Page 21 - October November 2014

October/November 2014
Telecom Reseller 21

EARLES
ESI Offers Guide
addition – and not replacement – to the reseller’s
By working with an established vendor, resellers
portfolio, resellers can smoothly bridge their continued from page 17
have the reassurance that, even ater training,
on How Telecom revenue gap.
they are not alone. Resellers deserve to feel
To transition smoothly, resellers should
Pitchbook reports that for the irst 6 months of conident that the vendor has their clients’ best
Reseller Business begin cloud services as soon as possible so a 2014 the average multiple of Enterprise Value to interests at heart and will be there for support
base of recurring revenue begins to grow. he EBITDA multiple was 11.5 times. Multiples like when needed.
Models Must Evolve
reseller should also conduct a detailed inancial this haven’t been seen since 2006. With so much
evaluation, and set target revenue goals each capital sitting idle – speciically there are 67 non- Bridging the Revenue Gap
month. hese target goals will provide insight inancial, publicly listed companies that are sitting for the Cloud Era
he transition to a new business model takes
into what impacts the bottom line, as well as on $2.4 trillion – they are under intense pressure time, but with the right planning, resellers can
motivation for moving forward.
to either return this money to investors or ind Emake the switch. By viewing cloud PBX as an
strategic growth through M&A.
stech Systems, Inc. (ESI), an innovative
For the telecom and IT industries, investors
designer and manufacturer of high-
If she dials 911,
are on the lookout for businesses that have been managed well, are proitable and have vision. Key performance business telephone systems
and cloud services, today ofered guidance on
will the critical help she attributes to attributes that investors analyze to how telecommunications resellers can efectively
determine the attractiveness of a company include update their business models and seamlessly add
needs be able to ind her?
a strong customer & supplier base, capacity the cloud to their portfolios.
utilization and adaptability, quality control, “he cloud is here to stay, and new skills and
historical and forecasted inancial performance, a new way of thinking are needed,” said George
and a strong management team to stay in place or Platt, ESI’s chief executive oicer. “To keep up,
help with a transition.
resellers must adjust their business models in a
While the acquirer will have their own automated way that beneits both the reseller and customer.”
checklist with growth as their sole purpose, the Cloud Requires a Diferent Business Model
telecom or IT seller of a privately-held and closely- Traditionally, a reseller’s business model relied on
held company will carry a diferent set of feelings upfront payment from the sale of a CPE phone
and goals. Every founder, owner or devoted CEO system, oten causing unpredictable sales cycles
needs to be prepared for the low of emotions that and inconsistent revenue. With cloud solutions,
will accompany the valuation and sales process. sales cycles are shorter, and the recurring payment
Looking at a company founded and grown on model provides something that resellers have
blood, sweat, and tears in a dispassionate manner lacked: a steady stream of predictable income.
can be a challenge. Putting a value on a business “A subscription-based pricing model means
that includes sentiment and pride built over the no more scrambling to make payroll if a down
span of a career can be diicult.
Ater a telecom or technology company has been, economy causes businesses to tighten their belts and cut capital expenses,” said Platt. “With this
there follows a period where the existing structures new model, the business phone system provides
of the company are aligned with the buyer’s afordable options for businesses as well as
business goals and management. While potential predictable, recurring income for resellers.”
buyers will have their own vision for blending
Cloud Requires Training and Trust
the two workforce cultures – the seller needs to Before transitioning their business model
be prepared with their own ideas as well as how into the cloud, resellers must make sure they
to deal with job redundancies, retiring workers, understand the technology. he beneits are
and even new hires. And, just as important, what attractive, but fear and misconceptions have
are you willing to do to close the deal? In many historically held resellers back from expanding
situations, owners are required to stay on and their portfolio. Resellers sometimes fear that
oversee this transition for a period of 1-2 years, the technology can be diicult to understand, Don’t compromise Our E911 solutions
ensuring that the company’s tribal knowledge is is unreliable or it will require new knowledge
passed to the new management team.
and skills to sell and install. Management of the your employees’ help 911 callers get
here are currently 75 million baby boomers revenue stream is also unfamiliar due to the the assistance they
over the age of 65 and retirement is a signiicant subscription pricing model.
safety.
need − fast.
factor driving the sales of these companies. he “To demystify the cloud, third-party vendor
mass of pent up capital and a generation of retiring courses are a great place to start. Once they
business owners will see an increase of companies ofered for sale leading to a drop in multiples thus understand the basics, resellers need to ind a partner dedicated to reseller support that they The E911 Experts
company values will evaporate. For telecom and can rely on for ongoing education,” said Platt.
911Enable.com
IT companies seeking acquisition, the time is Resellers should look for a reputable partner 1-877-862-2835
now.
with a long-standing presence in the industry.

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