From Owner to Employee: Navigating a New Role After Selling Your MSP
You’re selling your MSP business. Maybe you already have. Now what?
For some, the answer to this question is: relax on a beach, margarita in hand – or some version of that. And there’s nothing wrong with that! Selling your MSP business can be your ticket to a leisurely – and financially secure – retirement.
But what if you’re not ready to ride off into the sunset just yet? What if your passion for managed services still burns, and you want to continue working in the IT industry?
Nothing wrong with that either! Plenty of MSP owners have entered the mergers and acquisitions (M&A) space with no intention of retiring or even leaving the IT sector.
If you’re looking to sell your MSP but not exit the industry – or if you’ve already sold your company and now find yourself in a new role – you’ve come to the right place. In this article, we’re discussing how to make the most of your transition from owner to employee after the sale of your MSP business.
Our focus will be on situations where you join the team of the company acquiring yours. That said, if you’re pursuing a position elsewhere in the industry, a lot of the advice will still hold value.
Let’s jump right in!
Why Stick Around?
Let’s start with a basic question: Why do some MSP owners choose to sell their businesses without subsequently exiting the industry?
Here are some of the more common reasons…
Sweet Deal
Some MSP owners approach the table because they’ve found the ideal buyer – or an offer that’s simply too good to pass up – and not because they’re feeling burned out or ready for retirement. This isn’t uncommon, as the M&A market has once again heated up in 2024, with many interested buyers competing over high-performing MSPs.
All things being equal, it’s a great time to sell an MSP! If you play your cards right, you can make your exit with a big paycheck in hand.
Staying Alive
Some MSP owners strike deals because they’re thinking ahead and anticipating the difficulty of remaining competitive without adding new services, skills, etc.
According to Datto’s Global State of the MSP Report, for the third consecutive year, MSPs worldwide cited competition as their primary challenge, with 35% highlighting it, up from 29% in 2022. Finding a competitive edge is more crucial than ever, and consolidation offers ambitious MSP executives a promising route to securing an advantage by ‘leveling up’ their services, teams, and market reach.
Ready for Help
Finally, there are those MSP owners who are looking to sell because they’re tired – tired of running the show and having to wear all sorts of ‘hats’ just to keep their companies afloat. Some of these executives really enjoy a particular aspect of running an MSP (e.g., sales or operations), and want to focus on doing that one thing extremely well.
Selling offers these entrepreneurs a promising route to a more manageable work schedule, as well as a more specialized role that allows them to focus on what they enjoy doing and know how to do well. Come to think of it, becoming a member of The 20 helps with those things, too!
From Owner to Employee
Bottom line, there are plenty of good reasons to sell your MSP without the intention of retiring or even leaving the industry.
So, let’s get into the meat of our discussion: making a successful transition from an MSP owner to an MSP employee.
This blog post accompanies a short video featuring former MSP owners now thriving in new roles at The 20. Check out the video to hear their firsthand accounts of the transition “from owner to employee.”
What makes for a successful transition from MSP owner to MSP employee? Let’s start with a simple but illuminating answer:
If your plan is to keep going, you need to set yourself up to do exactly that – keep going.
Think about it. You’re not retiring. You’re not even changing industries. You’ve decided to remain a managed services professional, albeit in a new role. So, it’s important, for your own wellbeing – both professional and personal – to put yourself in a position that you find energizing and fulfilling. This is especially crucial if the reason you’re selling in the first place is fatigue, or even burnout.
But how do you do that? In practical terms, what is the best way to ensure that you find fulfillment in your new role?
After completing numerous MSP acquisitions (thirty-three at the time of this writing), we’ve witnessed plenty of MSP owners make the transition from owner to employee. Seeing their journeys has taught us a lot about what a successful transition involves.
And now we’re sharing key lessons with you…
Work Your Magic
After years spent running an MSP business, you probably have a pretty good idea of what you’re good at – and not so good at. You also likely know which aspects of the job bring you the most enjoyment.
In the short video, you’ll meet Gary Blawat, who loves MSP sales. You’ll also hear from Kevin Peterson, a self-proclaimed “operator at heart.” After selling their MSPs to The 20, Gary and Kevin took on new roles within the company which allowed them to focus on sales and operations respectively.
