ConnectWise Launches 2 New Programs to Aid Partner Growth
The managed-services market is booming, and partners are looking to capitalize on it. But how, exactly, is one supposed to grow to take advantage of the exploding SMB opportunity or the rash of M&A activity going on in the channel? Expansion and M&A is much easier when you’ve gone through it once or twice, but younger shops and first-time MSPs can flounder when it comes to executing tactics on business strategies such as these.
ConnectWise, the popular business management software provider, on Thursday said it’s sponsoring two different initiatives to help partners who want to grow, but aren’t quite sure how to go about it or don’t have the resources to execute upon their business plan. The Pitch IT business-expansion contest and the IT Nation Connect M&A Deal Crawl stem from ConnectWise’s commitment to focus holistically on helping its partners on their road to success.
For partners looking for ways to expand their businesses, ConnectWise’s Pitch IT contest will help fund worthwhile growth strategies. Competing MSPs will submit a business plan that must answer the question, “If I had $100,000 to invent or reinvent a team in my business and expand a service or launch a new service, how would I use it?” The first-place winner will receive the $100,000 and business-consultant services to carry out the plan. Second- and third-place winners will be awarded up to $50,000 and $25,000, respectively.
Pete Sorensen, vice president of IT Nation at ConnectWise, says that the same entrepreneurial spirit that drives business owners to stand up a managed-services practice often hinders them in their expansion efforts. These partners can get so mired down in solving day-to-day problems that they lose sight of the overall business strategy and fail to put together a plan and align the team around exactly what the markers for success are. What does it look like to develop a new product offering? What does it look like to market that product? Who is our target client? What would make someone want to buy this?
“Unless you’ve done it, it’s sadly one of those things that’s just hard to do,” says Sorensen. “If we can help teach those skills or encourage that kind of thinking in the partner base … the partners hopefully will benefit from it.”
Submissions for contest must use the Pitch IT business-plan template and be submitted no later than Oct. 15. Three finalists will then be invited to present their ideas at IT Nation Connect in November to a panel of industry experts who will choose a winner and runners-up. The submission template as well as all contest rules and additional information are available at Pitch IT page on the ConnectWise website.
M&A Deal Crawl
ConnectWise is also sponsoring an initiative to match up partners looking to expand by acquiring another MSP and those looking to sell. The M&A Deal Crawl and a series of IT Nation Connect sessions focused on M&A challenges will directly address the wave of consolidation the channel is currently riding.
Sorensen says that consolidation trend is being driven by numerous factors, including a generational shift, as a large segment of the MSP market looks toward retirement, as well as private equity beginning to recognize the high valuations of managed-service practices.
“The folks that have grown their businesses well and managed their balance sheets well and are in a healthy position, they’re looking to grow,” he says. “M&A is a way they can break through some of those growth areas.”
There’s also interest from inside the industry as partners look to buy each other. The M&A Deal Crawl is specifically designed to facilitate those transactions among ConnectWise’s partner community.
While many partners think acquiring another MSP is a good way to fill talent gaps or supplement service offerings, Sorensen says he sees some common missteps in how they approach an acquisition. Primarily, they don’t take the time to “put their operational house in order” and prepare their business, staff and clients to take on the tremendous amount of complexity that comes with such a deal.
“They need to take the time to plan how they’re going to communicate with the client base they’ve acquired and how they’ll transition them onto our set of products and services,” he says. “I’ve seen a number of these where partners take too long to help clients make the transition, or they don’t communicate at all, which is really scary from the client standpoint.”
Any ConnectWise partner may apply for the Deal Crawl, though space is limited. Sorensen says that to date, he’s seen more applications come through from buyers than sellers. To participate, interested parties must complete an application form and sign a nondisclosure agreement. Buyers and sellers will be evaluated by ConnectWise and matched based on timeline, size, profitability and other factors. Those MSPs that qualify will be invited to attend the private M&A Deal Crawl at IT Nation Connect, Nov. 8, in Orlando. ConnectWise also is offering eight M&A-focused sessions at the conference to educate partners on how to approach an M&A strategy.
“As we sit back and look at the state of the industry and have a look at partners’ businesses, we try to be out in front in areas we know they need in order to continue to grow and mature in their leadership,” says Sorensen. “It’s all tied back to the focus we have on partners’ success and knowing this is one of the areas that partners need to continue to mature.”