M & A Rainmaker

Cisco phone systems provider Poundbury Systems ( http://www.poundbury.com/ Telephone – 01305 259849  ) is providing futuristic phone and video conferencing systems for Dorset based Small and Medium Businesses under the banner ” Futureline “.

Awareness of the installation of High Speed Fibre Optic networks in Dorset has been raised by eg http://www.dorsetforyou.com/broadband and http://www.teamdorset.org.uk/Business/Broadband-Survey?pgid=153 and Poundbury Systems is building on this awareness by offering local businesses low entry cost phone and video conferencing systems from Cisco Systems
( N.B. BT and Cisco are sponsors of the 2012 Olympics ).

Poundbury Systems are offering a package that will provide Small and Medium Businesses with a phone and web conferencing facility starting at

only £99 per month.

Cisco and Poundbury are thinking ahead to the time when Dorsets roads will be full of people heading to and from Weymouth and Portland and the Sailing Olympics and also thinking back to the recent winter months when snow prevented travel around Dorset.

For many reasons we need to ensure that we can conduct business irrespective of whether we are physically at a place or not. Of course there is always a need to meet people in person but many of the business discussions that we have can be conducted via email, phone, video conferencing and the Internet.

If we prepare for extreme road or weather conditions then this is a basis for a high speed, resilient, reliable communications system.

It is also the basis for a ” Digital Dorset ” which will encourage inward investment and migration.

Poundbury Systems phone and video conferencing systems is flexible and scalable – phones can be added incrementally – one or two at a time and at very low cost.

Call Clare on 01305 259849

to discuss your requirements in more detail.

After I wrote the main ” Selling a Business ” section of the M&A Rainmaker blog I came across the BCMS Corporate website here

http://www.bcmscorporate.com/

BCMS Corporate are a fabulous, family owned professional services  business focussed on the SMB sector and helping them acquire and dispose of businesses. They have a great downloadable book on thier website which I highly recommend.

They have considerable experience in the sector and I found that thier approach and sales process had many similarities with the one that I used and have advocated here.

There is no doubt that maximising the value of a business requires that you approach large numbers of companies, globally, many of whom would not have been in acquisition mode. If the potential acquirer( through skillful analysis and salesmanship ) is then convinced of the synergy and accretive nature of the acquisition they will be inclined to pay more than simple financial valuations indicate.

If, in addition, emotive considerations come into play, such as ” There will only be one chance to buy this company ” or ” I have to buy this company before my competitors do ” the the valuations will climb further.

So, I am entirely supportive of the BCMS Corporate approach ( and I might not have outlined all thier special processes here ) and the fact that it helps to maximise valuations.

What I try to get over to companies is the fact that you have to be thinking about maximising valuations well before you decide to sell. BCMS Corporate ( or any other M&A or Corporate Finance house ) basically do thier very best with the hand that they are dealt. They probably have about 6-9 months to ” clean-up ” the company.

This is not enough for real value creation and for addressing all the factors that can inhibit the value of your company such as lack of succession planning.

The conundrum is how to begin addressing these issues at least 3 years BEFORE you decide to exit. It is likely that if the business is an ” exit route business ” value creation ( and all that goes with it ) will be built into the strategic plan. Lifestyle businesses that decide to exit some time into thier business life are a different matter.

One of the reasons for creating this blog was to make business owners aware IN ADVANCE of the need to prepare a business for exit years before the event. Clearly this is a bit of a challenge because if you are not thinking of an exit you are not likely to be spending any time or money planning for it !!

Actually this is happening ! My colleagues and I are working with some businesses who are planning for an exit some years away. They have said to us ” What do we need to do to maximise the value of our company if we sell in about 3-5 years ” ??? Clever people eh ??

I am not going to describe all the things that can be done if you have that much notice but let us mention a few:

– One big one involves crystal ball gazing !!! There is general agreement that you want to sell before your business reaches the peak of it’s lifecycle so that there is life and growth in the business for your acquirer. To do this you need to understand your market and your business cycle.

– More crystal ball gazing is involved in attempting to predict what acquirers will be looking for 3-5 years hence and who those acquirers might be. This is just hard – it is not necessarily impossible !!

