Key Takeaways from the Diversified Portfolio Panel at BPCA Spring 2023
Twice a year, the Business Products Council Association (BPCA) members come together to share industry insights, sales techniques and other business best practices. The goal is to encourage members to continually improve their businesses and increase revenue. I was invited by Dominic Pontrelli, President of the BPCA, to present some of BPO Media’s latest research on dealer trends, but as usual, I suspect I learned more than the attendees from the conversations I had at the meeting and from the other presenters. One of the key themes of this meeting was diversification, and the content seemed to always come back to this one topic.
Laura Blackmer (Konica Minolta) and Josh Lane (ACDI) know a thing or two about diversification. Both represent businesses in the midst of their own diversification initiatives — KM with managed IT, and ACDI with EV chargers. Patrick Sheehan (Intermedia) and Nate Maederer (ConnectWise) aren’t strangers to the topic, either — both represent businesses trying to help dealers diversify with cloud communications and managed IT/cybersecurity products, respectively.
For 90 minutes, the group discussed topics covering how dealers can best select new product areas to expand into, typical problems that dealers encounter during diversification initiatives, and shared customer success stories. Here are some of the key takeaways from the panel:
- Don’t diversify if your core business is not solid: You have to make sure your core business can support losses and unexpected costs that come with launching a new business.
- Get your checkbook ready: Adding new technology to your portfolio is a resource-intensive undertaking. You should expect to overhaul your branding and website, hire new people, and train/upskill your existing staff.
- Don’t expect a fast ROI: You might want to take up yoga or transcendental meditation when you decide to launch a new division because you’re going to need to be patient. You’re not going to introduce a new product and grow revenue by 20% overnight.
- Identify the right investment area: Identifying the right investment area sounds simpler on paper than it is in practice. Adjacent technologies like cloud communications or managed IT are always a great place to start looking. But you don’t have to limit yourself. Emerging technologies like EV chargers have enormous growth potential as the country builds out its EV charging network. Sticky products and services that enable recurring revenue opportunities are also a good place to look.
- The right partner is important: No matter what you do, find and work with a good partner. You don’t know what you don’t know, but a partner does. They can help you start and grow your business so you can avoid paying the “dumb tax.”
- Diversification success stories: The panel noted that successful partners embarked on their journey with support from partners and experts. They didn’t cut corners (they made the necessary investments for the business to succeed on its own merit). Successful projects were owned and driven at the executive level, and compensation plans were aligned with the goals they were trying to achieve.
The next great transformation of the dealer channel
The history of the copier industry is a history of perseverance and adaptation. Many copier dealers started out selling typewriters. But just as computers were making typewriters irrelevant, a new technology that was revolutionizing the office was emerging: the copier. The owners of these typewriter companies saw the writing on the wall and pivoted their successful business from typewriters to copiers. Fast forward to today, and many dealers that didn’t pivot did not survive, and many that did are thriving businesses today.
Print isn’t going to die tomorrow. It’s still going to provide your business with a strong platform to grow from. But in the long term, copier dealers are going to have to pivot their business if they want to keep their doors open for the decades to come. That’s why it’s so important that you diversify now. As long as you have a strong platform to grow from, you’ll have an opportunity to future-proof your business.
Patricia Ames is president and senior analyst for BPO Media, which publishes The Imaging Channel and Workflow magazines. As a market analyst and industry consultant, Ames has worked for prominent consulting firms including KPMG and has more than 15 years experience in the imaging industry covering technology and business sectors. Ames has lived and worked in the United States, Southeast Asia and Europe and enjoys being a part of a global industry and community.