2018 has been a strong year at Results International, and having closed multiple deals involving services business, it is evident that there is a strong appetite for services companies with in-demand skills and scale from both buyers and investors. But how are these companies building and realising value without compromising the quality of their service offering?
In November, we brought together some of Europe’s leading privately-owned services companies to share what they did to build and realise value for their services businesses. The founders of these fast growth companies had vision and focus, and they fully engaged their people, driving productivity, profitability and delivering value to stakeholders.
Our panel included; David Poole, co-founder of Symphony Ventures, an intelligent automation consultancy that sold to SYKES in late October 2018, Ila Garner-Patel a serial entrepreneur who co-founded Brand(x), a consultancy communications agency servicing the pharma sector that sold to IPG, Rob Evans, co-founder of The App Business, the UK’s leading mobile product development consultancy which was sold to St Ives and Tom Wrenn, head of ECI Partner’s TMT sector.
There is no “magic bullet” strategy that works for everyone at every time and our panellists had to learn the hard way but they graciously shared their knowledge with our audience on how to fuel sustainable growth.
Top 10 recommendations from the breakfast include:
- To build a successful services company the business needs to be scalable. While the early success of a services business often rests with the partners, in order for it to be scalable your employees need to be properly trained and your processes and operations standardised to preserve quality, performance, service, or any element that’s key to the business.
- While good pay and additional employee benefits play a role in attracting talent, the most important thing is to have new and interesting product/service offerings.
- Recruiting directly from universities and having a structured graduate scheme can be hugely beneficial as graduates will not only be hungry, they’ll also learn and adopt your ways of doing business.
- Build your culture around industry leading work. People leave when they are bored and interesting work keeps good people. A good culture is what sets the tone for employees and clients, indicating that you are building long-term relationships, and this is very attractive for buyers as well.
- Employee attrition is inevitable, but a buyer/investor will likely be put-off if attrition levels exceed 20%.
- Developing a sales and marketing team is important because just being good at sales doesn’t mean you are good at sales strategy.
- International expansion is a route to growth but you need to make sure you understand your business intimately before doing so; it might not be the right strategy for everybody.
- Revenue growth is very important but there are few excuses for having an unprofitable services business.
- The right time to sell your business is obviously subjective but you need to make sure you are leaving any future acquirer with enough gas in the tank to carry on the momentum.
- Your choice of partner to sell to is very important. You need someone who is aligned with what you’re trying to achieve. Make sure you’re vocal at the outset about what you’re looking for in a partner, don’t just hope it will be so.