Business for Sale: VoIP/Telecom Solutions Provider

Business for Sale: VoIP/Telecom Solutions Provider

Located in the Washington DC-Baltimore area,  this telecommunications firm has been serving their commercial client base since 1990. Well established with a focus on customer service, this firm has nearly 900 current clients.

This business sells both VoIP and premise-based solutions and is poised for expansion with identified opportunities for a new owner to grow the business. Employees are extensively trained on equipment and also focus on educating customers to derive maximum benefits from their telephone systems.

Products lines include:

  • Avaya IP Office
  • Avaya Cloud
  • Nortel
  • Toshiba

Telecommunications Financials

 

 

It is important to note that service revenue for the last 3 years averages $615,754 or 51.5% of total revenue

In the past 30 years, and through several recessions, the company has remained financially sound, un-impacted by the fluctuations of the economy.

The owner is willing to stay on for an agreed upon period of time to train the new owner and transition clients.

Connect with Richard Stopa (rstopa@harvestbusiness.com) at 703.307.1187 for more information and details about this business.

Click here for a Non-Disclosure Agreement and Finance Document

Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to RStopa@HarvestBusiness.com.

We will then be able to discuss financial details and other confidential information about the business with you.


 

Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.

Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

State by State “Reopening” Status

State by State “Reopening” Status

Harvest Business Advisors serves businesses in multiple states. Our brokers have been carefully tracking how the state governors have been dealing with the COVID-19 crisis – and watching how they are approaching “re-opening” their state’s businesses. It’s a delicate balance between public health and the health of the economy, between protecting worker’s safety and providing a safety net for business.

Here is a recap of recent statements by each state in our service area:

Maryland

Other than keeping Marylanders safe and saving lives by defeating COVID-19, there is absolutely nothing more important to me than getting people back to work and getting businesses reopened. I want to get people back on their feet and get our economy back on track. We will do that as quickly as we possibly can in a safe, gradual and effective way.” Said Governor Larry Hogan as he unveiled the state’s Maryland Strong Road to Recovery   plan on April 24, 2020. The Road to Recovery identifies key risk factors milestones which are broad in character and contains components within each stage.

Schools will remain closed for this school year.

Virginia

Gov. Ralph Northam issued a stay-at-home order effective until June 10. A separate executive order that restricted certain businesses and crowds of more than 10 people will expire May 14. Governor Northam recently suggested some restrictions may be lifted, a “soft” re-open but has not yet provided specific details.

On April 24, Governor Northam shared the progress made by Virginia and a blueprint for phases for reopening the state if certain health benchmarks are met and maintained.

Schools will be closed for the remainder of the school year.

Elective surgery and dental procedures in Virginia were allowed to resume on May 1.

Washington D.C.

On April 23,  Washington DC Mayor Muriel Bowser has created a “ReOpen DC” Advisory Group which will include experts from the Johns Hopkins Bloomberg School of Public Health.

“ReOpen DC is about working together as a community to reopen Washington, DC in a way that is safe and sustainable. Together, we will create a plan that is based in science and tailored to the needs of our community.” said Mayor Bowser.

ReOpen DC has defined on three phases of reopening:

  • Emergency Response – Where we are now
  • Stabilization – what ReopenDC will focus on, which involves relaxing restrictions but closely monitoring and quickly responding to negative metrics
  • Long-term Recovery – How we find a new, more resilient normal. Likely started once a vaccine is widely available

 

New Jersey

“Extending this declaration ensures that we can continue using every resource at our disposal to mitigate the spread of COVID-19,”said Governor Murphy.“But I want to ensure that this extension is not interpreted to mean that we are reconsidering our path forward or changing course on the principles I laid out last week in the Road Back plan. We will continue to stand by these principles and protect public health as we responsibly take steps to get the economy moving again.”

Schools will remain closed through this school year.

Governor Murphy introduced New Jersey’s “Road Back Plan” that covered economic recovery and public health needs.

Pennsylvania

The commonwealth of Pennsylvania released their Return to Work Plan, determined by county statistics and milestones and specifies Work and Congregate Setting Restrictions and Social Restrictions in phases.

“We are planning for the days and weeks ahead when we will not only safely return Pennsylvanians to work but return to a different and more resilient Pennsylvania. While we cannot be certain of the future path of this disease, our decisions will be driven first by prioritizing the health and safety of all Pennsylvanians.

To that end, the Commonwealth is partnering with Carnegie Mellon University (CMU) to create a data-driven decision support tool that will enable a balance between maximizing the results of our economy while minimizing public health risks”.  said Governor Wolf.

