Red Sky Solutions

Background:

Red Sky Solutions, initially a modest IT consulting, design, and cybersecurity company, faced challenges as it rapidly scaled from 10 million to 30 million in revenue. Realizing the need for robust financial infrastructure and processes to sustain and accelerate further growth, the company sought the expertise of Amplēo, a fractional executive firm recommended by their financial advisor, Matt Zundel from Coign Capital.

Challenges:

Red Sky lacked a CFO, controller, and scalable processes despite increasing demand for their services. The existing QuickBooks software and inadequate financial management threatened to impede their growth trajectory.

Engaging with Amplēo:

In 2013, Red Sky partnered with Amplēo to address their financial and operational challenges. Chris Barney, Red Sky’s CEO, recalls, “I was focused on sales growth rather than on financial operations. While I knew our business well, I had to recognize that I was not a controller or a CFO. I needed smart, experienced people in those roles. Partnering with Amplēo added immediate value to our company that fueled our growth and eventually led us to be acquired for top dollar.”

Amplēo’s CFO and controller conducted a thorough assessment, streamlined financial processes, and facilitated the transition from QuickBooks to Netsuite. This overhaul included refining systems from quote to cash, ensuring effective cash management, and providing clarity on accounts payable and receivable. Amplēo not only revamped financials but also played a pivotal role in creating scalable processes. They trained Red Sky’s team in adopting these new systems, ensuring a smooth transition and fostering a culture of financial efficiency.

Chris emphasizes, “If you aren’t preparing for growth with your financial systems, and processes, then it can really hurt you if you do grow. Whatever inefficiencies or challenges your business might have, they grow too, and often faster than revenue. You can’t just sell your way to growth. Ultimately, your business is a vehicle that moves you from point A to point B. The engine must be tuned and running on all cylinders for the journey ahead, or else you risk not making your exit. I cannot stress enough the need to plan and prepare for growth early.”

Results:

With Amplēo’s assistance, Red Sky achieved remarkable growth. Growing the business from 30M to 100M in revenue in under 5 years. Soon after, Red Sky Solutions was acquired by Presidio, a 5B dollar systems integrator. During the acquisition due diligence by Presidio, Red Sky received praise for having “the cleanest books” ever seen for an organization of its size. Chris reflects, “To this day, it still makes me proud,” highlighting the enduring impact of the partnership.

Chris Barney attributes the increased valuation to Amplēo’s contributions. The acquisition by Presidio not only validated Red Sky’s success but also garnered top dollar due to repeatable and scalable processes and meticulously maintained financial records.

Post-Acquisition Success:

Chris Barney continued with Presidio, post-acquisition, as the SVP of Strategic Business Development, and applied the systems and processes introduced by Amplēo at Red Sky. Chris grew Presidio’s cybersecurity division from ~400M to 900M in just three years. Chris said, “It turns out that the systems and processes Amplēo brought to Red Sky Solutions not only scaled at a regional level but nationally as well.”

Lessons Learned:

Chris emphasizes, “Finance should be treated as a strategic part of your business. It’s what enables and propels growth. If businesses ignore this fact, it is to their own peril. Finding and partnering with a company like Amplēo can help you prepare and maintain sustainable growth even if you believe you can’t afford a CFO now. At Red Sky Solutions, we couldn’t afford not to!” He urges businesses to invest in financial systems and processes as early as possible in the growth cycle.

Conclusion:

Red Sky Solutions journey from a 10M startup to a 100M acquisition success story is a testament to the transformative impact of Amplēo’s strategic financial guidance. By addressing crucial financial and operational challenges, Amplēo became a true partner in Red Sky’s growth, ensuring not only success but also an optimal exit strategy through acquisition. Chris Barney’s endorsement of Amplēo as a strategic advisor reflects the lasting impact and value the partnership brought to the organization.