Acquisitions and Mergers Skills
In this blog, we’ll look at how to set a price on the company by ascertaining the value. And explores 50+ acquisitions and mergers skills before buying or selling companies and business.
Who Is Going to Buy the Company?
Consulting firms are typically acquired by other consulting firms who want to fill various gaps in their business or as a means for non-organic growth.
Skills acquisitions: Some acquisitions are about buying the skills you have on your team. This is often the case when a very large company is buying a much smaller organization that makes a product that will be discontinued.
For example, let’s say you have a consulting firm and a very large customer wants to go enterprise-wide with Apple devices. They might just acquire your firm to become their new support team so they can get the project done much quicker.
Customer acquisitions: Other acquisitions are all about customers. The purchaser might not want any of the databases or staff. This is common when getting gobbled up by a seemingly similar company, especially if they’re in the same geography and have been a long-time competitor.
Inorganic Growth: A traditionally Windows-centric MSP might want to add an Apple practice to their portfolio rather than build one from the ground up. Or another Apple practice might want to get into your geography, and instead of slowly starting to sell into that geography, they might want to buy an existing leader in the market.
Product: Another organization might be interested in acquiring yours because they want a product that you have developed. The services products are typically a pre-packaged bundle of services that provide a deliverable.
Along with acquiring name recognition of the product, the purchaser is also often looking for know-how around how to develop the product.
Keep in mind that the value of the product to the purchaser is about domain knowledge and customer acquisition. Anything beyond that could be developed internally at the purchaser without having to buy another company.
Software: Software product might be something customer-facing that customers pay you for or might be an internal software product that is used to allow your organization to be more efficient and therefore more cost-competitive.
If done properly (and packaged properly), the software can be a huge selling point; however, keep in mind that integrations between internal systems are usually going to already be established at an organization that might be purchasing your company and so might not increase the value of your company.
Another SKU: Some organizations already sell software, printer services, or something else to customers, and your team might just provide the best possible new SKU that can be cross-sold to customers.
When that happens, you may become an attractive target acquisition because the acquirer can sell the crap out of what you do. This is great when you have excess capacity and good business processes but don’t have a strong sales team.
When is the community you built considered an asset to the company? Usually, when there’s a greater impact that the purchasing organization can take above and beyond the standard value of your assets.
For example, let’s say another services provider purchases your company and wants to tap into tools that you’ve built to manage tickets or integrate with common services management tools.
Or this can occur when the purchaser can expand their platform support and, in doing so, not only takes on your Apple customers but also sells Apple services to their other traditional customers.
Hopefully, you’ve become an expert with all things Apple at this point. And doing so is trendy. Many a large company wants to know what their “Apple strategy” is these days.
Even if the organization looking to acquire your firm doesn’t say it, this is likely on their mind and should factor into the negotiations when you’re trying to justify a higher value of the organization.
Approaching Acquisition Targets
Many a relationship takes the tone with how that relationship begins.
I guess some things come down to first impressions. Perhaps you already know the principals of an organization you want to acquire. Or maybe you are looking to meet them for the first time. Either way, approaching someone about acquiring their company is a delicate process.
Imagine if someone wanted to buy your company. You probably aren’t going to go out for Happy Hour, have a few too many drinks, and wake up in the morning having signed away your company.
I’ve heard stories that include things like hiring private investigators to follow people, having background checks performed without their consent, and going through the garbage at someone’s home. Having said that, I’ve heard of large companies doing at least two of those as well, just to hire talent (or hiring headhunters to do it).
So let’s not go that far. Let’s say that maybe you do a little bit of due diligence (nothing creepy) and then look for any contacts you have in common. The warm introduction is, by far, always the best. And I wouldn’t look for an introduction on LinkedIn or through e-mail.
I want to push for an in-person introduction—just lunch, like the dating service, says. This gives you the chance to meet someone face to face. You don’t have to say you want to acquire their company. Instead, you can say you just want to meet someone else who you’ve heard so much about!
Once you’ve met in person, if you get to that point where you want to start discussing an acquisition or merger, then I like transparent, direct, and early communications.
“There’s a chance our two companies might better serve customers as one company. How do you think we might make that happen?” Be direct, but not aggressive. After all, you didn’t hire someone to go through this person’s garbage, right?
The Finer Points of Acquisitions
The criteria for any acquisition absolutely begins with the P&L. If there’s profit, then why would someone want to sell? If there’s no profit and no plan to profit, then why would someone want to buy?
