What it takes to sell an ICT business
Preparing your business for sale is no easy task. There are endless ducks to get in a row, strategies to plan, messages to communicate, finances to get ship-shape, and potential buyers to network with.
As a specialist ICT marketing partner, Mogrify works with channel partners to support numerous marketing goals, one of which is getting acquired.
“There is a massive amount of consolidation currently occurring in the Australian channel. In the past few years, no less than seven of Mogrify’s customers have been acquired, three of which have been in the last six months,” says Melanie Unwin, Director at Mogrify.
So, what was it that made these businesses buy-able? How can you support acquisition with strategic marketing? Here, we share the insights gleaned from our recent experiences, and wisdom from customers past and present who have been acquired.
Six key considerations when planning an acquisition strategy
1. Do you have a clear purpose?
What makes you get out of bed every day? If you find that a tough question to answer, then chances are your purpose isn’t clear.
According to Dean Robertson, CEO and Founder of Mexia (and former Mogrify customer), having a dogmatic vision about where the company is going and why is essential. He says, "everyone needs to be connected to a purpose, and they enjoy the feeling when we all make progress together."
2. Do you have an authentic culture?
Whatever the culture you have fostered, you need to ensure your staff align with your business values. If your core values are documented and are at the forefront when hiring (which they should be), then people who don’t align will likely stick out like a sore thumb and (whether deliberately or accidentally) cause teamwork and productivity issues.
“We’ve worked with customers who have referred to each other as "unicorns”, “bananas" and "nerds", which may seem, well, bananas but it resonates with the culture and attitude of the business. This is incredibly attractive to prospective buyers. Being able to see authentic culture is often deemed indicative of a happy and functional team,” says Melanie.
This was true in the case of Insync Technology, which was recently acquired by Rapid Circle.
“Businesses that encourage staff bonding and social activities will naturally have a more attractive and authentic culture. Likewise, businesses that support and invest in their staff will have a higher level of trust. This is important as it empowers staff to make decisions and this helps increase productivity and thus, profitability,” explains Nathan Belling, General Manager, Insync Technology.
Further, a strong culture is key for acquisition because you need the team to trust you to take, or lead, them into a new organisation and to continue to protect them in the event of an ‘us and them’ attitude from the acquiring company.
“Your team culture will be tested and challenged, sometimes accidentally, other times deliberately. A weak culture will die immediately in a new different environment. If it’s strong enough though, you’ll end up changing the acquiring firm’s culture for the better,” notes Belling.
3. Are you marketing your people?
Following on from establishing your authentic culture, you also need to showcase it. For example, when you successfully deliver client projects, celebrate and shout about the people who were involved.
Or when someone completes training or achieves a new certification, publicly congratulate and praise them.
“It often falls off the radar, or business owners are too nervous to do it, but marketing your people should be a focus. By shouting about your staff, you attract great talent, which in turn will help you market your business to investors,” explains Unwin.
4. Do your customers highlight your strengths?
Easy work makes money, but it doesn’t challenge your team or encourage professional development. To be seen as an exciting investment, you need to show that you are constantly pushing yourself, your team, and your business.
“Customers who have been acquired have all had a really strong focus on doing things differently. They have honed in on skills within their teams and enabled staff to grow and develop. This has in turn grown their perspective, offering, and experience, therefore attracting customers with more interesting challenges. They are in a constant cycle of always learning and improving which makes them more dynamic and forward thinking than their competitors,” says Unwin.
Shane Morgan, Founder and Sales Director at Bistech (acquired by Deloitte) commented, “We knew early on that by working with customers that had complex requirements and high expectations would drive our team to push the boundaries of what was possible. This meant that we were constantly striving to improve all aspects of the business – from hiring top quality people, to investing in training, and by partnering with vendors who enabled us to deliver the best outcome for the customer.”
5. Are all of your customers profitable?
Also on the customer front, buyers don’t want a business weighed down with difficult customers that are a drain on resources and margins.
“We had a reputable and well-known brand as a customer at one point. The team were excited when we won the account but they proved to be very challenging to work with. There was a complete misalignment with our values, it felt like they were just draining energy from our team and they weren’t prepared to pay for a commensurate service to their needs. It was a tough decision but after we chose to part ways and the whole team breathed a sigh of relief," says Stuart Moore, Director, Sales and Marketing at Insync Technology.
6. Focus on creating a happy business.
Sounds obvious but all too often an overarching desire to sell and make money can trickle down through an organisation with unpleasant results.
“Toxic cultures come from business owners chasing the gold at the end of the rainbow at all costs. Our most successful customers don't obsess over selling or profit, they focus on investing in their team and creating a company people want to work for and customers want to work with,” says Melanie.
According to Dean Robertson, a happy business means being surrounded by people that you want to spend time with.
Dean’s advice is "hire for behavioural alignment with your whole team AND yourself. Hire people that you actually enjoy working with and who enjoy your company too. Even if they have a valuable skill set, the last thing you want is people in your company that you try and avoid, because if you don’t like them there’s a good chance your customers won’t like them either."
Getting ready for the ride
The components that make your business attractive are so much more than just the bottom line. For some, getting acquisition ready can take a lot of time and effort, for others it is a simpler and shorter journey. Either way, the ride itself is quite something!
“It’s a thrilling process to be a part of, in spite of the fact that for us, acquirers often come with an inhouse marketing team which means the end of a Mogrify partnership. It’s bittersweet to say farewell to a customer because of their success!” concludes Unwin.
Francesca Roland is a content specialist at Mogrify, a channel specialist marketing agency. Melanie Unwin is the co-founder and director of Mogrify. She has been a Microsoft Partner Success Mentor since 2017 and has trained and mentored a large number of partners in Australia over the last seven years.