Intentional Business Schizophrenia

[HCHTech]

My business name is "Home Computer Help" - unromantic to be sure, but literal and it has grown on me over the years. I will have been in business for 12 years this summer.

I was lucky last year and took an opportunity to purchase another mobile computer repair business in my area. This business has almost 100% commercial clients. I have purchased the name of the business with the other assets, so among other things this afforded me the opportunity to easily bifurcate my customer base - residential customers can be billed under my original company name, and commercial customers can be billed under the new company name. BTW, everything is under one EIN, the new name is a d/b/a in my amended fictitious name filing. In fact, I'm using "classes" in Quickbooks to be able to see the accounting separately as desired.

It has always bothered me about marketing to business customers under the name "Home Computer Help". I'm not aware that the name ever cost me a potential customer, but who can really tell about things like that. Anyway, the new name under my umbrella is much more "business friendly".

So - I've been cogitating on how to change my branding to encompass both names. After a couple of months of thinking about it, I believe I'm just going to go forward as if it were two companies. I'll have two business cards, two websites, two phone numbers, two names & our shirts will have both names/logos. I even thought about making a double-sided business card, but that didn't really seem right.

Has anyone else been this situation before? What do you think about maintaining the split as I've outlined? There is no question that it is more work, but the marketing advantage seems to outweigh that.

 

[Mike McCall]

You should speak with a professional tax advisor about all this, but there may (or may not) be some advantage to incorporating under a single name and running the two businesses as different divisions. Short of that, the next question I would ask is whether I could operate two separate businesses well. If you're into something on one side, who will handle things on the other?

 

[HCHTech]

Yes, I spent money on attorneys and accountants when I was investigating the purchase. I'm an LLC and everything is under one EIN. I am running the new company as a division, as you say. I have a second tech in my company already, and the previous owner and lead tech will be in the picture part time for a couple of years, so we are juggling calls ok for now.

 

[ohio_grad_06]

Why not just call it your forum name? HCH Technologies or something like that. Just leave out the home computer help, When you market to residential though, you can say "for home computer help, call HCH Tech" or something like that. But just use the abbreviation. That way to a business, HCH sounds professional enough, but you can still use that name to play to the residential clients for marketing.

 

[Mike McCall]

Yes, I spent money on attorneys and accountants when I was investigating the purchase. I'm an LLC and everything is under one EIN. I am running the new company as a division, as you say. I have a second tech in my company already, and the previous owner and lead tech will be in the picture part time for a couple of years, so we are juggling calls ok for now.

Good thinking. Many overlook those things going in. I suppose I would continue to try and operate them as separate entities focused on different market segments. The differences in how you approach each segment can be substantial. I don't know that I would try to combine the two for the sake of perceived convenience in one-size-fits-all marketing. I tend to doubt its effectiveness. Why not run them separately?

 

[ohio_grad_06]

Could run seperately. I even like the life preserver on your sig. You could use that lol.

 

[nlinecomputers]

Why not just call it your forum name? HCH Technologies or something like that. Just leave out the home computer help, When you market to residential though, you can say "for home computer help, call HCH Tech" or something like that. But just use the abbreviation. That way to a business, HCH sounds professional enough, but you can still use that name to play to the residential clients for marketing.

I like this but he mentioned he purchased the company's name as well. If that is established then I would be reluctant to drop it.

 

[glennd]

I just like the vocabulary: bifurcate, cogitating....

 

[ohio_grad_06]

I like this but he mentioned he purchased the company's name as well. If that is established then I would be reluctant to drop it.

Point taken. If the other guy already had a well established brand, it may be best to leave well enough alone on that front and run them seperate.

 

[HCHTech]

I just like the vocabulary

You can tell when I've had too much coffee by the frequency of the four-dollar words...

 

[fencepost]

If you want to have any visible linkage, you could always just add to one of them "a XYZ company" where "XYZ" is the name you want to use as the "parent."

 

[NerdyBuddy]

I'm curious if this was a one-time business acquisition, or are you actively looking to buy more? If so, I would have a new parent company i.e. Google, and structure all new entities beneath it, i.e. Android. If not, I would simply run them as two separate companies unless you have the money & man-power to re-brand.

