An aggressive growth strategy is serving Impact Networking well as it celebrates its 20th anniversary.
Top: Frank Cannata was honored to be a featured speaker at Impact Networking’s All Company Meeting, which celebrated the dealership’s 20th anniversary. Here he is on the stage with Impact’s leadership team. From left to right: Meyer, Thomas Pieters, vice president of sales, and Cucco. Above: CEO Frank Cucco presents at Impact’s All Company Meeting.
We had the distinct pleasure of being invited to present at Impact Networking’s February sales meeting in Chicago. The Lake Forest, Illinois-based company has quarterly meetings, and this latest meeting marked a major milestone, a celebration of the dealership’s 20th anniversary.
We met with Impact CEO Frank Cucco the day before the sales meeting to learn about how the business began in 1999 and how it is currently performing, as well as his plans for the future.
“I had been with a couple of other companies and learned what not to do with customers and employees, and the importance of treating people fairly,” recalled Cucco about his underlying motivation to launch Impact.
With a commitment to people, it’s no surprise partnerships also played a key role. Cucco credits his relationship with Kyocera as being the “right” decision at the “right” time. When Impact first opened its doors, Bob Magrino, who was vice president and general manager of Kyocera Mita, had a joint venture startup program for new dealers like Cucco and Impact. There was an obligatory commitment of five years before the dealer could buy out Kyocera.
In less than four years, Cucco, ably supported by partners Dan Meyer, president, and Tom Pieters, vice president of sales, had established Impact as a $30 million enterprise. By 2007, Impact, with more than 80 employees, had begun an aggressive acquisition program, adding locations in Madison and Milwaukee, Wisconsin, and in Indianapolis, Indiana.
It’s common knowledge the 2008 economic downturn weighed heavily on our industry. Cucco and his partners were forced to temporarily rein in their ambitious growth plans as they navigated the challenged course. After deftly weathering that storm, Impact now has 17 locations, including eight in Illinois, two in Wisconsin, three in Indiana, and four in California. Approximately 650 employees support those operations and the company’s 14,000 clients. Today, thanks to strong, astute leadership, Impact boasts a 93% retention rate and the company is growing at a consistent rate of 27% year-over-year.
With a focus on acquisitions and a commitment to exploring new business opportunities such as website design, Impact’s aggressive growth strategy has proven to be profitable. Revenue for 2018 was $115 million, a $21 million increase over 2017. Cucco and his management team expect to see revenues reach $144 million in 2019.
Looking closer at revenue drivers, Impact’s IT business segment is thriving.
“We were told you could not sell 60-month IT contracts,” observed Cucco. “We hired a very bright IT guy, and he has shown us exactly how to do what [the IT experts] said we could not do.”
According to Cucco, hardware and IT revenues are split 50/50. This mirrors how many industry experts suggest dealers split their revenue between IT services and hardware.
Segmenting the company’s revenue even further, production print was responsible for $3.7 million, or 3.2%, of Impact’s 2018 revenues, while software was another $10 million (8.7%).
Impact’s key partners, particularly within the production and industrial print space, are Konica Minolta and Ricoh. Between these two vendors, Impact has a strong high-end offering. The dealership’s commitment to success in the high-volume space is further bolstered by the 200 employees Impact has working in this segment of the business.
With all this venture capital and private equity money flowing into the channel, we queried Cucco as to whether he’d consider selling or partnering with one of these firms. His response was an emphatic no.
“We don’t want to go where someone else wants us to go,” said Cucco. “We want to go where we want to go.”
As a charismatic leader, Cucco is the type of CEO anyone would love to follow wherever he decides to go. Over the years, we have spent a considerable amount of time with him and Dan Meyers, Impact’s president. Cucco and Meyers balanced each other out, with Meyers tempering Cucco’s aggressive business stance.
On a comical note, we once suggested to Meyers that Cucco should think about buying a plane. Meyers paled and replied, “Please don’t tell him that because he will do it.”
We congratulate Impact Networking on 20 successful years as an industry leader. We look forward to catching up the company again soon.
Impact Networking’s All Company Meeting packs a full house.
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