TLDR: Most MSP owners dream about the day they’ll sell their business and walk away with a fat check. But here’s the uncomfortable truth, the majority of them are actively sabotaging that future payday right now, today, without even realizing it. Let’s talk about the seven most common exit planning mistakes and how to fix them before it’s too late.
You’ve built something real. You’ve survived the midnight server crashes, the impossible clients, and the employee drama that made you question your life choices. And somewhere in the back of your mind, there’s this vision: selling your MSP, cashing out, maybe drinking something fruity on a beach somewhere.
But here’s the thing. That exit? It doesn’t just happen to you. It’s engineered. Or it isn’t.
And most MSP owners, yes, probably even you, are making mistakes right now that will cost them hundreds of thousands of dollars (or more) when they finally try to sell.
Let’s dig into the seven biggest exit planning mistakes we see MSP owners make. Fair warning: some of this is going to sting.
Mistake #1: Waiting Until You’re “Ready” to Start Planning
“I’ll think about exit planning when I’m closer to retirement.”
Famous last words.
Here’s the brutal reality: the best time to start planning your exit was the day you launched your business. The second-best time? Today.
Most MSP owners wait until they’re exhausted, burned out, or hit some life milestone before they even consider exit planning. By then, they’ve got a business stuffed with inefficiencies, tangled financials, and a valuation that makes them want to cry.
The fix: Start treating exit planning as an ongoing part of your business strategy. Not something you’ll get to “someday.” Carve out time now, even just a few hours a quarter, to evaluate your business through a buyer’s eyes. What would they see? What would scare them away?
Mistake #2: Believing Your Business Is Worth More Than It Is
We get it. You’ve poured your soul into this thing. Late nights. Missed soccer games. Stress-induced gray hairs.
But emotional investment doesn’t equal market value.
MSP owners consistently overestimate what their business is worth. And when you walk into negotiations with fairy-tale numbers in your head, you’re setting yourself up for a painful wake-up call, or worse, a deal that falls apart completely.
This is especially common for MSPs that recently transitioned from reseller models to recurring revenue. Yes, MRR is sexy. But buyers aren’t stupid. They can see the difference between established recurring revenue and “we just started doing this eighteen months ago.”
The fix: Get regular, professional business valuations. Not from your buddy who “knows a guy.” From someone who actually understands the MSP space. Have them recast your financials and strip out all those personal expenses you’ve been running through the business (not that we know anybody who did that). You need to see your actual market value, not the number that makes you feel good.
Mistake #3: Playing Fantasy Football With Your Financial Forecasts
Listen, optimism is great. But when you’re showing potential buyers revenue projections that look like a hockey stick drawn by a toddler on a sugar high, you’ve got a problem.
Buyers aren’t dumb. They’ve seen every trick in the book. And when your projections don’t match your historical performance? Red flags. Everywhere.
Also, and this is a big one, if a huge chunk of your revenue comes from product sales instead of managed services, buyers are going to discount your value significantly. Product revenue is unpredictable. Recurring revenue is gold.
The fix: Be conservative. Be honest. Document exactly how your revenue breaks down between recurring services and one-time sales. Show buyers the stability of your MRR and explain your realistic growth trajectory based on actual performance. Buyers respect honesty. They reward it, too.
Mistake #4: Letting Due Diligence Turn Into a Circus
Without proper structure, the M&A process can drag on forever. And I mean forever.
You start talking to a potential buyer. They want documents. You scramble to find documents. They have questions. You answer questions while simultaneously trying to run your business. Months pass. Nothing happens. You’re exhausted. They lose interest.
Sound familiar?
The fix: Hire a financial advisor or M&A specialist who can quarterback the process before you start talking to buyers. Someone who will organize your information, manage communications, and keep everything moving forward. This isn’t an expense, it’s an investment that prevents you from leaving money on the table or watching deals die slow, painful deaths.
Mistake #5: Being the Irreplaceable Hero of Your Own Story
Here’s a hard question: If you got hit by a bus tomorrow, what would happen to your business?
If the answer is “total chaos” or “it would probably collapse within six months,” congratulations, you’ve made yourself indispensable. And that is terrible for your exit value.
Buyers don’t want to purchase a job. They want to purchase a business. If every key client relationship runs through you, if you’re the only one who knows how the billing system works, if critical operational knowledge lives exclusively in your head, your business is worth a fraction of what it could be.
This is the MSP hamster wheel in its most dangerous form. You’re running faster and faster, but you’ve built a machine that can’t function without you at the center.
The fix: Start building yourself out of the business now. Document your processes. Train your team. Delegate key client relationships. Create systems that run without your constant involvement. This takes time, sometimes years, which is exactly why you can’t wait until you’re “ready to sell.”
Mistake #6: Ignoring Taxes Until It’s Too Late
So you sell your business for $2 million. Amazing! Time to celebrate!
Then your accountant calls.
“So about those capital gains taxes…”
Suddenly that $2 million feels a lot smaller. And if you haven’t planned ahead, you could watch a massive chunk of your proceeds evaporate to taxes, state obligations, and fees you never anticipated.
The fix: Work with a comprehensive team, wealth advisor, M&A attorney, estate planning attorney, well before you’re in active sale negotiations. Model out your personal financial plan. Figure out exactly how much you need from the transaction to support your retirement, your lifestyle, and your legacy goals. Then structure the deal accordingly.
Mistake #7: Trying to Go It Alone
You’re an MSP owner. You’re used to figuring things out. Building solutions. Solving problems.
But exiting your business? This isn’t a DIY project.
There are legal agreements, tax strategies, buyer negotiations, financial analyses, and about a hundred other moving parts that most owner-operators simply cannot handle while also running daily operations. Trying to do it all yourself is a recipe for mistakes, missed opportunities, and a lot of unnecessary stress.
The fix: Assemble your team early. Financial advisor. M&A attorney. Estate planning attorney. Someone with actual exit planning experience in the MSP space. These people will protect your interests, catch problems before they become disasters, and help you maximize the value of everything you’ve built.
And hey: if you want to connect with other MSP owners who are navigating the same challenges, our peer groups might be exactly what you need.
The Bottom Line
Exiting your MSP isn’t something that just happens to you. It’s something you engineer: or it’s something you fumble.
The owners who get the best outcomes? They start planning years in advance. They get honest about their valuation. They build businesses that don’t depend on them. And they surround themselves with the right advisors.
The owners who don’t? They leave hundreds of thousands of dollars on the table. Or they never sell at all.
Which one do you want to be?
If you want to know what your business might be worth and what you need to do to increase the value take our Value Builder Assessment her for free!
If you’re serious about building an MSP that’s actually sellable: one that commands top dollar when you’re ready to walk away: check out our Free MSP Value Builder Challenge. Because what better day to start than today?