If you did want to use parent-child structure I would always make the "serious" one the parent - in this case, the new acquisition. Makes more sense to say "Professional Business Computer Co. now offering residential services" than the other way around.

 

[HCHTech]

I like this but he mentioned he purchased the company's name as well. If that is established then I would be reluctant to drop it.

Yep - I'm coming up on 12 years in business, so my name is definitely out there and established. I also imagine that it is a natural tendency to over-value your name-recognition. It might not be as important as I think it is.

Looking top down and ignoring my existing brand recognition - I kind of like renaming my company, then running the new one as "XXX", an HCH Technologies company. I tend to be drawn to the overly-complicated solutions, though. Good suggestion Ohio_Grad & Fencepost.

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"Is this a one-time acquisition, or are you actively looking to buy more?"
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We're nowhere near "done" with the assimilation phase, and we're just shy of 3 months in. This has been so much extra work, I can't imagine wanting to do it again anytime soon. It's all good, of course - it has doubled the size of my company and more than doubled my profitability - but it's a hell of a lot of work. I haven't had a "normal" work day since 1/1 - I've got to be averaging 70-80 hours per week. I'm ready for a vacation! 55 feels a heckofalot older than it did a few months ago.

The actual computer work isn't bad, it's all of the "administrative changes" that are killing me:

- new virtual pbx phone system (tons of hours invested, never worked acceptably, went back to cell phones in defeat)
- new accounting to keep everything separate (thanks MHD for not supporting that AT ALL - Thanks Quickbooks for making me hand edit every. single. entry. to assign a "class" so I can get separate reporting).
- Every vendor they had threw up road blocks making the transition difficult unless I was willing to give up 20 years of hard-earned margins...we're about 50% done with that job. I'm looking at you, D&H & Synnex.
- Took me 4 tries with my state's fictitious name bureau to get the name properly registered, then I had to do it again just slightly differently to make my bank happy so I could cash checks made payable to that name. This process alone took 12 weeks.
- Oh yeah, I had to learn Sonicwalls so I could support that (very large) portion of the business, then find out I have to pass their certification exam by 4/30 instead of the 12/31 they originally told me - so now I'm studying on top of everything else. Not to mention a $2K course I just signed up for to give me a fighting chance.
- Throw in 40 or 50 "meet the new guy" lunches/coffees just for good measure
- learning to love accounts receivable - I was SO lucky to not have to carry much of this in the past, maybe $8K or so on average - piece of cake compared to $30K average now. Then, just to be helpful, customers are still putting the name of the old owner on the checks, and I have to send them back for a re-do. Because of all of the expenses of the acquisition, cash is actually tighter now until I get a few months in and whatever "normal" cash flow is starts rolling. Yikes.
- Oh yeah, don't forget to keep showing up for BNI meetings and asking for more business!

 

[drpcfix]

I went through the same thing in 2007.

We had "Dr PC Fix" - and as we went after business clients, doing outsourced helpdesk/managed services - the name felt really wrong.

We decided to add a name, "All In Networks" - and we ran them as separate corporations with the intention that eventually we would sell one or both (probably to different buyers). Come to find out we could have just as easily done it as a single corp.. but anywho.

We had no trouble with the dual names, multiple phone numbers, etc - as usually it's super easy to put a client in one of those buckets.

We just had a rule of thumb that was - if they had an Active Directory server - they went to the business side.

Different types of technicians in both - and I pretty much right away stopped being involved with day to day in the residential side when we got our first few contracts.

We sort of got lucky, just offered an all you can eat plan to our biggest 5 business customers - and they all took it - we sort of went all in on MSP overnight.

Anywho - I think it's much simpler for those that have a name that works for both, I just couldn't find a name that worked for both that I liked.

And I probably secretly always wanted out of the residential side.

Once you learn AD/Exchange/all that fun stuff - you kind of don't want to do any more virus removals and broken screens

FWIW - "the marketing advantages" you speak of - we never realized/noticed - we got 100% of our new business as referrals, and probably it helped with branding/trust - but I doubt it got us any new clients.