way you go , the road to get there doesn ’ t fundamentally change . Clear operational readiness will either make you attractive to someone looking to acquire or stable enough to acquire others yourself . A quality business means creating enterprise value , and the core of that value comes from knowing your numbers and having a great culture .
Know Your Numbers
No matter what the business is , every time you watch an episode of “ Shark Tank ,” what ’ s the first thing you always hear the Sharks ask the entrepreneurs ? “ What are your numbers ?” If they don ’ t know them , the investors won ’ t know if it ’ s a business worth getting into . If you don ’ t know your numbers , you can ’ t know if you ’ re moving backward or forward . Operational metrics , sales , marketing , and finance are what help you make decisions . They are fundamentals that need to be at the forefront of every business . There are a lot of metrics to know , and it might not be the most exciting part of the job , but it is one of the most important parts of any M & A deal . Know all the numbers , even the seemingly obscure ones , such as days outstanding , employee utilization , service capacity , customer satisfaction , number of tickets closed — these are all important because you can ’ t manage what you don ’ t measure .
Have A Great Culture
Your management team is the biggest indicator of how healthy your company ’ s culture is , and culture displays the personality of your business . If you ’ re looking to acquire another MSP , you have to make sure it ’ s the right fit . Money matters , but if personality drags operations down , profits can ’ t fix it . You achieve great management and , subsequently , great culture by having people in positions that work on your business , not just in your business . Your team members should be thinking about how to help the company grow rather than just mindlessly putting out everyday fires . Foster a culture and personality that wants great things for the business . You ’ ll be a standout for any MSP looking to acquire you , and you ’ ll recognize kindred personality in those who you ’ re looking to acquire .
It All Points To Profit
Everything is a driver to profit . Every MSP wants to drive as much to the bottom line as possible , and operational readiness is what fuels that action . Ultimately , when you look at your numbers and culture , you ’ re looking at your valuation , and that valuation points directly to how well your MSP builds profit . “ By and large , creating profit means making your employees more efficient , and you make employees more efficient with a platform that revolves around automation ,” says Lippie . “ Automation allows you to service a lot more customers with a lot less resources . When technicians bounce around between 10 different applications to tackle 10 different activities in a day , they ’ re wasting time , which means they ’ re not maximizing profit .” Consolidating everything into one platform that allows technicians to handle all those activities in one place makes them more efficient and creates more profit .
Platform Is King
Having a comprehensive IT management platform in place is the entire backbone of your services , and that ’ s why so much recent M & A activity has centered around platform . The industry has gravitated toward comprehensive IT infrastructure platforms that offer a range of monitoring and management , automation , security , and data protection services . A platform is a great inheritance for a first-generation buyer looking for technical maturity . A well-financed but technologically lagging MSP will receive an instant upgrade from an expanded , well-implemented platform .
Smart processes , solid strategy , and modern thinking automatically make an MSP more attractive or qualified when it comes to M & As . A well-integrated platform demonstrates all of those and has enormous implications for both buyers and sellers .
The trend is already here ; we ’ re in the midst of it . Now , it ’ s time to help your MSP create a successful transition into your next phase , whatever it may be . n
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