How to add a new division to an established mid-size business

We were approached by a company with approximately 300 employees primarily working in premise wiring and legacy telephone systems.  They were looking to diversify their offerings and get higher in the contractor food chain.  They were well funded, but since the IP-based phone systems were already in demand and beginning to gain traction in the marketplace, they recognized the need to update their telephony practice.  At the same time, they also wanted to shore up their public sector business that did a tremendous amount of premise wiring.

After working with the president of the organization, we were able to help them expand their offerings to include data networks expanding beyond the data jacks to provide full solutions including networking gear, servers and end-user devices.  This allowed for more complete bids on projects and taking advantage of e-rate funding to provide full solutions and bid projects as a prime rather than as a sub or partnering for bids.

In addition, we brought on videoconferencing vendors and other multimedia vendors, allowing for diversification of the business into higher margin projects such as conference rooms, auditoriums and other related projects, allowing for sales to corporate customers and eliminating some of the seasonality of the business.

Implementation of the plan included identifying and selling several projects, which allowed the hiring of additional technicians and expertise to further grow the department.  The net result of the effort was a new division that grew from zero in revenue to $3M in revenue in just over a year, employing 4 technicians and netting 25% profit.

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