potholes presentation 032111 final

8/7/2019 Potholes Presentation 032111 Final

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PROJECT

DATE SPONSORMARCH 22, 2011 BEACON EQUITY ADVISORS AND GROWTH STRATEGY PARTNERS

FILLING IN THE POTHOLES

SMOOTHING THE RIDE TO A BETTER EXIT

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PREPARING / GROWING

YOUR BUSINESS

TO SELL


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USING GROWTH

AND OTHER TECHNIQUES

TO FILL IN THE POTHOLES

SMOOTHING THE RIDE TO A BETTER DEAL

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Potholes cause problemsThey slow deals down,

derail them, or

completely sink them

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Filling in these

potholescreates a betterbusiness

...and increases the value

of your business

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Five Potholesto fill in Today1. Be Number 1

2. Customer Relationships

3. Brain Drain

4. Family Business

5. Growth Trends

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David Humphrey,CPA, CVA President

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[email protected]

781.551.8000

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PROJECT

DATE DEALMAKERSINCE 1985 BEACON EQUITY ADVISORS20 YEARS AND HUNDREDS OFBUSINESSES LIKE YOURS

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Christopher DiCensoFounder and partner

Enter GSP logo here

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[email protected]

781.837.3276

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Quickly and effectively grow

Revenues, Profits and Talent Developed 7 Keys to Growth Impacts of over 500% Revenue Growth

and 100% Profit Growth

Assisted M & A firms for six year

GROWTH STRATEGY PARTNERS

Pothole #1

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The Most Valuable

Companies are Leaders in

some aspect of their

Industry

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What the Buyer Wants

To Brag - What

does he tell his: Wife

Friends Investors

To Feel Secure To know the business

is not going away

when you leave.

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Why do Customers buy from you?

Central Location

Exclusive Products

Breadth of Products

Depth of Products

Different from Big Boys

Most Delivery Trucks

Greatest Penetration in

Territory

Patents / Trade Secrets

History of Working

Together

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Why do Customers buy from you?

Want the buyer to leave skid

marks in your parking lot?

Relationship with the owner

Price

Customer Service

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Product / Service Customer Priority Matrix

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Characteristic Priority Importance Score

Service 1 35 8

Product 2 20 9

Relationships 3 15 7

Price 4 15 7

Turnaround 5 5 8

Convenience 6 5 9

Industry Experience 7 5 7

Product / Service Customer Priority Matrix

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1. What are the top three reasons you do business with our company?

2. How would you rank the importance of these characteristics?

3. On a scale of 1 to 10, with 10 being the best, how would you rateour company overall?

4. Who is one of your top performing suppliers and why?

5. How much of your total business do we provide to you?

6. On the 1 to 10 scale, what is the likelihood that you would yourecommend our company to a friend or associate?

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Pothole #2

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CUSTOMER RELATIONSHIPS

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BETTER PRODUCTS

NON-COMPETE AGREEMENTS

NON-SOLICITATION AGREEMENTS

MULTI YEAR CLIENT CONTRACTS

MULTIPLE SALES PEOPLE

OWNER HAS RELATIONSHIP

- BUT NOT KEY SALES ROLE

CREATE STICKY

HOW DO YOU PROTECT YOUR CLIENTS


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MAKE THE RELATIONSHIP ABOUTTHE CLIENT AND THE COMPANY

NOT ABOUT THE CLIENT AND

PEOPLE, ESPECIALLY YOU

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WE GOLF ALL THE TIME

OUR FAMILIES VACATION TOGETHER

HE IS MY COUSIN

DONT WORRY THEY CANNOT GO ANYWHERE

THEY GO OUT TO BID EVERY FEW YEARS

THEY HAVE A NEW PURCHASING MANAGER

THINGS TO AVOID


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TAKE VACATIONS

ROTATE RELATIONSHIP MANAGERS

ASSESS CUSTOMER RELATIONSHIPS

REDUCE RISKY

CUSTOMER

RELATIONS

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Pothole #3

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THE BRAIN DRAIN

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The Fear That Knowledge

Leaves with the Sale26

BRAIN DRAIN

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IDENTIFY KEY/CORE BUSINESS

PROCESSES AND KNOWLEDGE

WRITTEN MANUALS

OFFICE POLICIES & PROCEDURESCRM TOOLS

ORDER / DISCOUNT HISTORIES

VENDOR DATA / CONTACTSMULTIPLE PEOPLE WHO KNOW WHAT TO DO

LIMITED FAMILY

BRAIN DRAIN

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Pothole #4

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THE FAMILY IN THE FAMILY BUSINESS

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FAMILY IS A

WONDERFUL

PART OF A

BUSINESS -

EXCEPT IN THE

SALE TO

OUTSIDERS


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COMMON SITUATION:DAD IS PRESIDENT

MOM RUNS OFFICE/CSR

SON IS SHOP MANAGER

DAUGHTER SERVES AS

BOOKKEEPER

THESE ARE THE FOUR PEOPLE WHO HAVE

THE GREATEST CUSTOMER CONTACT

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COMMON SITUATION:WHEN DAD SELLS AND

LEAVES -

IS MOM GOING TO RETIRE

ALSO? WHO DOES SON OWE

LOYALTY TO?

WHAT ABOUT THEDAUGHTER?

IF THEY ALL LEAVE, WHO IS LEFT TO

OPERATE THE BUSINESS?


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COMMON SOLUTION:

REPLACE FAMILY MEMBERS

WITH OUTSIDERS IN THE

YEARS LEADING UP TO SALE

IN A MANNER THAT

ENHANCES THE BUSINESSAND WORKS FOR THE

FAMILY

IDENTIFY HOW AND WHEN TO

MAKE CHANGE

PLANT SEEDS EARLY

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Pothole #5

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TRENDS TELL A POWERFUL STORY

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0

2.5

5

7.5

10

2007 2008 2009 2010

FOUR COMPANY REVENUES


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0

7.5

15

22.5

30

2007 2008 2009 2010

BUYERS PAY MORE FORPOSITIVE TRENDS

Sales Gross margin Profits

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Improve sales focus andeffectiveness

Increase sales andmarketing

Add new sales channels

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BUYERS PAY MORE FOR

POSITIVE TRENDS

Gross profit

Net Income

TELL A POWERFUL STORY

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SUMMARY

1. Be Number 12. Create Sticky Customer Relationship3. Mitigate the Brain Drain

4. Minimize too much Family in the Business5. Build Positive Trends

If you do not change direction, you may end up where you are heading.Lau Tzu

Change takes time.

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AdditionalPothole

TopicsInclude

Real Estate Leases

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Quality of the

Financial Statements

Permits to Operate

Curb Appeal

Business Name

Do you Own the IP

Cash

Trusting the Inventory

Ratio Analysis

Investing in Tomorrow

To Patent or

Not to Patent

And Many More

If you are thinking of Selling and looking tomaximize value, Call Beacon Equity Advisors.

If you are looking to grow, or prepare to sell in

several years, Call Growth Strategy Partners:

Value Enhancement Analysis 3 day project identifying how to increaseenterprise value

Strategy Articulation Workshop 2 day workshop which results in designof strategic growth plan using best practice Balanced Scorecard framework

How Can We Help You?

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SMOOTHING THE ROAD HERE

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TO GET YOU HERE

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THIS HAS BEEN A PRESENTATION BYBEACON EQUITY ADVISORS AND GROWTH STRATEGY PARTNERS 2011

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potholes presentation 032111 final

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