What is my IT services or MSP business worth?

Worked example

Hypothetical. An MSP near BizBuySell's median sold IT services business (about $876K revenue and $248K owner earnings). About 65% of revenue is monthly managed-service agreements; a service manager runs the help desk.

• Revenue $875,000, owner earnings (SDE) $250,000, 12 years, about 65% recurring, “I manage, my team does the work”.
• Start at the published 3.22× average.
• Owner involvement: I manage, my team does the work: +0.15×. Buyers pay more when the business runs without the owner.
• Recurring revenue 60%+: +0.25×. Contracts and memberships make next year's revenue predictable.
• 12 years in business: +0.10×. Long, proven history.
• Adjusted multiple 3.72× × $250,000 = $930,000, range $660,000 – $1,160,000.
• Revenue cross-check: $875,000 × 1.08× = $945,000.

Calculating SDE for a IT services or MSP business

Start from net profit on your tax return or P&L, then add back:

• Owner salary and payroll taxes
• Owner's personal vehicle, phone and travel
• Depreciation and amortization
• Interest
• One-time tool migrations or legal costs

Only add back what a buyer can verify. See SDE explained: how to calculate owner earnings and add-backs for a full walkthrough.

If there are two working owners, the second owner's salary usually stays as a cost, because a buyer will need to replace that person.