How many companies do you find with great management teams and excellent systems, but who do not have a diversified customer base? Their cash flow is dependent on one or two customers. Why would buyers spend millions of dollars on a business only to have those customers go elsewhere after they’ve acquired the company? At the very most, a prudent buyer could structure a buyout to protect against the loss of a key customer, probably
BY DAVID MAHMOOD It’s simple: High-risk companies sell for less. Low-risk companies sell for more. Here’s how to convince a buyer that your company is low-risk. Every day, thousands take small risks in hopes of getting a big reward. They are known as gamblers. They purchase lottery tickets, visit casinos, go to horse races, and place small bets. Most of these people do not risk much, but if they win, the reward can be huge. However,
The answers are essential to aligning strategy, tactics, and customer-focused outcomes. Aug. 27, 2013 Jason Piatt It seems that no time is convenient to pause the action and review strategy. When you’re in the thick of the battle to produce a product on time, under budget, with superior quality, a strategic review may seem like a waste of time or a misuse of resources. That said, failure to review strategy may result in getting to the
By Maurie Cashman Today, let’s talk about tactics. According to Wikipedia, tactics are conceptual action(s) implemented as one or more specific tasks. Strategy is a high level plan to achieve one or more goals under conditions of uncertainty. Strategy is important because the resources available to achieve these goals are usually limited. So we must choose tactics necessary to accomplish your strategy and figure out how you will implement your decisions. Tactical Planning must support your Strategic Planning.
By Maurie Cashman Business fundamentals are the first value driver that needs to be examined by an owner in building the business value necessary to achieve the post-business ownership lifestyle he or she desires. That first step is to create a written value-building plan that: • outlines what must be done to reach your goals; • makes specific recommendations about how to achieve each task; • designates the person(s) responsible for accomplishing each task; and
In our last newsletter we discussed the need to Close the Gap Between You and Your Successful Financial Future, the process that you and your advisors can use to establish two important guideposts: The amount of money you will need to live a comfortable post-transition life; and The current value of your company. If, as is the case for most owners, you discover a gap between the two numbers, you can begin to close the
By Scott Yoder, October 16, 2013 See Scott’s profile in our advisor directory. Takeaway: We asked seasoned exit planning professionals how to avoid leaving wealth behind when selling a company. Their answers educated and inspired us. Source: flickr/Muffet I recently attended the Exit Planning Institute (EPI) annual conference. Besides the great presentations and the networking, I was fortunate enough to connect with a number of seasoned exit planning professionals.I couldn’t help myself and had to ask them the key question I always
By Joel Garfinkle on September 16th, 2013 Are you feeling disappointed and frustrated that your employees are producing less than stellar results? Worried that maybe your expectations are too high? Relax. Having high expectations is great. You just need a strategy for applying them. Here’s a three-step process that will boost your employees’ performance across the board. Set high expectations Communicate specifics Apply accountability Set high expectations. As a leader and manager, you are responsible for creating the environment where
Last week, we reviewed the situation of fictional owner, Joe Davolla. He and his advisors had identified a $1,000,000 gap between the current value of his company, and the value he’d need from it in five years when he plans to complete the transition of his ownership. What Joe needed, and what many owners need is to grow business value, and grow it quickly and sustainably over several years. To accomplish this, owners need to
DO YOU KNOW YOUR GAP? By Maurie Cashman After taking a bit of a sanity break last week, let’s get back to business by talking about the gap that you may need to fill between your objectives and the reality of your ability to transition ownership in your business.