But if you have a plan to find more revenue or cut costs by combining operations to become more efficient, then that obviously makes an acquisition more attractive, provided there aren’t too many hurdles (which can crush you if you aren’t careful).
Some questions that might limit liabilities:
Can you get out of contracts for overlapping services?
ISPs, leases for office space, the costs of RMM/MSA/ CRM solutions, licensing for cloud services, E&O insurance, retainers for lawyers, etc.
Can you liquidate unnecessary assets? The most substantial of these is property. If both companies have real estate holdings then it’s likely that both are unnecessary. I’ve never seen real estate come as part of a deal in a roll-up, but it would be an asset that might come with a purchase.
Are there overlapping teams to do the same things?
No one ever wants to think about letting staff go.
Throughout this blog, I’ve been a proponent of repositioning staff where needed. When it comes to core services you can likely use one operations team rather than two, which might give you the ability to repurpose someone into a net-new role that provides more value to your customers.
Overlapping customer-facing talent is a great problem to have! If you end up in this scenario, then either bring on more sales personnel faster or if you’re a smaller shop, then grab your sales bag and hit the pavement, because those are the moments that you want to seize.
We had previously discussed what you want out of an acquisition or rollup. This section hopefully allows you to polish your business plan by finding a more efficient single organization than two separate organizations operating independently.
The faster you can achieve operational efficiency, the more quickly your teams can learn to work together. Don’t be afraid of delegating as much of the operations as you can so you can get in front of customers to maximize your chances to retain them and to understand their needs.
Culture is one of the most underrated aspects of running an organization. Having a great culture is at the heart of what motivates the best people to want to work for you.
Lasting culture is founded on strong values that unite and inspire. An acquisition represents a single event that could destroy your culture if not done properly. So you have some difficult questions you’re going to want to ask first.
Can you work with these people? We didn’t really address this question when we covered selling your company, although through the blog we have touched on culture. But you don’t want a combative situation being set up inside the company you’re acquiring.
If you hired your team, then you know you can work with them and I sincerely hope you enjoy doing so. But you didn’t hire these people. Ask the seller about the people.
Are the clients a good cultural fit? We frequently bring on similarly sized and/or minded customers. That’s one reason why you might be looking to purchase another organization, to expand out of the beachhead you’re in.
But if your staff can’t work with the new customers, then you might have to make different plans. And it’s best to know that before you’ve passed the threshold from which you can’t return (signed on the dotted line). I don’t think there’s a silver bullet here. Talk to the employees and be transparent. You’ll figure it out.
Based on the size of the organizations being merged, the new organization will likely not need people or vendors in certain roles. The most obvious, among smaller Apple consultancies that merge, is likely accounting.
If the new entity needs double the capacity for accounting then you’ll be happy to have the added resources. But if not, you will have some hard choices to make. We discussed some operational aspects you need to decide on before you acquire an organization.
RMM, MSA, and ticketing systems
Customer Relationship Management (CRM)
Patch and server management systems
Managed service components, including backup, cloud services, messaging, and groupware services, etc.
Contract management systems
Messaging, groupware, and internal productivity systems
Outside accounting services
Custodial and facilities services
Financial and real estate services
Human resources and outsourced HRIS systems
401k and profit-sharing services
The most important thing to keep in mind with all of these is to pick the best solution. At first, you might think that the tools you were using are all the best.
However, if you ask to be taken through how they’re used by the old team, then you may find that you like the business processes and the technology that drives them better than your own. And when the new team sees you embracing what is best, they are more likely to trust you concerning what is best for them as well.
Many business owners are going to find this the really crappy part. You find these great companies, you meet the employees, you merge operations, but in the process of building out a final product, you run into a problem with comp packages.
Maybe the employees who come to you as a part of the acquisition have salaries that are too high compared to your existing team. Maybe it’s the opposite problem.
Salaries should fit in a similar range, per position. If you haven’t yet created position contracts and done salary leveling, then I would recommend doing so at this time.
While you don’t want to make drastic changes in the comp, you want to be ahead of this before the merging of entities. If you are inheriting staff that is paid less than yours, then I recommend providing some kind of profit sharing or goals to get teams up to speed.
Note Leveling seems silly at smaller companies, but if you plan on growing, it provides guidance so staff can grow with the company.
If you inherit staff that makes more than what you currently pay, then check the levels. If the staff you obtain as part of the acquisition make above what the levels say they should, then find out why. They might be doing more than what you think. If not, then you have an issue that needs to be addressed.
