“Being all things to all people” sounds good, but in most cases it reduces the liquidity of a business. Business liquidity encompasses the number of prospective buyers, the business valuation, and the amount of time required to market the then close the deal.

o The most liquid scenario is a co-located web hosting client base, with no data center, offices, or employees, and only one owner/decision maker. This type of business can be under contract to be sold within 48 hours. (Post ‘Letter of Intent’ due diligence, contract preparation, integration plans etc. all take a bit of time.)

o The least liquid scenario is a web hosting company, which offers design services, has offices, a data center, and offers related services such as access, marketing services etc.

Valuation Difference:
Something I have seen many times is the owner/decision maker on the sell side has heard web hosting company valuation formulas and wants to apply that formula to his company. Inevitably the owner is disappointed when the offer comes up short in their mind, and passes on what actually is a fair valuation.

Design Services:

The decision to staff up and start offering web design services to complement the pure play hosting recurring revenue is a huge decision with regards to the effect on business liquidity. Of course design services can be a natural fit with hosting clients by helping to reduce client churn and up selling existing clients. However, the value of the revenue and cash flow generated from one-time design jobs is no where near the value of the recurring hosting revenue and cash flow.

Negatives of design departments when it comes time to sell:

o From the buyer’s perspective, acquiring the entire company and keeping the design efforts going is risky. It’s 50/50 whether the key design people will stick around after closing … regardless what they or the seller states. In addition, if you have to replace key people, the new staff will not have the relationships with the client base.

o From the buyer’s perspective, acquiring the entire company then canceling the design efforts is usually a risky decision as well. There are offices to deal with in addition to staff which needs to be let go … both time consuming and detrimental to the existing client base.

o My estimate is for every 20 buyers of a pure play hosting company, there are only 1-2 buyers for hosting design shop combo’s.

Internet Data Center:

Investing in an IDC may increase the value of the entire company by an enormous amount over time, but definitely reduces the liquidity in the short run. Typically smaller web host co-locate in the beginning, then at a later date acquire their own data center. In turn, the company will then offer space to other smaller host hence creating yet another service offering.

Owning an underutilized data center reduces the number of one type of buyer … the “cash flow buyer”, yet invites a new category of buyer, the “asset and cash flow buyer”. The later buyer is looking to both grow through acquisitions and make the swap from co-location to owning the data center. The less remaining capacity of the data center, the more of a cash flow type deal it will be, hence usually more liquid.

A key element of successful small business management is being ready for equipment breakdowns, such as computer repair problems, fax machine repair emergencies, and other computer tech support issues. For businesses that don’t have an in-house IT staff to handle computer repair and maintenance, knowing who to turn to can help keep a business running smoothly.

One of the cornerstones of successful small business management is having procedures in place to address technical problems or equipment repair needs. When essential office equipment, such as copiers, fax machines, and computers break down, it can take a heavy toll on business productivity and customer service. Malfunctioning computers or computer networks can also result in the loss of important documents and data, missed deadlines, or vulnerability to Internet security threats.

Establishing a relationship, early on, with a dependable copier repair, fax repair, and computer service can be vital to the ability of a small business to operate efficiently and profitably. When vital equipment breaks down, it can adversely affect the quality of client communication, record keeping procedures, and profitability.

One aspect of effective business planning that’s often overlooked or postponed by small business owners involves anticipating problems and developing plans for dealing with them. Having a list of pre-screened technical services, such as computer repair, fax repair, and copier repair service can shorten downtime and help ensure that problems are fixed correctly, the first time around.

Although this may not be a realistic goal for all businesses, the ideal scenario would be to find one dependable technical services company that provides small business IT support in addition to copier, business fax machine, and computer repair. Finding local technology services that are dependable and affordable is a business management practice that can help keep a small business on an even keel when things go wrong.

If your office equipment is new, it probably came with a service contract or warranty. If that’s the case, your need for computer repair services or a copier repair service may already be taken care of. However, service contracts can expire when you’re busy running a business and managing employees, so it’s always good to be prepared with a backup plan.

As with any kind of service professional or business, the best way to identify dependable contractors is through a trusted referral. That’s one of the benefits of participating in local business organizations and networking groups. Not only can you share potential sales leads and management techniques, but you can also compare notes on local companies that provide good fax repair service, Canon copier repair service, and business computer services. In some LinkedIn social networking groups, it’s also appropriate to ask group members if they have any recommendations for a local computer networking company, a business fax machine repair service, or a reputable firm that provides IT technical support.

If you’re just starting out in business or you haven’t had a chance to develop your professional network, you can always ask your business accountant, attorney, or commercial landlord if they know of any dependable office machine repair services or small business IT support companies in the area.