Mike Harvath's 2010 Marching Orders
Business-growth consultant and friend of the magazine Mike Harvath came through with a contribution for our readers in this year's RCP "Marching Orders 2010" feature. Mike, who is president and CEO of the Revenue Rocket Consulting Group, wrote:
"Think of two things this year: mergers and acquisitions (M&A) and business focus.
"We saw a healthy volume of M&A activity in the sector of the market in which we specialize: IT services companies in the $5 million to $50 million range. These executives took advantage of the long-held dictum that they can gain a competitive advantage with a countercyclical strategy for M&A.
"We see M&A continuing to be a smart growth strategy in 2010, but we also see new pressures coming to the market in the declining dollar. Domestic buyers could find themselves being priced out of the market by foreign buyers looking to increase their share of the U.S. market. If you're looking at M&A in 2010, you'd be well-advised to acquire smartly and strategically. This means buying companies that strengthen your tightly defined offering in the market. On the other hand, if you're looking to sell, you may find some attractive suitors out there.
"The IT services companies that prospered in 2009 did so because of their strict allegiance to focus and execution. They were uniquely positioned at the intersection of a technical and vertical specialization. This allowed them to attract skittish, tight-fisted buyers who were looking for the assurance of delivery that comes from companies that can speak from a position of authority, with strong expertise and demonstrable proof-of-performance. While the global IT services market looks to begin growing again, the rate appears tepid enough to keep customers playing the risk card closer to their vests. Focus is the name of the game for 2010.
"For those companies that stayed focused and acquired strategically in 2009, good for you. For those that didn't, couldn't or wouldn't, there's still time to catch up to your newly fortified competitive brethren. Don't despair, but also don't hesitate."
Posted by Scott Bekker on January 04, 2010