If addressing that situation causes people to make less money, then assume they will leave as soon as they can. If they don’t, then assume they will not be in a positive place and could damage the morale of other team members.
Salaries aren’t the only numbers employees will need to know about. The stock is easy if both companies have similar stock option programs.
If the one you are acquiring doesn’t have a program, then it’s easy to roll the staff into yours. But if they do and you don’t, then you either need to create one or provide commensurate compensation, such as profit sharing.
And you need to zero out the money from stocks that the employees should have received as part of a vesting event if that’s not handled by the seller.
This can be really challenging math, so seek professional help to figure out what’s appropriate. And when you figure out what’s appropriate, if possible, do a little better than that.
Benefits are one more thing to look at. As with stock, if people will have fewer benefits, then they should receive additional compensation commensurate with replacing those benefits. If not, then assume a situation similar to salaries.
If you see a general theme with all of the numbers in this section, take care of the employees. Remember that in a services business, they are the most valuable asset and likely the largest cost in the company.
You need to be profitable and have a multiplier to make an acquisition and to make that happen, you need to first make sure that all of the numbers for the staff make sense. As with everything in this blog, be deliberate.
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Rather than Acquire
You might come to a place where you choose not to acquire another company, but in the process of trying to work out a deal, you really came to like the principals and/or staff at the other organization.
That’s awesome! In this case, there are still other options. Probably about as many options as there have been mergers or missed chances at mergers in the history of organizations merging or not merging.
The easiest thing to do is pass business back and forth to one another. You can’t completely overlap or you wouldn’t have started discussing acquisitions. If you will be passing business back and forth, I recommend an agreement where you can bilaterally refer business to one another and receive long-term compensation for doing so.
You started the deal for a reason. Just because you realize at some point that you can’t merge the organizations doesn’t mean that you also have to walk away from the relationship you’ve formed with the principals, provided everyone acts ethically.
If you have the margin, start at 10% and work forward or backward from there. Why do I recommend there absolutely be compensation bilaterally?
Because if there’s no compensation and one party provides far more referrals than the other, then one party is likely to feel taken advantage of. Check the performance over time. Keep in touch, and honestly, be glad to have more friends.
Are Assets Transferrable?
Contracts are a funny thing. Some are locked to a given company or person. Some require various dependencies be met. When acquiring a company, it’s critical to do due diligence and make sure that any assets are transferable to the new entity. Hire a lawyer to do so.
Re-evaluate any deals you’ve made once your attorney reviews them. If you have to make a deal before you have a chance to have all contracts legally reviewed, make contracts contingent on assets being transferable.
In fact, that goes for anything—all deals are contingent on any and every unknown in order to provide maximum liability coverage in case the deal falls through. As such, treat the following as assets:
Partnerships, including reseller agreements, existing support contracts, and alliance agreements
Contracts with customers, especially managed services contracts, but also including subcontracting agreements
Contracts with vendors, making sure that prices aren’t going to go up, and that all agreements will be enforceable once the name of the organization has changed and business based on vendors isn’t negatively impacted
Once you have verified that all of the I’s are dotted and t’s are crossed, you can start completing plans to actually merge the companies.
Don’t Make a Bad Deal Just Because You Can’t Let Go
Ever bought something on eBay and spent way more on it than you really meant to, just because you got competitive? Now imagine that you spent thousands of dollars on legal fees and a deal is falling through.
Sometimes that’s a good thing. If, in the midst of due diligence, you find that the deal keeps getting a little less awesome at every turn, make sure to check that the investment is still worth it.
It can be hard to walk away from a deal at the last minute. Sometimes, you’re unable because your pride gets in the way. And sometimes, it’s because you have invested too much. Not to overuse analogies in this section, but something similar can happen when buying a house.
You get an inspection done and you find the house needs a new floor in the bathroom, then a new furnace, then a new roof. At some point, the contingencies pile up too far and the risk becomes too high to proceed.
Similarly, between debts that are uncovered, assets that cannot be migrated, team members that defect, and potential customer attrition, there may come a time when you have to end the deal.
Otherwise, you’re upside-down. But if everything works out and you can make a better experience for your customers and employees by merging the organizations, then it’s time to execute the deal!
Once a deal is in place, it’s time to start executing your plan to merge the companies. Start by finalizing your plans. As soon as possible, communicate the merger with customers, vendors, partners, and other stakeholders. Communication should be as thorough and transparent as possible.
