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Ownership Crown Weighing Heavy? 10 Steps to Lighten the Load

Vic LevinsonBy Vic Levinson

“If you are not selling your business, you are buying it.” Over the past 23 years, I have seen more than my fair share of companies that have been bought, sold, merged or gone out of business. As our market changes, so too should your strategy, and there are certain criteria that any small agency, VAR or interconnect must keep in mind.

By the way, if you identified yourself in the previous sentence as an “interconnect,” read this advice extra carefully. Chances are you have explored a sale or have begun to think about your exit strategy.

When I started my business in 1993, it was all about selling equipment and labor. As the market evolved, selling carrier services became a profitable income stream. As technology has continued to change, seemingly at an ever-increasing rate, we have seen multiple streams of income appear — and sometimes disappear. Maintenance agreements, partnership plans or some other such retainer-based agreement have become necessary as part of a system sale, whereas before they were just a profitable revenue add-on. It is dynamic situation that is tied in with the complexity of the systems that we are installing. Today’s gear and software require constant attention to patches and upgrades.

In becoming a part of organization of like-minded firms, I have learned valuable lessons from my colleagues. Here are some of them:

  1. Use efficient standardized tools and processes in your business, from your accounting system to your IT business management platform. Know how to use them effectively so that you always have the information you need. Schedule time to review your numbers and make sure you understand what they mean. The adage “If you are not working on the business, you are working in the business” is true.
  2. We deal in relationships and information. Make sure that everyone in your organization is bound by an enforceable non-compete agreement. Check with a competent attorney who knows your state’s laws regarding non-competes. The only times I have been burned in this business have involved ex-employees who left under bad terms.
  3. Invest in your most vital asset: your employees. Despite a few bad apples, we have low turnover. Why? Because I take care of my team. We have an esprit de corps. I compensate them well. I know them personally — their spouses, their children, their grandchildren. We are constantly reviewing information (#1) to make sure that we are right-sized.
  4. Although we are fortunate to have a lot of great clients — some are truly “marquee” clients — we do not allow any of them to grow too large as a percentage of our total revenue or profitability. If something changes and one of them leaves, we are still okay.
  5. Although we work with a great master agent, we are always looking for multiple streams of residual income. That includes contractual relationships with vendors and clients. In fact, we have worked to develop our approach to sales to encourage residual income over one-time deals. We are loyal to our master agency, but we have also expanded our offerings to cover products and services that our master agency may not represent.
  6. Verify, verify, verify. We work with vendors and clients that we visit and get to know. We understand both sides, so we make sure that when we make a recommendation, we have the right solution with the right provider.
  7. I hate to say it, but sometimes the best deal you do is the one that you don’t do. That includes getting rid of unprofitable entities in our customer database. Just because someone bought a system from us 20 years ago, does not make them a client. A client is someone with whom we have a contractual arrangement and who pays their bills on time. Our clients don’t turn over as quickly when they are under a contract, and we can provide the best experience for them knowing that they are going to be with us for a long time.
  8. Schedule time for working, coaching, teaching and planning both solo and with your staff. This allows you to work on the business. Otherwise, you are working as just another employee and not as a leader. The more you work on vision and empowering your staff, the better you become as a leader. The difference is that your business should run whether you are there or not.
  9. Understand your numbers. Really, really understand them. What is profitable, what are your costs, who is producing and who is not?
  10. When you have done steps one through nine, think. Think real hard. Why are you special? What makes your company and your staff unique? What makes you different from your competition? Now, find a way to communicate that in everything that you do – in every blog, social media post, tag line, proposal — every type of customer-facing communication.

Here is the clincher: If you follow all of these steps, the result will be that you have built value into your business. If you have value in your business, you have something that other entities will want to buy. Then it is up to you: Do you sell your business or do you continue to own it? The choice is yours, and that option allows you to lighten the load of the crown you wear.

Founder and president of Prime Telecommunications, Vic Levinson has more than 20 years of industry experience as an interconnect and authorized reseller for Avaya and Allworx, hosted IP telephony solutions connectivity and cloud applications. He has been instrumental in setting up the channel marketing program for SNET Communications, a Chicago-based hosted IP telephony provider. He is also a member of the 2014-15 Channel Partners Advisory Board.


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