When was the last time you attended a live event? Not a concert or an improv comedy show but a live business event with your peers and industry experts. We’re talking about people who might be more intelligent and experienced than you in your business. It takes a big person to admit they don’t know everything. Additionally, it’s been said that you won’t grow until you’re willing to push yourself towards the other side of fear. Two of our biggest fears are often putting ourselves out there and asking for help for many of us. You could be in the mindset that you don’t know what you’re doing, and it isn’t very comfortable. For others, you might look at it as, “I need to put myself in the room with others doing it at the highest level.” If you’re of the latter, you might want to consider attending a live event if you’re looking to increase your company’s value and eventually sell it.
Reed Warren has been in the M&A industry for over a decade. If there’s one thing he’s learned, collaborating and learning from others is the quickest route toward your success. He recently attended one of the EVOLVE IT Nation peer group events and wanted to share the most important lessons he learned to help your business.
Here are Reed’s 5 most important takeaways from a recent peer group event:
Takeaway #1: If you don’t have a cybersecurity solution, you need to get one.
Increased IT and Managed Services Provider (MSP) firms recognize the need to have a comprehensive cybersecurity solution in their services. Those who haven’t have been getting a humbling dose of reality. Most firms don’t recognize that you’re ultimately responsible for every transaction or piece of confidential data that runs through your company’s servers. You’re playing with fire if your company doesn’t comply with the National Institute of Standards and Technology (NIST). So, it would help you to have a strategic plan and cybersecurity solution for all your customers.
Suppose you’re a small MSP firm and just starting. In that case, it’s understandable that you don’t have all the latest high-tech equipment or comprehensive strategies in place. However, that isn’t a reason not to have a cybersecurity answer for your customers.
Here are a few steps to help you get started on a cybersecurity solution:
- Take measures to become NIST compliant.
- Outsource cybersecurity to a cybersecurity expert.
- Bring in a consultant to help you make the right decisions.
Takeaway #2: Take advantage of the rising tide.
We haven’t seen market growth from a valuation perspective this high since 2018. The market is doing quite well for cybersecurity, MSP, and IT firms. So, you need to take advantage of the rising tide while the market demand is there. Companies saw a 10-15% growth rate without sales and marketing in 2021. This exponential growth rate has overflowed into 2022, and it’s an exciting time to sell your business.
If your overall goal is to sell your business, contact your M&A advisor. Your advisor will help you gauge your firm’s valuation and estimate what you stand to lose if you don’t take advantage of the market in the present. So, consider your advisor as a resource for your business to help you get to where you want to be—a profitable exit.
Takeaway #3: Accept help from others.
This is a big one. We’ve seen numerous MSP firms think that they’re on their own island. They often feel like they’re the only ones struggling with acquiring new customers, dealing with a fluctuating EBITDA, or fumbling with their financial numbers. For one, you’re not alone. Countless other MSP firms have gone through what you’re going through right NOW. Two, it takes great humility to acknowledge that you don’t have all the answers. However, you won’t fear NOT being the most intelligent person in the room once you do. You’ll be open to innovative ideas and perspectives that will help you get from point A to point B quicker and with increased efficiency. Three, people want to share their wisdom with you, but you must ask for help.
Here are several vital resources that have been instrumental in the growth of iTV:
- EVOLVE– MSP and IT firm: business operations, methods, sales, and marketing
- Taylor Business Group– Understanding the financial aspect of your business
- Robin Robbins– IT sales proficiency
Takeaway #4: Go to events like ChannelPro or IT Nation
You’ve probably heard that famous Jim Rohn cliché saying, “You are the average of the five people you spend the most time with.” Jim Rohn was an American entrepreneur, author, and motivational speaker for those unfamiliar with him. It’s true, and that’s why immersing yourself in live events by ChannelPro or IT nation is well worth your while. Each time you attend one of these events, you expand your horizons and learn something new. You’ll hear the difficulties of different business scenarios from experts who’ve been in your shoes. It’s also a fantastic way to put yourself out there, get great exposure, and network with people you might’ve never met before.
There are so many great opportunities at live events, and here are a few we enjoy attending:
Takeaway #5: You need to run your business like you’re going to sell it.
If your overall goal is to sell your IT firm, it doesn’t matter if you’re a 5 million dollar firm or a 50 million dollar firm. You’re looking at an estimated 3-year journey towards selling your business. To get to your destination, you need to focus on all the RIGHT things for your business. You’re not looking to pad your company’s bottom line for immediate validation. Instead, you’re running your business healthily and sustainably, targeting long-term growth. Your overall business attitude must come into play in how you invest, grow, and run your company’s daily operations.
You need to engage with an M&A advisor to help you with many business priorities. However, here are the essential items to start with:
- Stop focusing on short-term tax cuts and prioritize increasing your firm’s long-term value.
- Focus on your firm’s profitability.
- Understand that your firm’s profitability is the baseline for any multiple to gauge the financial health of your business.
If you’re looking for ways to increase your IT firm’s overall value and provide you with an easy-to-implement strategy for reaching your business goals, click here to contact us.