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On Business Exits + Turnarounds

22nd July 1970 – a turning point in our family business

22nd July 1970 – a turning point in our family business

Why secure base leadership should precede succession plans in a family business. If you are involved in a family business (or like me, were) chances are you will relate to this story. My grandfather was larger than life, in every sense of the word – he tipped the scales at around 200 kgs in his prime. Aside from this imposing memory I still have of him, he was the glue that kept our large family and growing family business together. Without realising it at the time, he exhibited most (not all) of the qualities I have since studied in leadership…

Business owners – it’s time to put the ‘financial fish’ on the table

Business owners – it’s time to put the ‘financial fish’ on the table

How confident are you that your financials are in good order?   Sound financial management is a given for any business. You don’t need me telling you that it is the single most important foundation for a business that wants to prosper. It precedes everything! Trouble is as we discover time and time again in our work, the financial function for mid-sized private businesses, not usually subject to regular audits, is often letting down an otherwise good business. What is visible (operations) is in great shape – it’s what is not so visible that is a potential time bomb. Before…

Why a business turnaround succeeded on its 4th attempt

Why a business turnaround succeeded on its 4th attempt

The client (fictitiously named Pipes & Pumps) had tried at least 3 times to turnaround a core non-profitable division of their business. The message here is that a pure P&L – Balance Sheet approach to turning around a business, will not work. What is required in addition is a more human approach, as I have outlined below. We have found over countless turnaround projects that it is the soft stuff that is the hard stuff. Being human is as important as the technical aspects – for instance if there are redundancies involved then people will go through a grieving process like any other personal loss….

9 options to exit your business

9 options to exit your business

This instalment explores all exit options available to the owner of a business – and a case study to demonstrate the importance of getting it right. When we start the exit conversation with a business owner he invariably sees the sale of his business to a third party (aka a trade sale) as his only option. However, there are other options and the ultimate choice must be tailored to the owner’s personal objectives, especially where big sums are at stake. The morale is to explore your options carefully. Options other than a trade sale: Intergenerational transfer– once owners realise the downside of this option they often decide…

Vendor Delusion: the biggest hurdle to clear when acquiring a business

Vendor Delusion: the biggest hurdle to clear when acquiring a business

Research proves that the great majority of business owners delude themselves about how much their business is worth. 80% of businesses <$50M put on the market fail to sell – (Tom West, President Business Brokerage Press) And the single biggest reason for this is over-valuation by the vendor. If you are acquiring a business or about to do so, then this research has clear implications, as does the solution I am about to discuss. Unless you address this vendor delusion you may have to walk away from the deal. When this happens you are in what Steven Covey would have referred to as…

The one financial score every CEO and owner should know

The one financial score every CEO and owner should know

For many CEOs & business owners, financial accounting is not their forte. In the mid-tier market we operate in, clients are often more entrepreneur than accountant – as you would expect. They are focussed on doing what they do best, and do not have the luxury of time to dig deep into their financials. As a result, they place considerable trust in the competencies and bona fides of their internal CPA or bookkeeper. And to be fair, it is not unusual for a business to outgrow the capabilities of the bookkeeper who started when the company was working out of the garage. In…

Dream more, expect more and care more…

Dream more, expect more and care more…

“Dream more than others think practical. Expect more than others think possible. Care more than others think wise.” – Howard Schultz (Chairman and CEO Starbucks). This quote has resonated with me so much I have posted it front and centre where I can see it every day. I found it in George Kohlrieser’s excellent book on leadership which I am currently reading – Care to Dare. Let me explain why, one sentence at a time. Dream more than others think practical. For anyone who has been a participant in one of our problem solving workshops, the first worked exercise is on those…

Raising Capital to Fund Growth

Raising Capital to Fund Growth

How you can turn the tables on the investors   Banking colleagues and investor friends of mine often despair at how poorly businesses present when seeking capital – debt or equity.  Sometimes the business fails on the very basics such as a projected cash-flow. Back-of-the-envelope presentations no longer attract capital via investors or banks. A new & measured approach is now required. If you present a half-baked case you will struggle to raise capital. There is a better way. A client of mine recently presented to their bank a very clear and concise strategy. Integral to the strategy were metrics (KPIs). Each…

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