Shoot the Moon with Revenue Rocket

Listen to the Revenue Rocket team discuss what matters during the financial due diligence process and what happens when two companies merge together in this episode of Shoot the Moon. Listen to Shoot the Moon on Apple Podcasts or Spotify. Buy, sell, or grow your tech-enabled services firm with Revenue Rocket. 

As we continue to see uncertainty in the economy with several US states struggling to contain the COVID-19 outbreak, more and more businesses are relying on Federal stimulus to come through with a gift in the form of Paycheck Protection Programs (PPP) and Small Business Administration (SBA) loans.   While convenient and inexpensive (and possibly free) these liabilities are popping up on balance sh...

How do you present yourself and your business to someone without that firm handshake? Not only has Revenue Rocket been doing deals virtually since COVID-19, we’ve been doing it this way since almost inception of the business. Listen to the Revenue Rocket team dive into how deals get done virtually. There is a lot more social acceptance of virtual meetings, especially in 2020. The expectations of t...

When Revenue Rocket engages in a buy or sell-side M&A transaction, one of the most asked about topics is add-backs. An add-back is essentially an add-back to the profit of an expense that won’t occur after an M&A transaction is complete. Whether you’re a buyer or a seller, it’s essential to understand what these expenses are and how they impact the business. In turn, you’ll know what kind of valid...

Many firms struggle with change. Many IT Services Providers are stuck between $5-$10 million revenue because they aren’t specialized, verticalized, and productized. At Revenue Rocket we call this our SVP model . This is not unique to IT services companies but almost any services business. Business owners need to leverage additional markets to break through these virtual sales ceilings.   3 methods...

We’re only halfway through 2020 and it has already been quite a year. Listen to CEO Mike Harvath and VP of Growth Ryan Barnett discuss what we have seen so far in Q1 and Q2, 2020 as it relates to M&A and IT Services. Insights on deal structure, deal completion, and unrest from the global crisis. With all the economic volatility, Mike and Ryan dive into predictions for the second half of the year i...

The second half of 2020 will bring increased consolidation of distressed assets and deal structure creativity.  Earnouts: With companies looking to ascertain valuation considerations based on how their businesses performed pre-pandemic, its highly likely an increase in transactions involving earnouts will be realized in the second half of 2020. Allowing sellers to earn back performance over time c...

Why the Rule of 45 is a critical step in identifying a defendable valuation for acquisition targets: Understanding inflated growth risk Determining the risk through calculation.  We look at two metrics to identify the combined value. First, is the Year over Year growth rate as a percentage and the second is EBITDA %.  To calculate the growth percentage look at the gross revenue of a business over...

So, you're thinking about buying another firm on your own. Is your business ready to take this on alone? At Revenue Rocket we always ask, does 1 +  = 3? Does this prospect firm get your business to a place it couldn't get alone? If so, here are 10 things to accomplish when doing an M&A transaction yourself: When is the right time to buy Cash or stock based transactions  Accretive nature of a trans...

As we’ve all started getting used to the “new normal,” we now have much to look forward to with the nation slowly opening up. As an IT Services Business owner, you should prepare for increased consolidation in the industry and what you can do to prepare your business for both organic and acquisitive growth.   1. Assess the damage:  After such an economic pause it’s highly likely that some of your...

To manage your organization’s transformation out of the urgent and into the important, Revenue Rocket has developed a method for a systematic transformation that brings key stakeholders along on the journey out of the reactive and into the proactive management of business change to becoming a top quartile performer. We call this the Revenue Rocket SVP Model. Specialize. Productive. Verticalize. We...

5 marketing things to tackle DIY style: SEO 101 - use the web to educate yourself on the basics of Search Engine Optimization. Its minimal effort and likely the most powerful tool you’ll build that no one will ever see. Start a Blog - People have been paying you for advice or perspective for years.  It is time to put those thoughts and opinions down into words and let that new SEO bring in those n...

