Built to Sell: Doing Business Acquisitions with Millennials
As more and more millennials earn leadership roles within their companies, it has never been more important to know and understand how they work and operate so you can understand their unique lifestyle. In fact, it is paramount for an organization to attract, develop, and retain millennial leaders in order to remain successful in the future.
With this highly studied generation assuming more responsibility within the home security industry, industry changes are inevitable. With an increase in millennial entrepreneurship, the home security industry could look vastly different in 10 or 20 years. Particularly interesting is how this generation could change merger and acquisition activity within the industry.
In this infographic guide, “Built to Sell”, Alarm Capital Alliance has outlined a 20-year journey for Timothy PadLocke, a millennial entrepreneur, who creates his own startup alarm company, to help bring clarity to this subject.
Let’s assume that Tim has been working in the alarm business since he graduated from college. Like many millennials, he has early success and an early retirement on his mind. So, after 5 years working for someone else, Tim starts his own company. His trajectory looks like this:
In Year 1, Tim opens his doors and, with minimal start up funding, begins to build an innovative home security and automation business. He is able to gain enough customers in his local market area (Austin, TX) to stabilize his revenue at about $9k RMR.
By Year 5, Tim maintains a regional presence and develops a plan to expand further in his home state. He quickly realizes the need to access capital in order to realize the growth plan. He does his homework and learns about ACA’s Dealer Program. Through a partial acquisition and enrollment in the Dealer Program, he is able to fund his expansion program.
The next 10 years bring continued growth along with some major challenges. He is continually dealing with an increasingly competitive landscape and rising operational costs; but is confident in his affiliation with ACA and his ability to sell accounts as it suits him.
Like most millennials, Tim feels comfortable with both multitasking and diversifying; so when he is contacted about an opportunity with a startup tech-company, he goes for it; deciding to split his time between his two entities.
Now in his 40’s, Tim ultimately realizes that running two companies is taking precious time from his family, and he decides his tech company needs him more than his alarm company. Having established his relationship with ACA long ago, he feels comfortable and confident that a simple, transparent process of selling his entity to ACA makes great business sense.
More than 50% of millennials are interested in entrepreneurship. Knowing and understanding how they work and operate will pay off!