How do I check an IT services company’s managed-service contracts before buying?

Collect every agreement and build a simple table: client, services included, start date, term, renewal terms, notice needed to leave, and fee. Look for clauses on assignment or change of control, since some require the client to agree to the sale. Your lawyer should read the key ones.

Next, check the work against the price. Ask for ticket history and hours by client, and see which accounts demand much more than they pay. Look for services promised in the contract that the firm quietly performs for free, and for clients on old pricing.

Test dependence. Find out which technician knows each client’s systems, and whether documentation exists for passwords, networks and backups. If this lives in one person’s head, you risk losing both skills and access. Ask about incidents and security. Has any client suffered a breach, outage or lost data while under the firm’s care? Ask about the firm’s own insurance and how it protects client data. Finally, check whether the firm resells services from other providers and whether those arrangements also pass to you. Finally, think about how the contracts were won. Ask whether clients came by referral or by selling effort from the owner, and whether the pipeline continues without them. Recurring contracts hold value only while new ones replace those that end.

Key takeaways

• Tabulate scope, term, renewal and exit terms for every client.
• Compare each fee with the hours that account really uses.
• Ask which technicians hold the knowledge of each client.