Note: Pennsylvania and New Jersey are part of a coalition of northeastern states coordinating the reopening of the economy safely in that region.

Harvest Business Advisors encourages all our colleagues to continue to protect their health and the health of their employees. We can help you with your business health – and would welcome a conversation about how you can not only survive now, but prepare your business for the eventual rebound. Feel free to connect with us


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia.
Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

CDC Releases Draft Guidance for Reopening Businesses, Restaurants, Bars

CDC Releases Draft Guidance for Reopening Businesses, Restaurants, Bars

The CDC has released draft guidelines for the President to review and approve outlining measures to be taken by businesses as they reopen.  Specific sections address businesses with Vulnerable Employees (page 10), Restaurants and Bars (page 12) , Child Care Centers, Schools and Day Camps, and Communities of Faith.

Click here for CDC Interim Guidance for Opening Businesses.

The guidance is very detailed outlining three phases.

Phase 1 suggests strict social distancing, closing common rooms like break rooms, telework, and other restrictions.

Phase 2 suggests moderate social distancing, shifts for common rooms, maintaining telework, etc.

Phase 3 is closer to the norm although limited social distancing is still suggested.

These guidelines are subject to change as there are many concerns about their work-ability.  Namely, can social distancing be maintained and other suggested requirements?  How are health checks performed while still maintaining required confidentiality? We are sure this will all be clarified over the next few weeks.

According to the Washington Post, the bulk of these guidelines are expected to go into effect sometime over the next seven days or so.

 


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

Benchmarking in 2020 – Key Business Metrics to Monitor

Benchmarking in 2020 – Key Business Metrics to Monitor

As you start the new year, it’s advisable to pay attention to areas of your business to identify problems, resolve issues and measure growth.

Business owners at all stages should follow benchmarking practices – but owners considering selling their business soon or in the future should be especially vigilant.

Likely, you already track some performance metrics in your business, such as profit and EBITDA. While profitability and EBITDA are very important, there are others that many business owners overlook.

Let’s look at some metrics that are equally valuable.

Gross Profit Margin Per Revenue Source and Service

Business owners should review each revenue component whether it be products or services and analyze both the revenue and expenses associated with each. They should also really look at the 80/20 rule in terms of the gross margin per revenue or product.

When is the last time you really studied or analyzed each one of your product or service areas based up on gross margin contribution to the company – including all costs associated with each revenue source? Does a revenue source have disproportionate expenses?

Are these expenses worth the revenue that it brings into your company?

Are there expense components that can be bettered utilized in other parts of your business?

Studying your profit margins across your spectrum of products and services is crucial in bettering your company’s profitability.

Monthly Recurring Revenue Metrics

It is very important to the profitability and value of your business to provide services with monthly recurring revenue. If you do have recurring revenue, you should analyze the cost associated with that revenue (client acquisition, service expansion upgrades, client churn) and understand what percentage of your customers you are keeping, what percentage you are losing and why.

If you do not currently have services that provide monthly recurring revenue, now is the time to put creativity, thought and effort to develop that side of your business

Labor Loaded Gross Margin

If you are running a service business and you have a lot of clients, you need to examine the cost associated with generating gross margin.

Pay attention to which clients demand a disproportionate amount of attention and resources. By looking at profit margins you’ll be able to identify which clients are receiving too much time.

Effective Hourly Rates Spent Servicing Clients

It’s necessary to understand exactly how much it costs to service a client. Once you determine that figure, you’ll know whether you need to charge more. It’s certainly not a good business practice to lose money on a client.

If you can’t make money on the client, then you may need to fire that client or have a frank discussion with the client. So, calculate this metric for each client, analyze the results and increase your monthly fees when necessary.

Customer Contribution/ Client Concentration

While large and loyal customers are an asset to your business, customer concentration of too many large clients (in relation to your total customers) can be a red flag when you are raising capital to expand your business or selling your business. Keep track of customer concentration so that your customer portfolio is in balance and that your customers are evenly distributed across your customer base.

Client Churn Rate

How many clients do you lose each month? And why?

You should be tracking this statistic in your business. Some churn is inevitable but a sudden decrease in customers means you need to take a look at your business. Is it an employee issue? A product or services issue? Are you losing business to a competitor?

The sooner you identify the issue and act to correct course, the quicker your business will recover and rebound.

Employee Churn Rate

Your employees are your biggest asset.

Are you retaining employees? If you are not, why aren’t you?

Is it because of ineffective managers?

Lack of training? What can you do to better train your employees?