There are many unknowns businesses are facing as we move through 2020 and beyond. In this episode of Shoot the Moon, Mike shares his thoughts and recommendations on how to handle the long term impacts of COVID-19. OUR INSIGHTS Demand for speed and execution: Demand for capacity and speed is still ongoing - are your clients in a good place? Uninterrupted service: while we know it’s not business as...

Consumers are being engaged differently these days... What used to be an in person dialog is now an online article or podcast. Is your business part of that content?  Your customers are learning new things at an unprecedented rate since the stay-in-place orders went into effect and your product or service may be just what people are looking for. So, rather than cut back on marketing, use some of y...

It is important as business owners and executives to inventory and quantify your exposure in times like this. COVID-19 is eating away at the health of our country. Not just our physical health but our economic health.  By evaluating your risk ahead of time you can ensure you take steps early on to protect your business from rising and delinquent accounts receivable (AR) and subsequent cash flow is...

An add-back is an expense that is added back to the profits of a business (most often earnings before interest, taxes, depreciation, and amortization, or EBITDA), to show the profitability and value when you take out expenses that will “go away.” Add backs play a critical role in adjusting the bottom line when analyzing the valuation of a company.  A “legitimate” add back is an expense that is for...

How do you determine the valuation of your IT Services Firm? The simple answer is: multiply the revenue. Business valuation can be used to determine the fair value of a business for a variety of reasons, like positioning it for sale.    Driving the Valuation of your IT Services Firm: Sustainable and growing profitability is what drives valuations for IT Services providers. This is a key factor in...

You’re leaving 50% of growth on the table if you’re not proactively open to buying another company to accelerate growth. If you’re thinking this could be the right move for your business, we recommend looking at firms half your size. This is what we call “the sweet spot.” There are exceptions to this as some firms can take on higher debt or handle a higher profit company, but there are risks. Mike...

The luxury of perspective is paramount to your success in life and happiness as a person. Many don’t realize how limited their perspectives are in many situations. It’s important to include “Yes, and” instead of “Yes, but” in professional and personal conversations. Why? Opening your mind to different perspectives will help you as an IT Services executive or business owner become more successful i...

2019: A Year in Review M&A in IT Services Was Hot We saw a record year in the number of transactions. Not only with Revenue Rocket but in the industry in general Overall across industries there was a flattening in M&A volume except for IT Services where we saw an acceleration in deals Companies valuations increased with most deals having at least a 6X multiple Private Equity buyers are looking to...

We’ve noticed greater interest from private equity companies investing in or acquiring IT service providers with a strategic approach – not just a financial one. Leading with a strategic buy, followed by add-on acquisitions, Private Equity companies are building larger portfolios and expanding interests within specific target markets. For sellers, there are good reasons to entertain an investment...

You are building your company to ultimately sell the for a significant amount of money. We get it; it’s your biggest asset as an IT Services business owner. The most profitable firms we see are running their business at higher than 15% net income - where does your business fall?  What separates profitable companies vs not profitable companies: Market Focus - are you focused on a narrow set of cust...

It is a competitive landscape out there in the world of IT Services. Listen to Mike’s experiences and insights into the market(s) you are in or should be in. Mike's Thoughts: The goal: Be number 1 or number 2 in the market you’re in. Be the expert! Align your go-to-market strategy, your marketing, and your sales. Focus on driving efficiency in your business by effectively marketing in a few market...

In this episode of Shoot the Moon, we cover the hot topic of CEOs who are approaching retirement or are thinking about retiring. There is a handful of things to think about when selling your business: Intersection of technology: specialization Your Market focus: verticalization How well you build out the offering you have from a services perspective to look like a product: productization At Revenu...

This Shoot the Moon episode dives into the balance of growth and profit with the rule of 45. Our host, Mike Harvath, dives into this rule and how it impacts your business based on revenue. Find more info about our success stories using this rule on our website . Optimize your business for profit, and grow sustainably with a little insight from this episode. Listen to Shoot the Moon on  Apple...