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Through the Fresnel Lense

Be Careful with Discretionary Expenses

Posted by David Humphrey on 8 December 2014 | Comments

What’s in it for me? From GE and HP to the local entrepreneur. Every buyer of every business asks: If I buy this business, take it over and run it well, what is in it for me?  While there are often many answers to this question depending on the individual business, one area of chief concern among all businesses is profitability. For many closely held businesses certain expenses, which are discretionary or unnecessary, even if totally legal, can obscure true profitability.

comment(s) | Read the full post

Beware of Brain Drain!

Posted by Jeff Muir on 4 November 2014 | Comments

"Brain drain" is the potential loss of institutional knowledge that occurs when the current owner and members of his team depart after the company is sold.    Diversifying the institutional knowledge among a wider group of employees and memorializing processes and procedures is important to prevent brain drain, both the perception and the reality.

comment(s) | Read the full post

Solidify Customer Relationships in the Years Before a Sale

Posted by David Humphrey on 7 October 2014 | Comments

When your customers think of your business, what do they think of?  It is your products; your service or a person at the company? When they buy from you, do they buy because you have better pricing, product breadth or because they like Mary their account rep?

comment(s) | Read the full post

How Does The Name of Your Business Impact The Sale of the Business?

Posted by Jeff Muir on 6 August 2014 | Comments

“What’s in a name?” In the event of a business sale, it can cause potential buyers to pass on the opportunity without serious consideration of the financials. Tom Brady and Sons may have spent twenty years building a reputation as the premier widget distributor in New England. While Tom hasn’t been active in the business for several years, customers still ask to speak to him or one of the sons when they have a concern. What will those customers think when Reliable Distribution takes over?

comment(s) | Read the full post

The Impact Your Brand has on Company Value

Posted by David Humphrey on 10 June 2014 | Comments

What is your company's image to the outside world?  This is much deeper than the slogan on the side of your truck or the mission statement in your lobby.  What do others with whom you interact think of your business? Think of Macy’s vs Neiman Marcus or Target vs. Wal-Mart – all four of these stores are in the same business – retail.  They all sell clothes.  But I am willing to bet they are all clearly different in your mind.  You probably have a very different expectation of the product and service you will encounter in those stores.

comment(s) | Read the full post

Could Your Business Become a Buggy Whip Factory?

Posted by Jeff Muir on 20 May 2014 | Comments

Fax machines, camera film, pay telephones, VCRs, CD players…the list of great products that are no longer part of our lives is extensive.  For each of these products, there are companies that evolved and survived and some that simply faded away.  3M began as the Minnesota Mining and Manufacturing Company.  The original enterprise was very successful in mining, now 3M is synonymous with post-it notes and innovation.

comment(s) | Read the full post

Enhancing Value: Managing Customer Concentration

Posted by David Humphrey on 24 April 2014 | Comments

As your doctor will tell you, everything in moderation is OK.  However, when there is too much of one thing, even the things that are good for you, problems can occur.  Too much revenue from  one or a small handful of customers can be too much of a good thing.

comment(s) | Read the full post

Enhancing Value: Create Quality Second Tier Management

Posted by Jeff Muir on 7 April 2014 | Comments

At inception an owner puts together a team of people to help the business move forward. Hiring is based on the company’s needs but also on what the business can afford at the time. Over time the business has success, growing from $1m in revenue to $5m and then to $10m. The company has different needs and different resources. The owner’s original team may no longer be optimal. A larger and more complex enterprise needs a more effective management team. It is no longer acceptable for the owner to be involved in every decision and have managers execute on the owner’s wishes.

comment(s) | Read the full post

Enhancing Value: Create Barriers to Entry

Posted by David Humphrey on 18 March 2014 | Comments

What stops someone else from competing with you?  Unless you are in the liquor store industry with limited licenses granted by the town fathers or have long term contracts with your customers, this question is a critical for most buyers.

comment(s) | Read the full post

Enhancing Value: Being #1

Posted by Jeff Muir on 4 March 2014 | Comments

Being a leader in your field is not only a feather in your cap, but also a key tool in the sale of your business.  Buyers want to buy a company they can brag about to their friends, their spouse and their former colleagues.  They want a company that is a leader in their market. 

