How to create a big national business
Tuesday, 11 December 2007
Last Updated: Tuesday, 11 December 2007
By Amanda Gome
In 2003, Domenic Martino resigned as the high profile head of Deloitte Touche Tohmatsu after becoming embroiled in the collapse of junior telco, NewTel.
But instead of heading off to another corporate job, he became an investor, sinking his money into several companies. Then in 2005, aged 50, he turned entrepreneur, rolling up his sleeves to takeover computer reseller ComputerCorp from founder Hugh Smith.
He has overseen the company as it went from $50 million revenue to almost $150 million in two years. This week a merger with Melbourne-based Leading Solutions was finalised. The combined entity will have 430 staff and is expected to generate revenue of $300 million in its first year. Domenic will continue as chairman.
He tells SmartCompany how he took the small state-based business and turned it into a national organisation. Domenic is happy to answer your questions. Email feedback@smartcompany.com.au
Amanda Gome: In the late 1980s while you were at Deloitte, there was a huge number of companies springing up to service the computer industry. Why not stay as an adviser?
Domenic Martino: I wanted to be part of the action. I had always been in corporate finance and really wanted to get out and be one of the principals – not an adviser any more.
Was ComputerCorp a client of Deloitte?
Yes. I saw it and liked it. I was looking for a company that had good management and could find opportunities rather than the other way around. When I left Deloitte in 2003, I did a few investments and started working on a succession plan for ComputerCorp.
But you could also see the entrepreneurial opportunity?
Many of the computer companies that started in the late 1980s were run by local entrepreneurs who were state-based, still in control and undercapitalised. They had had a good run, so they were still in control. But the problem was that their clients were changing.
Instead of buying stationary and computers from different states, companies wanted the cost benefits and efficiencies from buying from one supplier.
Clients were looking for a seamless service across Australia. But there were few large national companies in the reseller market.
Consolidation had happened much earlier in the US so it was surprising it had not happened in Australia and the industry was so fragmented.
Was it hard to take over a medium sized business from the founder?
No. Hugh Smith started the business in his early 40s. He was the original entrepreneur who started the business from scratch. But he was in his 60s and had done a great job, and had come to the time of his life when he wanted to do something else, but he wanted the business to continue. We can still ring him today and he will come in and give us advice.
What needed to change?
Hugh had done a great job taking the business from start-up to $50 million revenue and expanding it.
When I joined about half the revenue came from Perth, a quarter from Sydney and the rest from the other states. Huge could see that it needed to go national. But that’s difficult. The state-based operations were replicating what we had in Perth.
They were not talking to each other and while local people were facing local markets, there was no national approach where people pooled resources. So while we might have a great team in Perth to bid, there could be no one in Sydney to work on the job. So the company had major problems.
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