Make sure to include the following:
You’re taking care of the employees
You’re taking care of the customers
Why you’re doing this
Specifics about how the customers will be better off
The plan and timelines for merging services
How communications with the company might change over time (e.g., how customers file tickets, etc.)
If you will be doing any press around the merger or acquisition (and you probably should), make sure anyone who is contacted about the merger is told that there’s an “embargo” on the press. An embargo is an industry-standard term that refers to media not releasing content until a specific date.
In fact, if the press goes early, you might cause concern among customers and employees, so consider doing PR after the merger and having a press release go out after the announcement. Don’t do anything that could cause your team or customers to feel betrayed. Remember, this should be a good thing for everyone involved.
Be careful with acquisitions. You can easily get into a place where there’s a cultural disparity or a deal isn’t right. You need to make sure you have a vision of how to integrate the organization you’re acquiring into your own.
You also need to make sure you have a handle on costs, understand what you can do to control costs, and understand the impact doing so has on the bottom line. But if you can make more ROI per dollar spent on acquiring rather than building, then jump on that.
Just make sure to remember why you’re doing all of this. It’s never quite as simple as you seem to think at first. Usually, inorganic growth will come with some inefficiencies.
Try to retain as much value as possible in the merger, and provided you’ve been careful and done sufficient due diligence, the two organizations should be stronger as a single entity!
A valuation is an estimation of your company’s worth. A mature organization will hire a professional appraiser to determine the valuation. These are often compiled by large accounting firms like Mackenzie, Accenture, or Deloitte—and they’re not exactly cheap. But they’re worth it!
Preparing the company for valuation is a task that can take multiple years, according to how large the firm is and how it’s being sold. So the earlier you start, the better. Some steps to prepare the company for valuation are provided here.
Make a list of all liabilities. Liabilities are what you owe. This includes traditional debt, such as credit cards, but also any contracts where you’ve received money from a customer and not yet delivered services, such as annual retainers. Also look at any outstanding contracts for property, internet access, insurance, legal, etc.
Make a list of all assets. Assets are what you own. This includes traditional fixed assets such as property, as well as depreciating assets (or assets that go down in value over time), such as computers. Assets include contracts as well as a percentage of the value of customer business that is not contractually bound.
The length of the relationship with the customer and a steady rise in the business done with the customer makes that percentage higher.
Subtract the liabilities from the assets. Once you’ve put together a list of what you have minus what you owe, this is a simple calculation. Practice Generally Acceptable Accounting Practices (GAAP) and make sure to have an accountant help you so as not to have any surprises later in the process.
Document the margin for the last 3 years. A healthy margin can make a valuation higher. How much do you bring in, and how much does it cost to run the business? The more you can document the better, such as per-customer, per quarter, etc. Plotting things out on a spreadsheet and having a solid trendline will help with the process.
Project future growth. I like trend lines. Microsoft Excel is excellent at producing trend lines (as is Keynote and Numbers).
Put a price on your intellectual property. Consider a company blog and the related SEO you get from that, your sales pipeline, your contacts (including the customers), various Standard Operating Procedures (SOPs), databases used to automate the business, and anything else you built a company intellectual property.
In the event of a sale, it stays with the company. If you want to keep any of this when you leave (or re-use it to start a new business), negotiate that during the sale.
Focus on MRR. Monthly Recurring Revenue is the most predictable way to establish the value of a company. Preferably when contractually bound. The rise of MRR can be plotted on a trend line to prove that the company is moving in the right direction.
MRR can include the sale of your products but also the resale of subscription services, such as Internet Service Providers (ISPs), Google Apps subscriptions, Office 365 Subscriptions, leases, and other commissions.
Ultimately, what is the company worth? The answer, no matter the valuation, is whatever someone is actually willing to pay for the company.
To the right purchaser, the company may be worth far more than it is on paper, as they may have a plan to cross-sell services, they may have a system they can put your customers into where they can amplify margin, etc.
But in most cases, I’ve seen companies worth far less than what the owner thinks they’re worth, especially in organizations that have primarily relied on hourly consulting efforts, with no long-term contracts.
Mergers and acquisitions can take on a number of different forms. Rather than pay cash for a company, I have seen a number of acquisitions where the purchaser is basically buying staff and customer lists/contracts in exchange for a percentage of the business that is done with the clients.
Consultancies struggling with apathy, growth, or margin make great targets for such an acquisition. Should you be evaluating an offer, or structuring an offer of this sort, keep in mind that the principals in an organization rarely stay around following an acquisition.
