How I led a tough negotiation to buy my business

Telecommunications wholesaler ispONE started in 2002, founded by entrepreneurs Zac Swindells and Chris Monching. The company has experienced substantial growth during the past 10 years, with revenue now topping $60 million.

But it wasn’t an easy start. Swindells had to endure a tough business negotiation to get started – and although the pair came out on top, it was a volatile beginning involving some harsh negotiations.

So how’s business been going?

This year there’s been a lot of talk and speculation about the market being in a downturn. We’ve seen a slowing of business, but it’s still growing from our last financial year. We’ve gone from $30 million to $61 million in the last financial year. The business model we created a while ago and having established is paying off.

You got your start by buying another business. How did that begin?

When we first started we registered in December 2002. For the next six months we started looking at ways the business could work in the market. Our business model was to go as a wholesale internet service provider, not to go retail, because retail obviously requires a lot of expense and expertise.

We thought there was an opportunity in pure wholesale. To enable us to do that, we looked at acquisitions that could bring in some income to the business that would not detract from the day to day running.

How did you come across the business you wanted to buy?

I’ve spent a lot of my time in wholesale, and I was contacted by one of my previous clients. He was going through a financial headache, issues with the tax office, and had some hefty debt there. We had a look at it, and we really liked the employees who were there.

We also really liked this small part of the business to do with the billing process. It was just in the early stages, but it was good. There was a web hosting part of the business, which had nice revenue and profitability there too which was low maintenance.

What happened next?

We put an offer in, and part of the offer was that we’d work with the tax debt over the next several years. And we thought we had a good deal in place. But at the last minute, the previous owners decided to renege on the deal and they backed away.