Technology Businesses for sale in Staffordshire

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Adam Warren (Jan 2017)
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Leasehold Price: £135,000 Annual Turnover: £213,170 Annual Net Profit: £50,000
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Business Description
Transworld are proud to present a High Reputation, Established Information Technology Service Provider with recurring monthly contract revenue who offers the complete range of services.
The business has been established for 15 years and has a proven track record which has been based upon innovation, professionalism and customer service. They have achieved Cyber Essentials Plus accreditation and ISO27001 certification. The Business offers services across Managed Security, Communications and Cloud and Hosting. The majority of services are offered on monthly rolling contracts. In 2014 the business was purchased by the current owner.

Benefit to the purchaser
In summary, the business will generate a revenue of over £213,000 per annum with a net profit of circa £50,000 per annum (assuming that the purchaser takes on the two staff). As part of the handover the current owners will introduce you to all key customers to ensure minimal disruption in the transfer of business.
Acquiring the business and staff will enable a complementary business to achieve instant growth, with excellent margins, at virtually zero risk.
Depending on the nature of the purchaser’s business other benefits may include:
1. An opportunity to increase the scope of their business.
2. An opportunity to cross sell between the new and the old client base.
3. The ability to obtain the services of two tried and tested and highly capable members of staff, along with all the hardware and software that is required to service this client base.
The transfer of assets and employees require minimal space. (Circa 280 sq. ft)

Trading Hours

The business opening hours are based around a standard five-day 40 hour working week

Conclusions

• Offers forward revenue of over £210,000 along with a minimum profitability of circa £50,000
• Delivers a wide range of services and generates significant recurring revenue based upon monthly contracts.
• A high reputation business that has been established for over 15 years
• Customer retention is a key strength.
• The business has welcomed 12 new customers since 2016
• They have clear Service Level Agreements and Software support agreements in place with monthly contract customers
• Monthly contracts have increased from £7k to £12k since 2106
• The business has achieved circa 60% sales growth since 2016

Key Financial Information

Annual Turnover
£213,170 2018/2019 Forecast

The business has been based in the midlands for many years. it is fully relocatable and will form a quality addition to any existing IT service provider. Alternatively, if you are looking to start a new IT services business then this highly attractive IT business provides you with excellent foundations based upon strong recurring revenues and regular Ad hoc income.

The business Operates across many sectors including Software, Manufacturing, Financial services, Franchising, Charity, Catering and Land management.
The products and services sold can be broadly broken down in to three areas – Managed Security, Communications and Cloud & Hosting.

The Trade and Assets are being offered for acquisition by highly reputable IT services providers. This opportunity has come about following the decision of the current group CEO to retire.

The customers serve many sectors. The business has circa 30 customers on rolling monthly contracts who account for approximately 75% of revenues.

These 30 customers are from:
Software Land Management Hospitality
Manufacturing Promotional Goods Retail
Financial Services Claims Management Property Services
Franchising Design Agencies Accountancy
Charity Retail Distribution
Catering Soft Play

Employees

The business has two very capable employees who dependant on your location, situation and objectives could provide an excellent cost-effective baseline for you to build further revenue and profitability.

Premises

The business currently occupies circa 280 sq. ft. of the business owner’s premises. The data-centre is based in Rochdale. The most likely forward scenario is that the business will relocate to premises of new owner

Products and Services

The products and services can be broadly broken down in to three types as detailed below. Aside from these services, they provide general IT support services for desktop and laptop computers and servers.

Contract durations and revenue

The majority of all services are provided on 1-month rolling contracts. The exceptions to this are the two leased lines which are both only a few months in to 3-year contracts, some of the fibre broadband services and the Cloud Voice services which are also on 3-year contracts. Contract retention is very high. Since 2016 monthly contract revenues have increased from £7k to £12k.

Ad-Hoc Revenue
In addition to the monthly recurring revenue, there is a good rate of ad-hoc sales throughout the year totalling over £40,000. These sales include:
• Annual software renewals
• Annual firewall warranty and security subscription renewals
• 3rd Party warranty renewals for servers
• Sale of new computers and other hardware

Marketing Presence
The business has always been very focused on supporting their customers along with providing significant IT Support services to the parent company.
Since 2016 the business has focused more on marketing their capabilities externally in order to increase sales and profitability. All of the marketing aspects have been based upon the brand and capabilities of the business.
They have a modern website featuring video content for products and services. They use a range of quality marketing brochures combined with keeping a visible presence on pertinent social media and events relevant to their core customer base.
The resulting marketing campaign has resulted in:
• Nearly 60% growth in external sales
• Significant increases in Monthly contracts £12k per month now compared to £7k per month in 2016.
• These increased sales have delivered significant profitability improvements.

Significant Aspects of the Business
Cloud Hosting Platform – Over the last 6 years the business has built their own hosting platform. This has enabled provision of bespoke hosting services to its customers. The platform is built with 4 HP Servers, a Synology storage appliance and 3 FortiGate firewalls. This equipment is located in co-location in Zen Internet’s datacentre in Rochdale. By having their own platform, they have been able to deliver their own disaster recovery service using Veaam. It also means that they have the ability to host their own management platforms for other services they choose to deliver. This platform currently has capacity to support growth enabling additional revenue from the current investment.
4G Mobile Broadband including ruggedized router – The business has identified over the last 12 months an opportunity to provide 4G connectivity to customers who are unable to achieve suitable connectivity with ADSL and where Fibre is unavailable. As part of this they have also partnered with a supplier of ruggedized routers opening up opportunities with businesses operating in remote and temporary locations.
Accreditations and Partnerships – The business has achieved Silver Small and Midmarket Cloud Solutions Partner status with Microsoft. Additionally, with Microsoft they have a SPLA agreement for their hosting services. The business holds partner status with Veaam for their disaster recovery services, FortiNet or the firewalls they supply and support. Outside of partner statuses they have strong relationships with key suppliers for the provision of connectivity and telecoms services.

Assets Associated with the business

Further details are available upon request.

Staff Summary

The business includes 2 employees who could form part of the sale – further information is available upon request.

Highly Confidential Must Contact Listing Agent for Instructions
Trading Hours:
40 hours Monday to Friday

Number of Employees: 2

Tenure: Leasehold

Support & Training: 4 weeks

Listed by: Transworld Business Advisors

Find out more about this business opportunity.

 
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36971-96394
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