Every IT founder I've talked to in the last six months has asked me some version of the same question, usually buried under three or four other questions:

"What's my business actually worth?"

Not what the broker says. Not what the neighbor who sold his HVAC business says. Not what the Reddit thread claimed last week. What it's ACTUALLY worth to a buyer who understands what they're looking at.

The honest answer for most IT founders is uncomfortable: your business is probably worth more than a generic broker will tell you, and less than the number in your head. The gap between those two numbers is where most of the money gets left on the table.

Here's why that happens, and what to do about it if you're 12-36 months from your exit.

Reason 1 — Your broker doesn't understand your tech stack

Most business brokers can move a restaurant, a landscaping company, or an HVAC shop. They know the multiples, the working capital norms, and the buyer profiles for those categories.

Then they get an IT services business — an MSP, a cybersecurity firm, a dev shop — and they apply the same generic framework. They value your recurring revenue at project-revenue multiples. They discount your technical documentation because they don't know how to describe it. They miss the fact that your team-owned client relationships are a premium multiplier, not a footnote.

The result: your business gets marketed to buyers who don't understand what they're looking at, and priced at a discount because your broker can't explain the technical assets that make you differentiated.

What to do about it. Either find a broker with genuine IT M&A experience (rare and expensive), or bypass the broker entirely and work with a direct buyer who lives in your world. Fewer parties in the deal means fewer chances for your value to get lost in translation.

Reason 2 — You've never framed your revenue the way buyers score it

Ask an IT founder about revenue and they usually give you a single number. Ask a sophisticated buyer about revenue and they want it split five ways: managed services MRR, project-based revenue, break/fix, product resale, and professional services hours.

Why the split matters: each revenue type gets a different multiple.

Market anchor for context: the average technology services business sells for 2.7-3x adjusted EBITDA in 2026. That's what SBA banks fund. Well-positioned businesses with strong recurring revenue can reach 3-4x. Premium and rare-strategic cases occasionally reach 4-5x.

If your revenue is 70% managed services and 30% project work but you present it as a single number, the buyer prices it at a blended discount. If you present it in a stacked format that shows the MRR portion clearly, the buyer prices each layer at its actual value. Same business, materially different offer.

What to do about it. Restructure your P&L for the next 12 months to show revenue by type, not just by client. A one-page "revenue composition" summary that shows recurring vs. non-recurring is worth actual dollars at exit.

Reason 3 — You've optimized your tax return, not your sale price

Every IT founder I know has been coached by a CPA to minimize taxes. Fair. Nobody wants to pay Uncle Sam more than necessary.

But here's the trap: your tax return is the ONE document SBA lenders and sophisticated buyers trust above all others. Internal P&Ls can be adjusted. Tax returns are IRS-verified. If your tax return shows $200K in reported income because you've aggressively minimized (owner comp through S-corp distributions, all vehicles business-titled, home office deductions, family members on payroll), the bank underwrites your sale at the tax-return number, not your adjusted EBITDA.

The gap between "what my CPA showed the IRS" and "what my business really earned" gets left on the table unless you can DEFEND your tax posture as an intentional strategy.

What to do about it. Two moves, both starting 12-18 months before you want to sell. First, have your CPA prepare a "tax strategy defense document" that articulates every material minimization technique used, why it was chosen, and how it would translate to real cash if the business were operated by a new owner. Second, consider whether some of the minimization should unwind. The 20% you save in taxes over three years might cost you 3-4x that amount at exit if the SBA lender caps your valuation to reported income.

Reason 4 — You ARE the business (and don't know it)

Ask an IT founder if their business could run without them for 30 days. Most say yes, confidently.

Then ask them: how many decisions per week route through them personally? How many of their top 10 client relationships would consider them the primary contact? What percentage of new business closes without them on the call?

The answers usually reveal a business that runs FINE with the owner present, but has quiet key-person risk baked into every operational layer. Buyers see this immediately, and they price it as a discount that can hit 40-60% of what the business would otherwise be worth.

What to do about it. The 30-day vacation test is your diagnostic. Actually take the vacation, actually don't respond to calls or emails, and see what happens. Then work backward from what broke. Delegate the decision types that shouldn't need you. Move your top-10 client relationships to your senior team. Hire or promote a general manager if you don't have one. This is a 12-24 month project, not a 30-day fix.

Reason 5 — You've never spoken the metrics language buyers actually use

If you can't explain your business using NRR, GRR, gross margin trend, CAC payback, and Rule of 40, sophisticated buyers assume you don't run the business at that level of sophistication. Whether or not that's true, it becomes true in the buyer's mental model, and it costs you multiple.

The gap isn't operational. You probably KNOW most of these numbers directionally. The gap is that you've never packaged them the way a buyer wants to see them. Build a one-page metrics dashboard that shows these five numbers for the last 12 quarters, and you've done something 90% of small IT founders never do.

What to do about it. You don't need a fractional CFO for this (yet). A well-built spreadsheet, updated monthly, will get you 80% of the way. Then when a buyer asks, you hand them the dashboard. That single asset can move your multiple by 0.5-1.0x.

The pattern behind the five reasons

Notice what all five have in common: they're framing problems, not fundamental business problems.

Your IT business probably IS worth more than the number a generic broker would produce. The reason you'd get that lower number is that the value is packaged, presented, and defended poorly, not because the value isn't there.

Which means the work between now and your exit isn't primarily about growing the business. It's about MAKING THE VALUE VISIBLE to the right buyers.

That work takes 12-24 months to do properly. Which means the best time to start is 24-36 months before you actually want to sell. Not when you're already tired. Not when you've decided to sell next quarter. Not when a broker shows up with a term sheet.