What’s Now and Next in Business Consulting Services?
While historically separated, the universe of consulting/tech firms and marketing/creative firms is converging, and the world of potential buyers has opened up significantly. More tech-focused firms are seeing interest from acquisitive marketing and ad agencies, and vice versa, creative shops are being bought by tech firms. These larger firms are all looking to make strategic bets to offer a full scope of integrated services for their clients (strategy, technology, marketing, design), which created a seller’s market like we’ve not previously seen.
Prior to COVID-19, 2020 was set to be a historically strong market to sell a business services company already at scale. Post-COVID, many buyers will sit on the sidelines to see how business models weather the storm. Recurring revenue and remote working models should fare best, as well as anything tied to mission-critical IT budgets.
If you’re a growing company, you still need to think about specialization—going deep in one or two areas instead of going broad in six or eight areas. This will be difficult in a post-COVID environment where you have to balance this longer-term strategy of specialization with the short-term temptation to say “yes” to any and all revenue.
We’ll see the big buyers continue to dip down market below $25m in revenue and look at companies in the $10m-$15m revenue range, but only for companies that are very specialized in one area. Valuations post-COVID are still somewhat of an unknown, but those who weather the current economic storm without a decline in revenue will show well.
What’s Your Why?
I love working with founders and entrepreneurs. The sale of their company is often one of the top two or three biggest events in their lives behind big personal or family milestones. It is meaningful being part of the team that guides them through such a significant life event.
About Hugh Campbell, Managing Director, Business Services & Technology
Hugh Campbell is a Managing Director and co-head of Cascadia’s Business Services practice, focusing on the rapidly evolving service-based economy. His focus areas include consulting, staffing, IT services, and marketing services. He has worked with a broad variety of family-owned and entrepreneur-owned companies across the U.S. and internationally. Read Hugh’s full bio here.