The economics here are the best in professional services, when the recurring revenue is real. Contracted managed services command multiples no project business gets close to, because the relationship is structural rather than personal. The catch, and the thing most owners have never actually measured, is what share of revenue truly renews without anyone selling it.
That number decides how the business is valued, and owners are frequently surprised by it. A firm that calls itself managed services while earning most of its money from break-fix and projects is valued as a project business, correctly, no matter what the website says. The gap between claimed and actual recurring revenue is where valuations get cut in diligence.
What makes it hard
- Recurring contract revenue that carries a premium, if it is real
- The gap between claimed and actual recurring revenue
- Client relationships that are structural rather than personal
- Tooling and licensing costs compressing margin as you scale
- Security and compliance obligations rising with every client
How we partner
We start by separating genuine recurring revenue from project and break-fix work, so the number a buyer will actually credit is known, and the part that carries the multiple can be grown. Most owners find the picture is different, and more fixable, than they assumed.
From there we work on the levers that decide value here: real contract quality, margin as tooling and licensing scale, and, in a consolidating market, an independent read on what the business is worth before someone else sets the price. We work alongside you and, where it fits, our fee follows the result.
Who this is for
MSPs who want to know what share of revenue is genuinely recurring.
Owners in a consolidating market who need an independent view of value.