When pursuing a new position post-sale (and negotiating its terms), we recommend that you follow in Gary and Kevin’s footsteps and find a role that allows you to work your magic. Doing so will make a huge difference when it comes to staying motivated and engaged. Just ask Kevin:
“I’m able to focus most of my time on doing what I’m really good at and what I love doing. I get up every morning and I know I’m making a difference … I love what I’m doing.”
Shared Vision
Tim Knarr sold his MSP to The 20 back in 2022 and is now doing big things as our VP of Regional Operations. In the video. Tim talks about “the dream” of The 20 – the dream of the billion-dollar MSP. It’s a dream he believes in and feels connected to.
This brings us to another important point about securing satisfaction in your post-sale role: in addition to landing the right role, you’ll also want to join the right team.
More specifically, you should strive to become part of a team with goals and a long-term growth plan that excite you. You’re committed to sticking around after selling your MSP, so it only makes sense to join a company that’s not only going places, but places you want to go.
If you’re planning on working for the company that acquires your MSP, picking the right organization means picking the right buyer, and that begins with thoroughly vetting any potential buyer (for tips on vetting buyers and much more, make sure to download our free MSP acquisitions guide, “Sell Your MSP the Right Way”).
Invest to Stay Invested
Landing a role that lets you focus on what you like doing, joining a team whose vision you share – both of these things will help you remain engaged in your new role. But you know what will really help you stay invested?
Investing!
After selling your MSP, you can take a portion of the proceeds from the sale to purchase shares or equity in the acquiring company, giving you a vested interest in the combined entity’s success.
That’s a big part of our deal structure here at The 20. In the video, you’ll hear from Caleb Brown on the value of being a shareholder, and how it gives him a robust “sense of ownership with what we’re building now” – a national MSP with premium service delivery! It also doesn’t hurt that these owners-turned-shareholders will get a ‘second bite of the apple’ further down the line if and when The 20 gets acquired.
For a closer look at The 20’s approach to acquisitions and how it compares to some other prominent M&A players’ strategies, check out this excellent article from Channelholic.
Balancing Act
Perhaps the most profound observation from our interviews with MSP-owners-turned employees came from Michael Vu, who spoke about finding a healthier work/life balance after the sale of his MSP business.
Michael, like almost all of the MSP owners who sell to The 20, chose to remain on board in a new leadership position. He’s since discovered that he has, in his new role, a lot more time to spend with his family. Making room for family – for life – can be hard
when you’re captain of the ship. As Michael points out, “when you’re running your business from top to bottom, it takes ninety-nine percent of your energy and focus.”
Word to the wise: finding a more suitable work/life balance after selling your MSP can be easier said than done. After spending years at the helm of your company, you’ve likely grown accustomed to the perpetual grind. Just know that it can be difficult to adopt a new mindset once you’ve sold your MSP. However, doing so can work wonders for your overall wellbeing.
Remember, you did something special – you built and sold a company! Take time to savor your achievement, and be wary of falling back into the same relentless pace that defined your days as an owner.
Wrapping Up
Selling your MSP is a big decision – one of the biggest decisions you’ll ever make. It can also mean a transition to a new role. In our experience working with MSP owners who make this jump, it’s not so much stepping back as it is stepping up.
You’re stepping up to a new challenge. You’re seizing an opportunity to focus on what you’re good at and enjoy doing. You’re getting access to a larger team with better tools and processes to help your clients thrive.
This isn’t a demotion however you slice it. It’s the next chapter of your story, and it’s brimming with potential. So embrace your new role, because there’s a good chance the best is yet to come.
Need Some M&A Guidance?
If you’re thinking about selling your MSP or entering a merger, we’re here to help.
Check out our revamped guide to MSP acquisitions, “Sell Your MSP the Right Way” for practical advice and proven tips. Get your free download today.
Looking for direct feedback on your exit strategy? Set up a 1-hour call with Tim Conkle, Founder and CEO of The 20 and leading expert on MSP acquisitions.
Happy dealmaking!