So, what makes the multiplier? What someone is willing to pay for a company. That’s all. But things that help are even, ascending numbers for profits. This means moving much of your business to MRR as we covered previously.
Non-Compete Agreements and Covenants
The sale of your company will likely come with an agreement that you will not compete with the purchaser. Your non-compete agreement or covenant (which is similar to a non-compete but even more binding) is an asset that the purchaser paid for.
Non-compete agreements are more binding in some states than others, but in general, whatever the law says can pale in comparison to the legal fees to prove what the law says. If you will be working with a former customer in any capacity, I would try to get a waiver to do so.
I’ve heard many consultants say, “But the client called me first,” or, “They’re not being treated right by the new management.” One of the things that likely made your company successful is the fact that you were good to your customers.
You probably formed personal relationships with many outsides of work, and it will be hard to see them potentially not taken care of in the way that you would have taken care of them.
But you are legally bound not to interfere. And violating that agreement may come with serious repercussions, so be cognizant of your risk, and the risk to your former customers, if you do so.
Are You Going to Stay with the Company?
This is one of the most important questions. The company will likely do better if you’re still there, at least for a time. And any mature purchaser will understand this and likely want you to stay, at a minimum, for the transition period.
After years of owning a company and making all of the decisions, it can be awkward to suddenly be asking others what they would do, or for permission. If you will be staying on for any duration of time, make sure to work out some details with the new owners of your company.
What authority do you still have in regards to hiring and human resources?
What spending authority do you have?
If working in sales as well, what discount authority do you have?
How are you going to be phased out, including a final date of employment?
If you are planning on leaving, make sure to work out an acceptable exit strategy with the new owners. This should include milestones with fixed dates attached to them. I’ve found that being transparent to staff is important, so letting everyone on the team know the schedule is best, when possible.
Wielding Political Capital
Going from owning a business to working in a business can be challenging. When you own the business you can chart the course for the team. When you don’t, you can’t. Instead, you have to wield political capital sometimes. For example, you do a favor for someone. Because then they owe you. That’s how it works, right? No.
You do a favor for someone because it’s the right thing to do. You should expect nothing in return. It’s called being a mensch.
Maybe you get something in return; maybe you don’t. But it always works out in the end. I see a lot of different people who try to manipulate situations in order to get a specific outcome. Don’t.
These days I try hard not to manipulate anyone. But I have. At the end, when people realize that you are manipulating them, they will never trust you again. That is bad. But that is not the only reason to avoid such behavior. Avoid it because it’s just plain wrong. If you can’t win a heart and mind with the truth, don’t bother.
Suddenly then it seems like there might not be such a thing as political capital. But there is. It’s called karma. And there’s no reason you should think about it. Instead, just be a good person. Practice honesty.
Be virtuous. Help others. Avoid judging others. Help those less fortunate than yourself. Then, you won’t need to wield that political capital because your actions will guide you and you will prosper in the ways you are meant to.
This does not mean you shouldn’t have an opinion. Nor that you should try to convince others that your opinion is the correct outlook on a given situation. Nor does this mean that you should be weak.
You can be strong and have an opinion that isn’t shared with everyone in a given organization. And you can gain political capital by not always having to be right (even when you aren’t).
And if you are a decision maker, you can be the gatekeeper to make sure your part of an organization contributes to the mission of the organization. When others make requests of you, do what’s right—not just for your budget or team but for the mission of the entire organization.
And when you have needs from others, trust they will do the same—hopefully without setting the expectation that you will need to repay them. You may build trust with others, but neither party should walk away with an expectation of repayment unless negotiated at the time a favor is given. But then it isn’t a favor, is it?
But humans are human. And so power struggles occur. Stay clear of too many. Heed those old adages our parents taught us, like “take the high road.” Ultimately, we’ve then defined political capital as trust, rather than what you can do for others. Trust is built on merit and cannot be rushed.
Your capacity to help your part of an organization (and long-term, all parts) is then based on the political capital you and your team can build, which takes time, success, and patience. Remember that, and avoid the mistakes we were taught to avoid in kindergarten, and I think you’ll do great!
You have control of the company to someone else. Don’t go second- guessing them all the time to say things like, “That’s not how I would have done it.” This will not do anyone any good.
This doesn’t mean that you need to be inauthentic and just agree with everything the new ownership says. Instead, give the benefit of the doubt, and address concerns privately in order to give the new ownership the best possible chance of succeeding.
