Business Consulting Business with Government & Commercial

March 22, 2025

by a searcher from University at Buffalo, State University of New York - School of Management in Herndon, VA 20170, USA

Submitted LOI on business consulting company that provides organization effectiveness, alternate dispute resolution training, and DEI training. Mix of government & commercial contracts. Great margins and management infrastructure. BUT, concerned about the big government changes. Anyone have this type of business that can offer advice?

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Reply by an investor
from Pennsylvania State University in Charlotte, NC, USA

Hedge risk as much as possible. So if the buy side, delivers, then everyone is happy. If the business isn't as it seems or economics change, then you're protected to some degree. You mentioned 3 revenue streams. How are they closed and what was the focus of the relationship with the customer. If majority of relationship is resolution training and they add DEI training later on, this is a very different deal flow than the reverse. We had a connection where their business drop 50% overnight because the majority of their lead gen came from the DEI side which impacted their other revenue streams..

Reply by an investor
from University of Southampton in Los Angeles, CA, USA

As an investor I'm passing on anything with high government exposure right now and the fact that this is DEI focused consulting would make me even more nervous. Even outside of the govt. the news is awash with large companies shedding DEI targets and hiring mandates (which likely trickles downstream). I'm a strong believer that you can make almost any acquisition work but you're likely running steeply upfill from day 1 here so would suggest to proceed carefully....always have to ask yourself a) why is this business coming to market now and b) why am I the lucky owner?

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