368: Playing the Long Game and Using M&A for Exponential Growth with Orrin Klopper

Show Notes

Orrin learned early that if he was really focused and disciplined that over time he would succeed.  He went to university and found that it didn’t help him learn to think.  He got several majors and one was in information systems.  In 1995, he was invited to sell computers and after a year he was hooked.  He has been offering IT services ever since.  In 1998/99 he realized the growing need for small and mid-sized business to outsource their IT needs and that is when his business was born.

What are some of the key principles you’ve used to succeed and to stay successful for all this time?

He began with a long-term view in mind.

He learned a concept called the balance scorecard that was a performance measurement system that can scale.

He also learned that he needed to let go more to grow.

They made a lot of mistakes, but just kept going.

What are some of the best mistakes you’ve made?

Orrin didn’t know terms like IRR and others when it came to the business and when he took on debt he found it was costing him more than he thought – especially when he went to pay it off.

In 2016, the bought a business and made just about every mistake but going out of business.  There is one team member left today from the original business.

Why did you lose the employees in the business you bought?  What did you do wrong?

First, one of the principles from the original business that was going to stay on, left just before they closed on the business.

There was two-week lag before they could get someone into the key leader’s role, but the damage was done in that the employees saw the key leader leave.

They were too aggressive in implementing some of their processes.

They should have let go of people that were dead set on not working to become part of the new culture and were poisoning it.

What have your figured on how to build a good culture?

Read Peter Blocks book “Community.”

There is something about culture that is different than raw strategy and measuring the success of a business.

Culture is all about community building and a community building exercise.

Giving people the ability to innovate and be curious and grow is critical.

The most important thing is not to break and ruin the soul of a person on their journey.

Understand what people treasure and figure out how to work that into treasure.

Having cultural values, purpose, and a vision that tie everyone together is important too.

Giving people the freedom and autonomy to figure it out and make a better solution must be fostered.

Talk to us about how you’ve used acquisitions to scale and grow.  What should we know?

It is a strategy on its own.

At the 26 min mark, Orrin does a good job explaining and it is best to listen.

Orrin has a VP of corporate development that focuses on finding acquisition targets.

What should a seller do to maximize the sale of their business?

First is being ready to take care of the people in your business.

You must also make sure that you customers will be taken care of.

Is there additional products and services that are complimentary with the buyers?

Are the economics solid and fair for the deal?  Work for the win-win.

How should a seller find the right acquirer?

Look for peer groups of entrepreneurs.

Ask in that community who has sold their business and learn from them.

You could also find opportunities in those group.

Make a list of potential partners you could work with and start building a relationship with them.

What is something that you wish you knew sooner as an entrepreneur that would have made a difference for you in your journey?

How to leverage M&A effectively for growth.