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Growth trajectory can also add significant value to a company, Teichman said. For example, a $7 million company that's grown 30 percent for the last three years is a more interesting target than a $10 million company that hasn't grown for three years, he said.
"It's all to predict the future. When you buy a firm, you're buying the future and confidence in that prediction. The longer they've been growing, the more confidence that will continue," Teichman said. "The fact they hit some phenomenal sales recently, but is it a bump or is it reality? Do they have a sales engine?"
Some MSP owners might feel they can't sell a company coming off its best year, but the truth is that is when the company is most valuable. But finding the perfect time to sell is an elusive, moving target.
In general, business owners should always run their company as if you're going to sell it.
"Absolutely, even if there's a good chance you're not selling. Was it a wasted effort? Absolutely not. You're still helping you help your employees," Teichman said.
Finally, having vertical market expertise is also highly-sought after, Teichman said. All Covered recently bought a company with educational expertise, skills that it intends to roll out across its entire customer base.
"There's additional strategic value. It's an opportunity to leverage it out to the rest of your [operations]," Teichman said.