Did the amount of office technology needs evaporate in 2020? Or did the nature of the need change?
I’d argue that while the shift was sudden and dramatic, office technology need not only didn’t wane, it accelerated. Work from home, cloud-based print, and a host of other needs that were value-add solutions became massively mainstream and in high demand. Some industries slammed to a halt while others exploded with almost an irrational level of need for new office technology (healthcare, logistics, and delivery, for example). So, yeah, I’d say demand didn’t fade at all. It just shifted.
Did you shift with it? Did you evolve your business development strategy? Did you evolve your product mix and solution set? Did you evolve your business model?
The answer to these questions may have more to do with 2021 and beyond than 2020. It may even affect the value of your company. In a February 2021 focus group of 28 financial buyers (private equity) of office technology dealers, the following were the top five strategic attributes that enhanced the value of a potential dealer acquisition:
- Some revenue and earning stability in 2020
- A strong service-to-hardware revenue ratio
- A diversified customer base with few industry concentrations above 15%
- An innovative and visionary management team with clean financials and debt relationships
- The ability to quickly adapt to the 2020 environment and win business despite the headwinds
One participant said, “I’ve looked at more dealers looking to sell in 2021 than I did in all of 2018-19. But there’s little real value there. They’re tired and quitting but want big EBITDA multiples and that’s not happening. The one deal we are working to win will command a high multiple almost singularly because they evolved their business so dramatically to IT services, cloud services, and building differentiated industry-focused solutions.”
There you have it. If you want to maximize the value of your enterprise, a shift in strategy may be required. For a long time, the copier business of old has faced transformation. In a post-COVID world, time is up. Now is the time to act on big ideas, expand into new product offerings, and win business across new industry segments.
LEAF can help.
Whether you’re just starting your evolution or are actively evolving, the office technology leaders at LEAF can help you with the advisory approach, strategy, capital, and creative customer financing that you need to power success.
The economy is roaring back. Technology needs are great. The shift is on.
Let’s act on this opportunity together.