout. We talk openly about deal structures, what buyers are looking for, and the importance of preparation, patience and compromise. Selling an MSP is not a six-week sprint. It’s a strategic process that requires you to get your house in order and present a credible, investable business.  To round off the show, Ken gives us a glimpse into the MSP M&A training course he’s delivering with Mark Copeman, which goes into even more detail than we could cover in this three-part series. There’s also mention of an upcoming confidential matchmaking service for buyers and sellers, which is being developed as part of their wider initiative to support MSPs through this complex journey.  So, if you’re an MSP owner who is thinking about selling in the next year or two, or even if you’re just curious about what your exit could look like, this episode is essential listening. Get ready to take notes, challenge your assumptions and most importantly, take action. M&A is a serious step, but with the right preparation and support, it can be one of the most rewarding chapters in your business journey.  This is the second of three episodes in our M&A Mastery series with Ken Roulston, so if you haven’t already, make sure you catch part one where we lay the groundwork and share Ken’s incredible story. And next week, we’ll be diving into the buying process to wrap up the trilogy with even more insights on what’s happening in the M&A world for MSPs.  Connect with Ken Roulston on his LinkedIn HERE and learn more about his MSP M&A through their website HERE  Connect on LinkedIn HERE with Ian and also with Stuart by clicking this LINK  And when you’re ready to take the next step in growing your MSP, come and take the Scale with Confidence MSP Mastery Quiz. In just three minutes, you’ll get a 360-degree scan of your MSP and identify the one or two tactics that could help you find more time, engage & align your people and generate more leads.  OR   To join our amazing Facebook Group of over 400 MSPs where we are helping you Scale Up with Confidence, then click HERE  Until next time, look after yourself and I’ll catch up with you soon!