Every MSP owner eventually faces the same question: What happens to the business when I’m ready to step away? Whether you’re planning years ahead or just starting to feel the pull toward retirement, the decision to sell your business, and how to sell it, will shape your legacy, your team’s future, and your own peace of mind.
The good news? You have options. The not-so-good news? Each one comes with trade-offs.
Editor’s note: ChannelPro has compiled numerous resources for you in our M&A and Succession Planning Answer Center to assist you along the way.
This article breaks down the two most common exit paths: passing the business to someone already inside it (internal succession), or selling it to an outside buyer (external sale). Understanding the pros, cons, and timing for each approach will help you choose the exit path that best fits your goals, both financial and personal.
Internal Succession
An internal succession means transferring ownership of your MSP to someone already inside the business. That could be a partner, a family member, a long-time employee, or even a rising star who’s expressed interest in taking the reins.
This route tends to be more personal. You’ve worked closely with this person, you trust them, and you likely want them to succeed. In many cases, internal transitions happen gradually, with ownership changing hands over months or even years.
Why some MSPs choose this route:
- You want to preserve your company culture
- You feel loyalty to your team and clients
- You want to ease out gradually, not exit overnight
- You’re open to seller financing or profit-sharing over time
External Sale
An external sale involves selling your MSP to a third party — typically a larger MSP, private equity-backed group, or independent buyer. These buyers may be local or national, strategic or financial, hands-on or hands-off.
External buyers usually bring capital to the table, and the transaction often happens more quickly than an internal succession. They may want to keep your brand intact or fold your team and clients into a larger structure.
Why some MSPs go this route:
- You want a clean exit with a larger upfront payout
- There’s no clear successor internally
- You’re nearing retirement and ready to step away
- You’re aiming for a valuation-based transaction, not a relationship-driven one
Comparing the Two Exit Paths
Here’s how internal succession and external sales typically stack up across key decision areas:
| Factor | Internal Succession | External Sale |
| Timeline | Gradual (6–36 months) | Often faster (3–9 months) |
| Financial Payout | Smaller up front, possibly seller-financed | Larger upfront payout (if cash deal) |
| Cultural Continuity | High — team and clients stay with familiar faces | Can vary — depends on buyer’s integration plans |
| Deal Complexity | Relational and flexible | More formal, may involve legal/tax complexities |
| Personal Involvement Post-Sale | Often ongoing in advisory or mentorship role | May be short-term (e.g., 6–12 months transition) |
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