Know Your Business Value Before an M&A Venture

… “something that is going to be the go forward.”

Eclipse Telecom’s Dave Dyson

“A good example is a big enterprise customer of mine, with 400 offices around the globe, suddenly said we have 6,000 people we’re never sending back to an office again,” he said. “That was a pivot from six months prior. It was nothing they anticipated doing. So it reflects a couple of really positive things for this ecosystem. One, we all know how to do this stuff. We know how to get these guys to where they’re going. And philosophically it should be driving big business value for us as we sell and guide people in this new era.”

Another issue is building business value by building culture, Dyson said. This can be challenging with everyone working remotely.

“That’s a new conversation in this era where we’re all separate, we’re working alone and we’re feeling disconnected,” he said. “I think that’s something we’re all working on and thinking about how to continue to build culture and value in an era where we’re no longer in the same space together.”

Jasmina Muller is Everbridge‘s vice president of channel partnerships. She said the pandemic is “truly a black swan moment.”

A key topic at an Everbridge symposium last week was that organizations need to have a strategy to protect their people during critical events, she said.

Everbridge’s Jasmina Muller

“So from a partner business, to differentiate yourselves, I would say go out there to see what’s happening. How do you go ahead and work with those companies and understand what’s their priority?” Muller said. “Protecting their assets and all that is probably going to be a clear differentiator for a lot of the businesses.”

Learn from Mistakes

The panel also addressed making mistakes when it comes to business value and M&A.

“A lot of the mistakes we make are maybe not knowing our numbers,” Fernandez said. “That’s probably the biggest mistake that I’ve ever made. I remember getting to a deal table and thinking, I really don’t know what I’m worth. And now I’m going to let somebody else tell me how much I’m worth right now. And that can come as a shock.”

It’s important to know your numbers, he said.

“You really need to know whether you’re a monthly recurring revenue (MRR) billing business or you’re a managed services business, or you’re a break-fix type of business,” Fernandez said. “Not knowing who you are really, really impacts your ability to be successful. So that’s one of the big mistakes that I think we make as MSPs, is not understanding our true identity and what it is we are trying to accomplish because it can be convoluted. Buyers buy with different appetites. And if you’re aligned [with] a break-fix and an MRR billing company, there are different valuations for all those different things. And you can land different places depending on how those things kind of iron out.”

Muller said it goes back to being children — parents discipline them to ensure they don’t make the same mistakes twice.

“Take that same approach, except now it’s on [you] to understand what you did and you won’t do it again,” she said. “So making mistakes, honestly, is a part of entrepreneurship. The key is to fail fast, learn from the things that don’t work and adapt. Successful businesses literally and constantly adapt.”