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Description

SOLD! ‘Q3 2018

Tech Business for Sale? Yes! This Southern California Managed Services Provider – Growing $70k+ MRR is now for sale!

Orange, CA (Orange County)

Seller Financing Available

Zip Code: 92866

Asking Price:
$1,000,000

Cash Flow:
$289,580

Gross Revenue:
$1,349,000

EBITDA:
N/A

FF&E:
$10,000

Inventory:
N/A

Lease Rate:
N/A /SF

Established:
1995

 

Tech Business for Sale – Business Description

Southern California IT services provider with 120 clients and a strong bent toward managed services is now for sale!

This Company was purchased by the Owner in 2016 and since then has successfully shifted the business model from a project-based model to a managed services model.

This also comes with an increasing percentage of income now coming from 12 month auto-renewing service contracts. The Company targets small to mid-sized businesses with a focus on medical services (i.e. plastic surgery and med-spa businesses) in Orange County.

This Company has an excellent employee culture and a five-star reputation for customer service.

It is primed and ready for acquisition either by another IT company, or by an ambitious and independent IT professional who is ready to follow in the footsteps of the Seller who turned this company into the growing enterprise that it is today.

 

 

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Detailed Tech Business Information

Real Estate: Leased

Employees: 10

Furniture, Fixtures, & Equipment (FF&E): Included in asking price

Facilities: 1100 sf office is located in Orange, CA, in a complex where the Company has been for 20 years. With the recent rapid growth in this Business, the Company is about ready to move to a larger location. The lease is up at the end of the year.

Competition: This is a very fragmented competitive landscape, and the Seller reports that he has not run into the same competitor twice.

They maintain their competitive edge by consistently delighting their customers. Staying on top of technological needs for small business, such as the emerging importance of cloud computing, has also been an important factor in solidifying their position within the competitive landscape.

Growth & Expansion: Continue to nurture and grow the existing client base and invest in marketing to increase market penetration. The trajectory is already very positive for this business. It’s really a matter of staffing up to ensure that growth is sustainable, then ramping up with marketing and sales. The Company could easily expand into San Diego and Los Angeles Counties.

Financing: Subject to Seller due diligence & deal structure dependent.

Support & Training: As needed. Seller willing to stay on long term remotely in a business development capacity or other role per Buyer preference.

Reason for Selling: Relocation.

 

 

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Business Products and Overview:

  • As a managed services IT provider, the Company’s revenue is derived from a mixture of product sales and follow-up services.
  • Different prices are provided to diverse customers based on the scope of services provided each client.
  • Company’s standard hourly service rate is $150 per hour, billed in 15 minute increments, with a one-hour minimum charge for onsite services.
  • Most clients sign a 12-month Client Care Service Agreement, with monthly payments ranging from $540 to $4,000 per month depending on the number of hours included in the plan.
  • There is a price break on the standard hourly rate with a Client Care Plan.
  • Legacy clients are charged between $110 and $140 per hour.
  • Rates for new clients (typically MSP agreements) range from $135 – $150 an hour.
  • As contracts come up for renewal, the Company reviews pricing for each client and increasing the rates if appropriate.
  • The Seller does not report a notable risk of clients leaving if their rates increase, but recommend being cautious about price hikes in the future.

 

Tech Service Overview

For service or project work that is non-recurring, revenue is remitted upon completion of the project or delivery of the product.

The IT Company prefers to bid a fixed price on projects, but will use a time and materials bidding structure if the project carries more risk. They are typically working on 1-2 projects at a time. There are a few projects in the waiting at the time that this report was written.

With the emergence of Cloud computing and the increasing importance of the Cloud for business operations, the Company has begun hosting clients in the Cloud. One forward-thinking goal is to build its own cloud and to begin aggressively marketing its availability.

The Seller recommends that a Buyer continue this strategy.

 

Tech Product Sales for Tech Business for Sale?

Product sales are an important part of the business and comprise approximately 30% of gross revenues.

The Company sources from several providers, primarily:

  • Ingram,
  • Tech Data,
  • Amazon,
  • and Dell.

 

Security products and services:

As security is a primary concern for business clients, the Company is focused on offering security provisions as a part of any service, whether for a one-time project or for a long-term client care plan.

The Company offers:

  • security assessments,
  • dark web monitoring,
  • managed AV,
  • and managed anti-ransomware

 

 

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Tech Industry and Business Trends?

Global Standardization – The global adoption of e-commerce business practices has widened the scope and scale of the IT industry.

International laws and regulations on policy issues like:

  • taxation,
  • privacy,
  • security,
  • and encryption are slowly being implemented.

 

With Asian markets quickly catching up to the US in terms of computer technology use, including wireless and high-speed broadband technology, the need for service and product standardization is being discussed.

 

Tech Business for Sale – The Cloud?

Cloud Computing – Modern providers of IT services must be well-versed in managing cloud-based technology, allow them to deliver software applications and data management services over the internet from a central source.

Cloud systems may eliminate the need for businesses to buy their own machines for large corporate data centers.

More than 90% of organizations are currently using at least one cloud-based IT service, according to a recent survey from Spiceworks, a professional network for the industry.

 

 

Tech Business for Sale near me

 

 

NDA is required to review 20 page Confidential Information Memorandum crafted by ProNova Partners.

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Pronova Partners

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