What’s Your Worth? Partners, Here's How to Increase the Value of Your Business – Page 2 of 2

What’s Your Worth? Partners, Here’s How to Increase the Value of Your Business

As channel M&A continues at a frenzied pace, partners of all types will want tips for selling and/or buying.

… partner types – resellers, MSPs, consultants, agents and so on – will want to emphasize one key action to increase their valuations: “Placing a focus on generating recurring revenue,” Tubb said. “Buyers value recurring revenue above almost all other forms of revenue.”

That will come as no surprise to partners, especially those who continue to transition from a hardware-centric to a subscription model. Recurring revenue has represented the indirect channel’s Holy Grail for years, with the cloud and other “as a service” technologies bringing partners closer to attaining that coveted prize on a regular basis. Potential buyers will be drawn to those reliable streams of income.

What if I Want to Buy?

A number of partners also will want to understand when they should consider buying to heighten their expertise and reach. Tubb said the top three signs to look for are as follows:

You want to expand your business by adding services or expertise to your existing offerings.
You want to expand your business beyond the current geography that you dominate.
You want to expand your business into a new vertical or niche.

Throughout the process of vetting whether buying another company presents the right next step, partners, especially MSPs, will want to avoid certain missteps Tubb has witnessed during his time in the channel. Above all, he said, “I’d advise MSPs against making an acquisition to increase the client base instead of focusing on strengthening their existing sales system. Every MSP should have a strong sales machine before they consider making an acquisition.”

He acknowledges that can prove difficult, as many MSPs struggle with sales and see a purchase a quick way to access a new client base.

“The reality is, however, that it’s a lot easier and sustainable to focus on building a strong sales process than it is to buy another company,” he said.

Join Tubb and the other experts leading “Partner Open Mic: Know Your Worth” on Tuesday, Dec. 3, at 10:35 a.m.