Planning Ahead: Upgrade your IT Infrastructure before You Sell 

Guest Blog by: New Direction Partners


A mergers & aquistions consultant offers a perspective on when to upgrade technology in label or packaging, or commercial print businesses. What do investors look for when they scope out a company to aquire? What makes one business more attractive than another? Technology infrastructure is a key element for determining a buying decision.

As you approach that milestone moment in your life, whether it’s retirement beckoning or the desire for new ventures, the prospect of selling your packaging company may loom large. If you don’t have a clear succession plan in place, finding the right buyer becomes paramount – someone who can uphold the legacy you’ve built, nurture customer relationships, and support your dedicated team.

Yet, the decision to sell is not just a financial transaction; it’s an emotional journey. You’ve poured years of dedication into shaping your business, cultivating customer loyalty, fostering a stellar team, and fueling growth through strategic investments. Now, as you prepare to transition, maximizing the value of your company becomes a top priority.

Leveraging technological infrastructure 

In the realm of printing and packaging, technological infrastructure is a cornerstone of success. While hardware like presses and finishing equipment are crucial, the spotlight is increasingly on technology solutions. Companies equipped with cutting-edge packaging technologies not only enhance their operations but also attract buyers. 

Investing in and effectively utilizing software solutions such as web-to-print, MIS/ERP, workflow automation, and business intelligence offers numerous benefits. These companies not only optimize day-to-day operations but also foster stronger customer relationships, enhancing customer retention. In an industry where competitiveness hinges on technological prowess, businesses that leverage software solutions emerge as leaders, distinguishing themselves as the “haves” in a landscape of “have nots.” 

For owners and sellers of innovative packaging companies, embracing technology opens doors to new opportunities. Acquisitions by larger packaging organizations offer access to greater resources, expanded distribution networks, and accelerated technology scaling. By aligning with industry leaders, innovative packaging businesses can unlock their full potential and propel themselves towards sustainable growth and success. 

In the cloud, or on-premises

When considering tech investment you need to consider where you are hosting the requisite software purchases, in the cloud or on-premises.

Software as a Service (SaaS) offers an appealing option, initally,as it shifts capital expenses to operational costs due to its subscription-based model. However, while SaaS solutions often offer lower upfront costs compared to traditional software licenses, the subscription-based pricing model can lead to higher costs over time. Also, Adopting a SaaS solution may result in vendor lock-in, where businesses become heavily reliant on a particular vendor for their software needs.

Some companies may opt for on-premises infrastructure to maintain data privacy and ownership. By hosting software internally, organizations retain full control over their tech infrastructure, mitigating reliance on external vendors. Additionally, on-premises deployment often involves upfront payment for licenses, eliminating recurring subscription charges and reducing the Total Cost of Ownership. Ultimately, the decision between cloud and on-premises hosting hinges on factors such as data security requirements, budget considerations, and organizational preferences.

Legacy systems

When considering selling your business, potential buyers will undoubtedly scrutinize various aspects, including the state of your IT infrastructure. One crucial factor they’ll assess is whether you rely on homegrown systems managed by an in-house IT team or utilize reputable software solutions available in the market. The former approach often entails dependency on a small group of individuals who possess specialized knowledge of the system. However, this reliance can backfire if these key personnel retire or depart, leaving you stranded without adequate support to maintain and update the system.

On the other hand, opting for software from a trusted vendor offers numerous benefits. These vendors spread the costs of system maintenance across their customer base, ensuring continuous updates and improvements. Moreover, their skilled team of developers possesses deep expertise in the software, guaranteeing ongoing support and troubleshooting assistance. By steering clear of legacy systems and embracing modern solutions, businesses can mitigate risks and ensure long-term operational efficiency.

HiFlow IMP

The importance of in – depth analysis 

Selling a business is a complex endeavor that requires careful consideration and strategic planning. One crucial aspect of this process is selecting the right M&A partner who can provide in-depth analysis and valuable insights. At New Directions Partners, we go beyond surface-level evaluations by conducting thorough assessments of potential sellers. This involves not only touring facilities and speaking with management but also delving deep into the financials. Our extensive experience working with diverse companies allows us to identify strengths, weaknesses, and areas for improvement. As part of this evaluation, we also assess the technological infrastructure of the business. This comprehensive approach ensures that sellers receive a comprehensive understanding of their business’s value and potential, empowering them to make informed decisions throughout the M&A process.

Plan for investment before you sell 

Strategically thinking about expanding your capabilities and adding smart packaging technologies will result in an increase in interest by private equity groups. Are you thinking about selling your business? It’s crucial to strategize for expansion and integrate smart packaging technologies to attract private equity interest and maximize the value of your hard work. Whether you’re considering immediate investment or planning a gradual approach, modernizing your infrastructure is key.

If you’re still relying on outdated methods like scheduling whiteboards or Excel spreadsheets for estimates and inventory management, it’s time to upgrade. Not only does this enhance your business’s value, but it also improves efficiency for you, your team, and your customers. Upgrading your technological infrastructure not only boosts revenue and cuts costs but also makes your business more appealing to potential buyers.

Or–maybe you’ll decide to stick around a while longer to enjoy the fruits of your judicious investment in technology!

About New Direction Partners 

New Direction Partners, founded in 2009, leverages its collective years of industry experience to work with business owners, offering a variety of services. The organization also conducts acquisition searches for potential buyers, offers valuation and strategic planning services, and has expertise in capital formation and financing. 

For more information visit www.newdirectionpartners.com or contact info@newdirectionpartners.com. 

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