Enterprise Fuel, Part 2: Integrating New Acquisitions Easily

By Joshua Oakes, IT Glue

One of the easiest ways for a growth-minded MSP to meet its revenue targets – especially in an economic downturn – is through acquisitions. While it’s a rare and glorious day to find a motivated seller who doesn’t charge a premium over fair market value for the sale, the reality is that buyers almost always pay a premium. To then extract an ROI over their hurdle rate on top of that premium means that an acquiring MSP needs to be able to use the assets acquired to generate significant additional EBITDA. The two obvious ways to do this are to increase revenue from the acquired assets, and to make them more efficient at converting their existing revenue into EBITDA.

To make the latter happen, the acquiring MSP needs to be able to make the target MSP more efficient. There are some gains to be made through redundancies, but the best way to make your target more efficient is to understand their processes, and to optimize those processes as much as possible. The means by which you do that is your Enterprise Fuel.

The most obvious target for efficiency gains are with repeatable processes. Any talented MSP leader can likely find a way to improve most processes, but the biggest gains are going to be found with the processes that are repeated most often. These are service desk processes and commonly repeated projects (such as new client onboarding and new hire training).