Growth and Transition Services

Growth

Are you troubled by the growth of your company?

Solid Oak Consulting helps companies at each of three critical stages in the corporate lifecycle. In the early, formative stage, growth is often seen as critical for survival. In mid-life, many companies struggle to keep growth going and do not know why what worked in the past no longer works. In late life, owners may look for a growth spurt to better position the company for sale or other transition.

Formative Stage Growth

In the formative stage of a company's life, the owner often takes the position that more sales will solve all problems. But there is a lot more to it than that. Attention must be paid to establishing long-term customer or client relationships; development of a strong executive team; establishment of repeatable processes for all the key management systems; refinement of the product or service line; establishment of a process for quality management, just to name a few. Solid Oak Consulting has worked through these issues with many formative stage companies.

Mid-life Growth

What do you do when what worked in the past no longer works? Many owners just try harder with more of the same. This is a recipe for frustration and even decline. Even if great new ideas are identified or new processes planned, these are often difficult to implement successfully because of the natural tendency for people to resist change. Solid Oak Consulting can help the owner break these constraints to mid-life growth.

Transition or Exit Strategy

If you are an owner contemplating a transition of the company to another family member or a third party, you face many decisions, which if faced sooner than later, can lead to success rather than failure in the transition.

Are you losing sleep because you are concerned the value of your business will not be enough to support you when you are ready to retire?

Are you concerned that most small businesses are not saleable at the time the owner chooses to transition?

Recent studies of small and medium sized private businesses in the US show that 85% of the business owners have no exit strategy. Further, these owners have 75% of their net worth tied up in their businesses.

Unfortunately, most business owners sell or try to sell their business to another Owner-Operator, which means that even if they are able to sell, they leave considerable money on the table. They do not realize there are other buyers who will often pay a premium for the business.

Prior to an effort to sell, many owners will pay for a valuation, but fail to understand that the traditional valuation does not represent what a buyer will pay. The value of a business to a buyer isn’t the cash flow, profit or assets. It is the probability and the reasons to expect certain cash flows or profits into the future.

In large companies, key investment decisions are made based on how the investment will affect Shareholder Value. Small business owners can do the same by paying attention to Owner Value. Having a clear picture of Owner Value and the forces influencing that value is critical.

The Alternative: A BizMach based BEST GTS Evaluation

A BEST GTS Report is a “physical exam” for companies. The results will identify both value drivers and value detractors. Business Value is a function of economic return and whether one can expect that return to continue or increase in the future.

A BEST GTS evaluation is designed for business owners who would like to grow or fix the company prior to sale whether that sale is planned for one year or ten years out.

The BEST GTS Report analyzes the company’s Strengths, Weaknesses, Opportunities and Threats (SWOT) and makes specific strategy recommendations to increase the company’s value. It also identifies a Capitalization Multiple from which the current and potential value of the company is calculated.

The first question to be answered by the BEST GTS Report is whether or not the company is saleable. It then identifies areas where improvement will positively impact the company’s value.

How Solid Oak Can Help Your Business

Starting with a BEST GTS evaluation and report, Solid Oak works with the business owner to develop a specific strategy to increase business value. Solid Oak then works closely with the owner to implement the strategy.

Increasing a company’s value is a team effort. In addition to the owner and key employees, Solid Oak works closely with the company’s CPA, bank and legal resources. If additional resources are needed in any of these areas, Solid Oak’s affiliation network can help supplement.

Solid Oak cannot help every business ­ the key factor is the level of the owner’s commitment to growth and change.

4 Types of Transition Ready Companies

  • Mature industry companies
  • Growth industry companies
  • Emerging industry companies
  • Declining industry companies

Competitive Forces

  • Barriers To Entry
  • Threat of Substitute Product
  • Bargaining Power of Suppliers
  • Bargaining Power of Buyers
  • Competitive Rivalry Among Peers

Common Issues and Corrective Measures

  • Differentiation
  • Buyer-Supplier Pricing
  • Fragmentation Strategies
  • Integration
  • Capacity Enhancement
  • Mobility Barriers Pre-Emptive Maneuvers
  • Life-Cycles
  • Acquisition as a Growth Strategy

For a free initial meeting contact Tom Long at telong@SolidOakConsulting.com.


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