What can you do to cut down on this rate?

Are your compensation plans competitive? Are you rewarding and recognizing your employees?

How do your employees stack up against your competition?

Conversion Rate

How many client leads do you actually convert into new clients? Generating leads is great but a good conversion rate is critical to the success of your business. It’s also important to understand lead source and testing new lead generation strategies when necessary.

Return on Investment

Any time you spend money in your business should be done with the intention of calculating the return on both the soft (employees, etc.) and hard (actual cost of goods – equipment, software, web development, social media, online branding, supplies, etc.) to generate that income. Understanding this information – and making adjustments based on it – is critically important..

Conclusion

There are many metrics to choose from in running your business. The most important thing is to choose the ones that will benefit you the most in growing and maximizing profits for your business. And, in the end, using good metrics will pay off for you when its time to exit and sell your business. Buyers do pay more for well-run businesses with strong processes in place.

 

This article was written by Harvest Business Advisor Partner, Richard Stopa.


Clients choose Harvest Business Advisors for our accurate business valuations and our proven ability to deliver the highest price in the smoothest sale transaction possible. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

 

 

Five Common Questions Business Sellers Ask Business Brokers

Five Common Questions Business Sellers Ask Business Brokers

The three partners at Harvest Business Advisors – Greg Caruso, Eddie Davis and Richard Stopa – have helped hundreds of business owners sell their businesses. Each business sale process is unique – but the questions we are asked by the owners remain fairly consistent.

1. When should I sell my business?

Sometimes this question is in response to changes in the economy or the stock market. Or an owner is feeling discouraged about sales or challenges in the business.

The answer is “It Depends”. We do not have any special forecasting skills to help you make a decision. But we can tell you that business sales usually take 9-18 months, so selling is not a quick fix to a downturn.  While your business is on the market, you will need to continue to run your business, upgrade systems, keep an eye on profit opportunities, document processes and keep key employees engaged. It’s essential for the sale of the business.

Other times this question is in response to internal or personal changes. We hope you are not dealing with health issues, but if you are, the time to plan is now. If you are not as satisfied running your business, an exit planning session can help set goals so you know you have options, if and when you decide to sell your business.

 

2. How much money will I get?

This is another question without an easy answer. But realize that pricing is an art form – too high and all the buyers will be chased away, too low and you will not receive full value. It’s important to have a business valuation to establish a baseline value which will help you to determine how to price your business.

Be prepared for bargaining from buyers (that’s their role!). It’s not meant to demean your business, but it is part of the process.

 

3. Who would buy my business? How do I find buyers?

Usually, business owners think about competitor who might want to purchase their business. And we see that happen quite a bit. It’s an easy way for a business to expand their client base, their equipment and personnel. But that is certainly not the only option.

Business brokers try to look at complementary businesses who would grow their business in a new direction. An example would be a landscaping company who purchased an irrigation company. Or a law firm who acquired a consulting firm that could expand the services they provide their clients.

We also use professional associations to find businesses and business owners who are aligned. Sometimes there is an employee who is ready to be their own boss (sometimes that employee works for you!)

Business brokers, especially those who have been in the business for a few years, develop relationships with people looking for the “right” business and investors who are seeking profitable businesses to invest in. We also focus on finding more than one potential buyer, to develop an “auction” atmosphere (and a higher selling price).

4. What do I tell my employees? And when?

Long before you decide to sell your business, you should protect yourself by having your key employees sign Non-Disclosure Agreements (so they do not discuss the details of your business with anyone outside the business) and Non-Compete Agreements (so they cannot work for a competitor for a specified period of time). Both of these agreements can be customized to be fair and equitable to you and your employees.

We generally recommend not telling your employees the business is for sale until the sale is final, with the exception of key employees who may need to be involved in the due diligence process and meet with the prospective buyers. Guaranteed, your employees will know something is going on. The best you can do is present the business sale as a positive for them, an opportunity for growth.

5. What will I do after I sell my business?

There’s a question we cannot answer! After a transition period with the purchasers, most “former” business owners take some time getting used to their new normal. Some spend time improving their golf game or finding new places to fish. Others make up for lost time with their families. We’ve seen people buy an RV and hit the road – or discover a passion for giving back in their communities. The bottom line is, after your business is sold, you will decide what is next, what will make you fulfilled and happy.

 

If selling your business is on your mind, we’d be happy to talk to you about what to expect and the options and timing.  We can have a relaxed conversation by phone or over coffee to answer some of your questions. Feel free to reach out to us!


Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.

Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.