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A few examples of the types of problems and goals we tackle here and their results:
Problems: Upon entering the first 6 months of what would be a 12+ month program, this company wanted tremendous growth, a handle on systems and processes and to straighten out the sales process to be consistent. All in the hopes of putting the company in a position to grow even more by acquiring other smaller companies in their main niche to turn the company into a ripe acquisition target in 5 to 10 years.
Results: The first 6 months we established a handle on financials as profitability was extremely low with a decent revenue volume. This resulted in a revamp in managed services pricing to make sure of a minimum profit. Then came testing the waters in the niche to see how high we could go over and above the needed profit with the tremendous value proposition established due to extreme knowledge in a specialty niche that has money to spend to keep their operations intensive technology in check. And the result was a huge gain in profitability that would end up ending that year with an almost 70% gain in revenue as well.
As we continued through the beginning of the next 6 months of the program, opportunities for recurring revenue (BDR and MSP) started coming in regularly. With internal and client facing processes being smoothed out profitability is constantly increasing with the sales cycle becoming shorter. Not only that, but in less than 12 months working together, the company was the target of an acquisition speeding up the “getting on the radar” by years with ABP behind them in dealing with that process.
Problems:This client entered into or standard 6 month program looking to take a failed attempt at putting together a managed service program for their health care industry niche and make it work for them and their clients, streamline their costs and profitability as well as establish the means to market key services. A tall order to accomplish in 6 months.
Results:In the first 6 month program we tackled a weak understanding of their financials in terms of cost, pricing and profitability where profits immediately jumped 10% when implemented. Once established, we worked to come up with a comprehensive set of managed services programs for their niche that were correctly priced out with known values of what it took to delivery each program level by way of cost and time. In the next 6 months profitability was streamlined by getting rid of unnecessary costs, improving internal and delivery processes. Then a proven way to generate leads and close deals using a variety of positioning and lead generation campaigns.
Problems: In a rare case, we see huge promise in start ups and agree to take them on. This was one of them. With a few months in business, this company, with the owner being the sole employee had mostly break/fix work and managed to establish one weak managed service deal worth only a few hundred dollars a month in revenue. He had no internal processes in place and some delivery processes. The good and bad news was we were starting pretty much from ground zero. Bad because we had a lot to do. Good because there were no bad habits in place. The goal was to establish processes, getting a handle on financials to be profitable very quickly, establish managed service programs and do this all for some very tough niches including non-profits, schools and government work.
Results: We went right for a 12 month program and dove into pricing and profitability with a big education on financials. Once pricing and profitability was understood and established, we made sure processes were headed in the right directions in terms of simple things like phone and email contact to the company to keep the one man band from being inundated with interruptions but still be able to quickly establish projects and tickets to be worked on. Then we made a managed service program that fit his niches and priced it to make a solid profit in what is considered a tough sell in the education and non-profit arena. This meant knowing who the best paying targets would be and aiming only at them.
The year was turning after 9 months together and the deals started pouring in allowing this sole owner to start the new year by needing to do almost no break/fix work, upping the amount of project work and going from a few hundred dollars a month in MSP to about $6.5k with prospects to double that number before the end of the first quarter. This meant looking at the prospect of at least doubling if not tripling revenue in the new year with a best in class gross margin on all services as well as best in class EBITDA profits. We expect 200% growth in each of the next 2 years.
Update: Upon the ending of our first 12 months and the renewal to work together for another 12 months, this client needed to, and did, hire it's first technician employee.
Problems:This small company was offered an acquisition opportunity out of the blue. They didn’t know if it was a good deal for them or how the buy/sell process worked as well as having no knowledge of negotiating this type of opportunity. Very much like most companies as most only sell once in their lifetime if it ever happens.
Results:We taught them the process and walked them through it as well as handled negotiations. The outcome was a learning and eye opening experience as they were advised that the deal was not a good one for them and proved to themselves with this new found knowledge that in fact, it was not a good proposition nor was their company setup for a lucrative buy out.
Problems: After acquiring a small firm, this small IT service company was not seeing any gains and the owner was having time management issues to get to things he knew he needed to do to work “on the business” and make things happen. They were looking for guidance in making that time and to determine then tackle what would be the fastest way to be profitable while not having to increase staff.
Results: In the first 6 month program, we did in fact identify many missing processes and deficient ones that were eating up everyone’s time. New client management, service delivery and capturing of those services properly with their PSA system were developed clearing out several hours a week for the owner to work on the business with employees working more efficiently showing a gain in available resources. While this was being done, it came to our attention that although their break/fix work was seeing good gross margins and decent overall profits, their project and MSP works was taking an absolute beating.
We wrestled the costs and finances into order to see where the problem was, made pricing adjustments as well as new MSP programs and then introduced them to existing and new clients. Bringing on no more than a handful of new clients starting the second 6 month program, they realized a 30% increase in managed service contract revenue from the previous year as well as over 40% increase in service revenue even with a reduction in break/fix work. Gains also included a huge increase in project work obtained from both current and new clients. All told, an almost 50% increase in total sales and a 40% increase in profitability all without needing to hire any more techs.
Problems: A leap into managed services led this company down a path of high revenue and low profits. Quite the unexpected results they anticipated. They were giving away too much service and working on site too often for the price tag they had given some rather large MSP clients. On top of that, expense were out of control with poor tracking and use of metrics.
Results: By taking a step back and looking at their finances, operations, contracts and SLAs, we were able to clean things up and develop a better deal to present to current and future clients that boosted revenue and profits while keeping everyone very happy. In one year managed services income and gross profit increased by 15% with the same clients. Additionally, expenses dropped by over 25% resulting in nearly double (97%) the Net Income from the previous year. As icing on the cake, this allowed them to eliminate very old start up debt and provided a platform to grow the company without adding additional headcount..
