Adopt & Embrace - One year on….
- 14 November, 2016 10:31
Adopt & Embrace wins Excellence in Customer Lifecycle Management Award at the Microsoft Australia Partner Awards 2016
"Starting a new business comes with many highs and lows. You start out wearing every single hat, then you build a team around you, and suddenly it’s all about how you take those hats off one by one."
The words of Adopt & Embrace co-founder, Paul Woods, speaking to ARN, reflecting on the one year milestone of his Microsoft Office 365 consulting and professional services business.
"The easiest way to start a company and get cash flow in, is to sell your time and your expertise,” he explained.
"So the first few months, we have been very focused on professional services delivery and building relationships with existing channel partners to do that."
Adopt & Embrace works with Microsoft partners and customers to consult and improve Office 365 adoption.
The business also looks to help organisations harness the value of their investment in Microsoft's technology, spanning OneDrive for Business, Skype for Business, Yammer and SharePoint Online.
Woods took the entrepreneurial leap after spending nearly 10 years at Data#3.
In 2010, he launched and lead an internal business that focused on helping companies source value from the Office 365 licensing the systems integrator sold to them.
Five years later, and upon noticing particular indications in the market, coupled with business picking up at Data#3, Woods found himself at a crossroads.
"I started noticing signs in the marketplace," he added. "Microsoft made some changes around how they paid rebates to their partners and how they paid their salespeople.
"So there was all that existing infrastructure there to make momentum in the market. This lead me to weigh up the decision whether to carry on with the business or become an entrepreneur.
"But if I had started Adopt & Embrace in 2010, I would have been bankrupt in about three months because the market timing wasn’t right."
Since inception in 2015, the company has hit the ground running, ticking off major milestones along the way, including picking up the Microsoft Partner Award in the Customer Lifecycle Management category.
"Winning was not only a great opportunity to build credibility and authority in the marketplace, but we also closed our first six-figure customer engagement with a Queensland-based organisation, which has served as our foundation over the short to medium term,” he said.
“We also established some very strong partnering arrangements with Insync Technology, Dimension Data and Insight."
Accordings to Woods, whilst the company was initially focused on professional services delivery upon entry into the market, plans are now in place to execute a longer term play.
“Now that we are an established company, our focus has moved to questioning how we can transition lumpy, project-based work into longer-term two, to three-year customer lifetime value discussions," he added.
"We are looking to then turn that into a prolonged managed services style of engagement, where we can continue to help the customer and the partner unlock value at the same time."
Since its founding, Adopt & Embrace has built its team to a total of seven, in preparation for expansion.
Based on the financials, Woods said his business is set for 700 per cent year-on-year growth.
However, he divulged that the company has come along way since its birth, as Woods bootstrapped out of cash flow, like many other startups in Australia.
“There are no angel investors, no VCs," he explained. "Just a few credit cards, a little bit of redraw on the mortgage, and a dream."
In January this year, Adopt & Embrace reported revenue of $649.00, with the numbers quickly climbing to $35,236.23 in July.
According to Woods, Adopt & Embrace’s total revenue from its October 2015 inception to July 2016, stands at $128,788.65, with a total of 12 customers and 24 invoices raised.
"While most of that revenue was project based professional services, we have started to build out some recurring revenue managed services style engagements with some of our smaller customers – approximately $2,000 per month," he explained.
"We have since made investments in this area around intellectual property to amplify this aspect of our business over the next 12 months."
Based on what Adopt & Embrace is expecting to invoice in November, Woods said the company will be at $190,000 revenue after the first five months of the FY17 financial year – more than double what the business made in the first nine months of the business in FY16.
"We have $233,000 of booked revenue throughout the rest of FY17 at present, which assuming we sell nothing else, takes us to about $423,000 revenue for the FY," he said.
"That being said, we have plenty of capacity and pipeline to grow that number significantly during the second half which will be our focus.
"Cash position is stronger than the update at the end of July. If we don’t sell anything else and just deliver what we have booked at the moment, we will run out of cash in July 2017."
In comfortably running a company that is at a cash flow positive stage, with a strong pipeline ahead, Woods said he sees that light at the end of the tunnel in terms of achieving his goal of becoming a successful small business.
Yet the potential of expansion beckons.
"In the back of my mind, the opportunity here is so significant that we don’t have to grow to a super-size, but if we focus on growing different markets, it’s just the natural evolution to expand," he added.
According to Woods, Office 365 is adding new functionality every week, alluding to more opportunities for existing customers as well as new ones.
"All of our business is based in Brisbane at the moment and looking at the eastern seaboard down in Sydney and Melbourne, there is definitely opportunity in those markets that are currently being under-served in terms of what we are doing," he added.
"At the moment, we are flying back and forth to deliver the outcomes they are looking for. From a growth point of view, the next obvious step would be establishing our presence in Victoria and New South Wales."
Currently, Adopt & Embrace’s engagement with local government is constituting nearly 50 per cent of the business and, over the next couple of months, the business has projects in place servicing the mining industry in Western Australia, central Queensland, and Kalgoorlie.
“We have a finite amount of time where we have a bit of a lead in the market," he added.
"I know that there are other similar organisations already starting to appear, so we want to take advantage of the our market positioning at the moment."
"Cash is oxygen," Woods added. "If you read any statistic or report about any small business or startup in Australia, normally the number one reason for failure is cash flow. It doesn’t matter what you invoice. Cash in the bank account is King."
For Woods, planning his financials is focused around “the runway” - a mind-shift having moved from managing a P&L in an ASX-listed company.
"I have stopped thinking about “end of month” and how we recognise revenue," he said."The focus is further down the value chain. How fast are we collecting cash? When will that invoice be paid?
“If the runway gets out of hand, you know that two months ago you should have taken that extra meeting, or followed up on that opportunity one more time.”
Woods added that a key takeaway he is looking to carry on through to the new year, is ensuring he constantly embraces the industry and entrepreneur community.
"Building your network and being a good contributor to that network pays dividend," he added. "Respecting others and offering value where you can within that network, pays back threefold."