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Case History (Part 7 of 7)

6 June 2008 No Comment

Case History

We worked with a company through all these value components and guided them to very specific actions to implement. Building on their existing strengths and operations they could leverage their existing momentum while staying true to the founders’ initial vision, intent, and approach. It took a year of focused attention. During that year the management team was more effective even though the company doubled in size, and the financial rewards were even greater. On their own the company doubled in size the following year and maintained strong customer, revenue, and profitability growth.

When they decided to take a buyout offer, the price was approximately 80% greater than a typical company of the same type and size would normally have commanded. The acquiring firm saw the thinking, planning, strategy, documentation, systems, and management that had been put in place and immediately saw the opportunity – with minimal execution risk.

The CEO/owner of the company said “We couldn’t have done it without you”. He had never been through the whole life cycle of a company and didn’t really know what to do to get to the next level and keep going. He also realized that an outside perspective, lots of experience, and a specific methodology were critical to making the right progress. He was smart – he started looking for help when things were going great and there was still room to run before changes would need to be forced by circumstances.

Conclusion

You already have a business that’s up and running and profitable. To capture that extra value takes an investment of your time, effort and focus. You will feel the benefits both in immediate profitability and ultimate value, not to mention the added benefit of smoother operations and fewer surprises. Building the right team, strategy, and systems is already part of your job description as the CEO. Doing those knowing how they each increase the value and salability of your company is the highest return on invested time and money you can make.

You and your management team are all lost in the same forest. Unless you’ve been through this cycle a few times and have the knowledge base outside of your company you can’t do it alone. Tapping into the expertise and experience of people who have been through all this before is the easiest way to maximize your value – and get the terms you want.

If you’re ready well in advance of having to do something you’ll increase your chances of success. Working with the right team will help you get ready – and move when the time is right.

What to do now:

  1. Find some people outside your company who have done what you want to do and ask them about what they learned going through it.
  2. Create a comprehensive list of goals, including personal and corporate, long and short term.
  3. Talk to some of the experts you will need sooner rather than later. Every one of them will tell you they can help you more if you start earlier – and usually for less time, effort, and money.
  4. Everything is connected, inside and outside your business. As a CEO/owner some of your business decisions will be influenced by personal concerns and vice versa. Make sure you get advice with the proper context.
  5. Ownership and management are not necessarily linked – decide if you want to be both, like you are now, or one, or neither. 197 of the top 200 companies in the country were started by one single person who was able to build it so it lived beyond the original owner – and continued to thrive. The point is to put you in control of your own business destiny.

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