Episode Details

In this episode, we explore the different ways MSPs can value a business during the acquisition qualification stage. We discuss several common valuation approaches, including book value (net assets), profit-based multiples such as EBITDA, and the cost of building a similar business from scratch. Looking at a business through multiple valuation methods helps provide a balanced perspective, particularly when comparing the seller’s expectations with what lenders or investors may consider realistic. We also highlight the importance of assessing intangible factors such as reputation, client relationships, staff capability, and future growth potential. Finally, we outline warning signs to watch for, including excessive debt, unstable revenue, poor reputation, complex ownership structures, or uncooperative sellers, and emphasise the importance of trusting your judgement and seeking independent advice where necessary. 

Mike Knight MBA FCIM  Director, MKLINK Ltd