Jumpstart Entry into Managed IT Services through Acquisitions23 Apr, 2014 By: Michael Amiri, Continuum
When office equipment dealers enter into the managed IT services space, all things equal, the average dealership captures about 100 contracts in the first three years – 15 in the first, 35 in the second and 50 in the third. Not too bad for starting out, but if that growth rate is not fast enough for your dealership, there’s good news. Claiming 100-150 contracts in the first year is possible through strategic acquisitions of current Managed Services Providers (MSPs) in your local geography, which can come with many benefits.
In addition to gaining immediate contracts that can help pay back the capital laid out for an acquisition, acquiring a MSP can get office equipment dealers immediate visibility into managed IT services. Acquisitions also come with immediate staff – but not just any staff – deep expertise in managed IT services that would otherwise take time to build in this unfamiliar territory. This is all valuable in jumpstarting entry into managed IT services and accelerating business growth, but that’s not all.
Continuum assists office equipment dealers as well as MSPs throughout the acquisition process. Continuum knows what a good MSP looks like and can help identify them for interested dealers. In fact, Continuum knows its 3500+ MSP partners well, and without putting a “for sale” sign on anyone, continuously has conversations with them to clarify who might be ideal fits to become part of a larger organization with greater growth opportunities. Through these conversations, we can match the right office equipment dealers with the right MSP to begin talking about the possibilities.
Due diligence is important to acquisition success, including ensuring the eyed MSP has the managed contracts they claim. Continuum helps in this initial phase, but allows office equipment dealers and MSPs talk to ensure it makes sense for both parties. Once these confidential conversations have taken place and both parties have decided to move forward, Continuum re-engages to help integrate the two organizations. Sales training is a big part, helping to provide the office equipment dealer’s sales staff the necessary tools for selling managed IT services. Continuum is heavily involved post-acquisition so that both parties have all the right tools, information and know-how to be successful.
Growth Achievement Partners (GAP) also does a wealth of work in this area by analyzing MSP businesses and coaching office equipment dealers as to the qualities that would best fit their specific business goals. They are involved in establishing credible valuations of the MSPs and working to ensure a benefit for both sides. Continuum co-authored a breakthrough Managed IT Services Business Model Report with GAP, specifically designed to help office equipment dealers make a successful leap into managed IT services. Continuum and GAP work to ensure this revolutionary business model guides both parties to a successful transaction.
Interested in accelerating your entry into managed IT services? Continuum has a wealth of experience in assisting office equipment dealers make a splash by acquiring targeted MSPs as an alternative to traditional organic sales activities that may not produce the ideal growth forecasts. An office equipment dealer joining forces with the right MSP, backed with support from Continuum is a recipe for immediate success.
For more information on making the leap into managed IT services, visit: http://www.continuum.net/oe.
Michael Amiri and his dealer support team can be reached at OE@continuum.net