I heard a great analogy once: “The old mayor shouldn’t be second- guessing the new mayor all the time.” Wise words from a wise person. There’s a reason that the change occurred; respect boundaries, but try to be as helpful as possible—even if you don’t always agree with new perspectives.
Ultimately, you have options! You might choose not to sell your company after all and instead go an entirely different direction. Or you might choose to hang onto the company and move into being a part-time owner, which we cover in the next blog. No matter what you do, throw a party.
Acquiring a company can infuse your company with new blood. Your employees can be energized by a new flock of customers and your customers can find more value in the additional services you can then offer. Now, let’s talk about growing your own company inorganically via an acquisition.
There are as many ways to go about acquisitions as there are companies that have been purchased. And there are many ways to find a company to purchase. One way is to look for companies that are on the market.
Another is to look at companies that might not be on the market yet. Don’t limit yourself to opening discussions with companies that are for sale.
Make a List
Look for possible organizations that might align with yours. These may be companies you’ve done business with before or companies you’ve competed with locally. Make a list of the ones you could imagine yourself operating.
And think about what they add to yours. Maybe you’re a solo practitioner and you would like to buy out a larger shop with the nickels you’ve squirreled away. Maybe you’re the larger shop who would like to buy out the solo practitioner.
I don’t always tell people to make lists. Some are list-makers, some aren’t. But you really should make a list this time. Once you’ve got your list, move it into a Google sheet or Excel and add some columns. Now, let’s think about what attributes you might get from an acquisition.
What Are You Actually Trying to Buy (or Roll Up)?
When most companies purchase another company, they’re usually looking to acquire something specific. When consulting firms look to acquire other consulting firms, it’s usually about existing customers, talent, technology, brand identity, and/or vendor contracts (and in my experience, it’s in that order). Let’s unpack each.
Customers are only as good as the contracts. Why? Customers can leave with staff who defect during the transition (including principals who came as a part of the acquisition). Rather than buy a company just for their customers, you might choose to just hire more salespeople, the staff of a competitor, and/or aggressively pursues their customers yourself.
The talent on the Apple platform can be harder to find for other platforms. Apple consulting expertise is a growing market, but hiring a team or finding good staff can be a challenge.
You could attempt to hire talent away from an incumbent, take on talent from new customers, train new employees, or go hire people from recruiting and headhunting sites.
But the ability to bring on two, three or more engineers who can hit the ground running (especially if you’re getting customers as part of a deal) is priceless, especially since they can be used to onboard net-new employees while providing a seamless transition to customers who might be acquired with a deal.
Technology is usually easy to recreate in some way unless it’s patented, or you don’t yet fully understand the business logic. However, the time to market can be critical with new ventures.
If a competitor has the ability to immediately deliver something that you’ve only begun to think about, then consider the cost of going to market and the lost business from being latent to market.
This might be customer-facing technology such as products that are cross-sold into customers with services, as well as implemented ticketing systems, client automation, integrations, middleware, etc.
Brand Identity is something I’ve always struggled with. Being first certainly doesn’t mean being best. You will frequently roll identities into one another anyway.
You can also launch a new product or service and, with a media blitz about being new and fresh, often build a competing identity on your own. But if there’s technology or a service that’s already in the market, then it’s easy to merge brands or bring another brand underneath your own.
My challenge here is that I usually see people getting caught up in wanting to own the brand, not in wanting to provide value. One of my favorite consulting acquisitions was Geek Squad, who was acquired for the most part because they had a good brand.
However you might feel about the talent level in Best Buy stores or their brand since neither you nor I make more than Best Buy does, it’s worth giving them props for expanding that brand into all of their stores and making money off space that had previously been considered an exclusive warranty replacement department.
Vendor Contracts can take a long time to get processed. Large computer companies like Cisco, Apple, Microsoft, and others might require certifications (both with regard to your staff and your company or location).
You also need to be in business or established with a vendor to get a good line of credit for purchasing (let’s not forget that for hardware and software you’ll often pay up front and then take payment in 30 to 90 days).
But more importantly than acquiring the contracts is acquiring talented people that know their way around these systems, know how to unlock the various SPIFs, and have contacts at those companies. Sure, you can figure it out, but in the process, you might end up losing far more than the cost of a rollup or acquisition.
When it’s possible you want to get a little bit of each of these when you are navigating a good acquisition or rollup. Each has its own value. Just don’t forget that you want to bring in everything you can.
So rather than just tell people to get on board with how you’re doing things, listen thoughtfully to what new people have to say and accept any process changes that might make sense, or table and you aren’t ready to deal with.