– You should try to be providing what the industry regards as ” sexy ” or ” fashionable ” products and services ( I keep my eye on Gartners predictions for the High Tech market )

– Ideally you need to show scalability and replicatability in your products and services

– Ideally you should have global possibilities for the sale of your products and services

– You should have clearly defined processes within your business eg dealing with support issues, forecasting sales

– You should ideally have Intellectual Property ( I.P. ) , something unique that you have invented

– You should have recurring business ( eg maintenance and support contracts )

– You should have a succession plan for all the main management ( I call this the ” If we all go down in a plane test ” )

There are many others but hopefully this gives a sample.

My colleagues and I spend our time helping companies with these and other ” business valuation drivers “.

When you combine these with the correct disposal approach you will almost certainly have a great result.

In February the 2010 Vancouver Winter Olympics Games will run video over Cisco Networks. In 2012 Poundbury hopes to do the same in Dorset.

Cisco Systems will be providing the video and all-media network that will allow NBC to broadcast the 2010 Vancouver Winter Olympics.

See the official Cisco Systems Press Releases here:

http://newsroom.cisco.com/dlls/2010/prod_010610.html

http://blogs.cisco.com/sp/comments/nbc_leverages_cisco_video_network_at_2010_olympic_winter_games/

Poundbury Systems is already promoting the use of Cisco Systems for communications during the sailing section of the 2012 Olympics based in the U.K.

The company is also developing video conferencing and remote networking
technology, to reduce the need for local businesses to travel during the Games.
‘We see video conferencing as the next big thing for businesses,
especially those outside London. We’d be developing it even if the
Games weren’t happening, but the event gives everyone an extra
push. I think it will be a catalyst for Dorset in many ways.
‘It has already given Dorset a short-term motivational boost. In the
long-term, the benefits of improving the area’s infrastructure will be
enormous.
‘Team Dorset is not about opting for a quick fix; it’s about building
long-term business relationships and improving the environment.
We all stand to benefit from the exciting and demanding challenges
the Games will bring. Dorset is a wonderful place to live and work
and we want it to remain so for many more generations”

Team Dorset is the lead agency in Dorset for promoting the Olympic and Paralympic Games in Weymouth and Portland. Thier website is here:

http://www.teamdorset.org.uk/

Poundbury Systems Limited, Dorchester
Poundbury Systems Limited (PSL) is an award-winning computer
and telephone systems integrator based in Poundbury, Dorchester, which provides
forward-looking technology solutions for SMEs across all sectors.

Since starting out 2001, PSL has enjoyed rapid growth and won numerous
awards including the British Chamber of Commerce’s South West Business
of the Year in 2007.

Director Clare Jenkins is in no doubt about what makes PSL special: ‘Our staff
are exceptional. They are highly skilled, but able to translate a technical issue
into everyday business terms.’

PSL runs an active community relations programme and gives time and
resources to local education establishments, including The Thomas Hardye
School and Weymouth College, as well as donating to Dorset charities.
As the 2012 Games approach, Clare and her team are aware they’ll need
extra staff and are increasing their interaction with schools as part of a futureproofing
recruitment drive.

As a founder investor in 5i Limited ( www.5i.co.uk ) which is now owned by the rapidly growing and  expanding 365iT Group ( http://www.365itechnology.com/ ), where I am a shareholder, I like to keep abreast of developments in the Unified Communications world.

This No Jitter article

http://www.nojitter.com/showArticle.jhtml?articleID=222001106&pgno=1

points out that Google may well be the big dark horse of Unified Communications.

It also talks about Skype ( which I use ), Digium’s Asterisk ( I moderate a Voip and Asterisk Club here http://www.ecademy.com/module.php?mod=club&c=3145 ) , Microsoft ( 5i is also a Microsoft UC specialist ) and IBM ( 365iT is an IBM VAR – although mainly in the virtualisation area ) as being the other parties of interest.

Cisco ( in whom 5i specialises ) is for me the main player to watch in this area and always has been since we first installed a Cisco ( it was actually Celsius then ) voip solution at Voyager in the late 90’s. My investment in 5i was predominantly based on the belief that Cisco would dominate this convergence/UC space.

Skype,Digium,Microsoft and IBM are all growing thier influence in this area but I agree that Google is the one to watch now and look forward to part 2 of this article.