How Ron Johnson grows his agency with strategic acquisitions

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Global corporations often use acquisitions for growth, but even small businesses can do the same. Ron Johnson, owner of Chicago-based web design and development agency CyberOptik, has purchased several small agencies over the past few years.

While these strategic acquisitions aren't the only way Ron grows the business, they have allowed CyberOptik to quickly add many recurring clients while also increasing the scope of services provided.

The approach Ron shares in this story could be easily replicated by business owners in other industries.

Background

The CyberOptik story began back in 2002 while Ron was still in middle school. "While most kids were being social and doing sports," Ron said, "I was a bit anti-social and certainly not into sports. I spent my time playing video games and building out a little business online." He started the business as a teen and grew it slowly while he was a student.

Ron also experimented with search engine optimization (SEO), pay-per-click (PPC) advertising, and other skills that helped with growing the sites he created.

In 2010, after graduating from Elmhurst University with a BS in Marketing, Ron went full-time with CyberOptik.

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Growing Through Acquisitions

Ron bought and sold several websites and domains over the years, and as he said, "Some have panned out, some were flops, it’s part of the accepted risk."

But in 2019, after running CyberOptik full-time for nine years, Ron took a major step forward by purchasing his first web design shop. It was a one-person operation with fewer than ten clients, and Ron rolled the business into the CyberOptik brand.

Over the past 4-5 years, Ron has acquired several other agencies, some smaller and others larger than the first. He found some of these on marketplaces like Flippa and BizBuySell, but points out that "most of my acquisitions have come through networking."

Ron emphasizes that strategic acquisitions are a part of, but not the entire, growth strategy for CyberOptik. "Acquisition of other agencies is just another lever I look at to help grow the business," he says. "Essentially, I’m buying MRR [monthly recurring revenue] to bolt on to my existing agency, hoping to break even after a certain amount of time. We still advertise and actively promote the business outside the acquisitions, so we’re growing through multiple fronts."

As you can imagine, Ron has very specific criteria that he looks for in an acquisition.

• WordPress-focused: Since CyberOptik is a WordPress-based design and development agency, Ron looks for others specializing in the world's most popular content management system.
• Age: The business should be at least three years old.
• Clients: Ron prefers smaller agencies that manage fewer than 25 clients.
• Team: Ron prefers businesses using contractors rather than employees.
• Location: Preferably, the business is located in the US.
• Easy integration: Every acquisition is rolled into the CyberOptik brand, so Ron looks for synergy that makes for a smoother transition.

Ron has found that agencies with fewer than 25 clients typically provide a smoother transition. "Other deals I’ve done have been much larger than this," he says, "but this has been a ‘sweet spot’ in terms of being easier to roll up into CyberOptik."

In August of 2022, Ron acquired Prism Design Co, the largest of four acquisitions (totaling $188,000) on Flippa. This acquisition allowed CyberOptik to add marketing and SEO to its offerings through a contractor that came over with Prism Design Co. Now, Ron can offer these additional services to all his clients.

Integrating Into the CyberOptik Brand

When Ron interacts with someone looking to sell their agency, CyberOptik's track record is a significant advantage. Most agency owners want to know that their clients will be in good hands after the sale. Since Ron has been through the process several times, sellers have confidence knowing they're selling to an established business that will care for their existing clients.

Of course, not all of the seller's clients will remain on board after the acquisition. However, Ron and his team have managed to maintain most of them. "We’ve found that SEO clients have the highest churn by far," he said, "but I always hop on a call with each client to introduce ourselves and walk through how we do things, who their points of contact will be, etc."

While acquiring clients is great, keeping them is even more critical. One of the reasons why Ron specifically targets smaller agencies is that CyberOptik can continue to provide the personalized touch larger organizations often lack. "We’ve grown leaps and bounds over the past five years," he said, "and we will continue that growth, but one of my big focuses is keeping our quality level high."

Ron has spoken to clients about their concerns that larger agencies don't provide as high a quality of service, so he's intentional about growing in ways to work for the business and clients alike. He said he is focused on building "internal structure and processes so that no matter where in the client journey they are with us, they know who their point of contact is, they have someone who cares about them as a client, and someone they can always ping with questions/concerns to get a quick response back."

Ron's approach of using strategic acquisitions as one method of growing CyberOptik is inspirational. Owners of other agencies and businesses can look at Ron's example and see how a similar strategy could work for them as well.

If you're ready to look for businesses to acquire, see our list of the top marketplaces and brokers.

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