IT and Business Insights for SMB Solution Providers

Growth by Acquisition

If you think staying on top of operations within your own office is challenging, imagine aquiring a few firms and managing them from afar. By Arlin Sorensen

Heartland technology solutions began in 1985 as a sole proprietorship in my Iowa farmhouse, which is located in the middle of a cornfield. And for the first 10 years, I was happy to remain small and local, adding a handful of employees along the way.

But then Microsoft introduced Windows 95, and the world of technology consulting changed forever. More and more businesses needed help implementing and managing their systems, and the opportunities outpaced the capacity of my small staff and me. I also saw that those opportunities extended well beyond my pastoral community.

In my travels to industry conferences, I had met a number of other channel partners from the Midwest, and learned that some of them were interested in selling their businesses. After careful consideration and consultations with financing partners, I decided to embark on a new strategy of mergers and acquisitions—in my home state and beyond.

Today, Heartland Technology Solutions comprises eight offices in five states, and employs more than 80 professionals. It's a far cry from a sole proprietorship, but it has been a true growth experience—financially, professionally, and personally.

LESSONS LEARNED
Over the years, our biggest challenges have resulted from our attempts to make remote offices succeed using only the staff we acquired. Changing old practices requires the presence of someone who knows your systems and processes and can lead by example toward the new way of doing things.

Therefore, my advice to those who are opening or acquiring a remote office is to put at least one of your own trusted employees on-site to manage the business and ensure the full integration of your culture and processes.

Then, once an office is established, make every effort to strengthen the cultural bonds with the main office. We hold monthly calls with all location managers to provide details on financial performance and profitability, for example. In addition, I visit each site at least twice a year, and preferably once each quarter.

In my experience, the most common pitfall of operating multiple offices is a lack of cost control. It is all too easy to lose track of expenses when your operations are geographically dispersed.

The secret to maintaining cost control is location accounting. Our location managers are responsible for driving profitability at their locations, which helps keep them focused.

The "out of sight, out of mind" effect is another struggle. You need to keep people connected and working toward the same goals. This requires a delicate balance between standardized practices and local office character. In our business, we strive to give people the freedom to apply their own skills and creative solutions while still maintaining a unified culture.

Thanks to our expansion strategy, Heartland Technologies is now able to serve larger client companies that share our regional footprint—and to serve as their total solution provider. Our regionalism is a valuable competitive advantage, and it has led to the cross-pollination of sales and marketing strategies that originate in the diverse markets we serve.

And yet, we remain solidly grounded in our farmhouse, which has grown to 12,500 square feet of headquarters space—but still sits happily among 1,000 acres of Iowa corn and soybeans.

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THE POWER OF PEERS
Today, our company operates in five states. But I have never forgotten the loneliness of being a one-man show. That's why we continue to sponsor industry networking events for our fellow channel partners.

These include peer group meetings with 12 partners from geographically dispersed markets throughout the country. The groups meet quarterly to share best practices and discuss topics of current interest regarding the effective management of small technology businesses. They have become their own mini communities of like-minded professionals.

At the end of each meeting, we set three goals that we want to achieve prior to the next quarterly meeting. By maintaining a strong focus on execution, and by leveraging the power of peer pressure, we move forward both individually and collectively.

About the Author

Arlin Sorensen's picture

Arlin Sorensen serves as the CEO and Founder of the Heartland Companies which includes HTG Peer Groups. When he is not traveling to speak and consult, he is home on his farm in Iowa with his wife Nancy. He is a proud “Pop” to four precocious grandchildren who serve as daily reminders of why he is intentionally living to leave a strong legacy of faith and integrity. He loves making a difference in the lives and businesses of small business owners. You can reach him at [email protected] or on Twitter @asorensen.

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