comment(s) | Read the full post

Be Careful with Discretionary Expenses

Posted by David Humphrey on 8 December 2014 | Comments

What’s in it for me? From GE and HP to the local entrepreneur. Every buyer of every business asks: If I buy this business, take it over and run it well, what is in it for me?  While there are often many answers to this question depending on the individual business, one area of chief concern among all businesses is profitability. For many closely held businesses certain expenses, which are discretionary or unnecessary, even if totally legal, can obscure true profitability.

comment(s) | Read the full post

Beware of Brain Drain!

Posted by Jeff Muir on 4 November 2014 | Comments

"Brain drain" is the potential loss of institutional knowledge that occurs when the current owner and members of his team depart after the company is sold.    Diversifying the institutional knowledge among a wider group of employees and memorializing processes and procedures is important to prevent brain drain, both the perception and the reality.

comment(s) | Read the full post

Solidify Customer Relationships in the Years Before a Sale

Posted by David Humphrey on 7 October 2014 | Comments

When your customers think of your business, what do they think of?  It is your products; your service or a person at the company? When they buy from you, do they buy because you have better pricing, product breadth or because they like Mary their account rep?

comment(s) | Read the full post

How Does The Name of Your Business Impact The Sale of the Business?

Posted by Jeff Muir on 6 August 2014 | Comments

“What’s in a name?” In the event of a business sale, it can cause potential buyers to pass on the opportunity without serious consideration of the financials. Tom Brady and Sons may have spent twenty years building a reputation as the premier widget distributor in New England. While Tom hasn’t been active in the business for several years, customers still ask to speak to him or one of the sons when they have a concern. What will those customers think when Reliable Distribution takes over?

comment(s) | Read the full post

The Impact Your Brand has on Company Value

Posted by David Humphrey on 10 June 2014 | Comments

What is your company's image to the outside world?  This is much deeper than the slogan on the side of your truck or the mission statement in your lobby.  What do others with whom you interact think of your business? Think of Macy’s vs Neiman Marcus or Target vs. Wal-Mart – all four of these stores are in the same business – retail.  They all sell clothes.  But I am willing to bet they are all clearly different in your mind.  You probably have a very different expectation of the product and service you will encounter in those stores.

comment(s) | Read the full post

Could Your Business Become a Buggy Whip Factory?

Posted by Jeff Muir on 20 May 2014 | Comments

Fax machines, camera film, pay telephones, VCRs, CD players…the list of great products that are no longer part of our lives is extensive.  For each of these products, there are companies that evolved and survived and some that simply faded away.  3M began as the Minnesota Mining and Manufacturing Company.  The original enterprise was very successful in mining, now 3M is synonymous with post-it notes and innovation.

comment(s) | Read the full post

Enhancing Value: Managing Customer Concentration

Posted by David Humphrey on 24 April 2014 | Comments

As your doctor will tell you, everything in moderation is OK.  However, when there is too much of one thing, even the things that are good for you, problems can occur.  Too much revenue from  one or a small handful of customers can be too much of a good thing.

comment(s) | Read the full post

Enhancing Value: Create Quality Second Tier Management

Posted by Jeff Muir on 7 April 2014 | Comments

At inception an owner puts together a team of people to help the business move forward. Hiring is based on the company’s needs but also on what the business can afford at the time. Over time the business has success, growing from $1m in revenue to $5m and then to $10m. The company has different needs and different resources. The owner’s original team may no longer be optimal. A larger and more complex enterprise needs a more effective management team. It is no longer acceptable for the owner to be involved in every decision and have managers execute on the owner’s wishes.

comment(s) | Read the full post

Enhancing Value: Create Barriers to Entry

Posted by David Humphrey on 18 March 2014 | Comments

What stops someone else from competing with you?  Unless you are in the liquor store industry with limited licenses granted by the town fathers or have long term contracts with your customers, this question is a critical for most buyers.

comment(s) | Read the full post

Enhancing Value: Being #1

Posted by Jeff Muir on 4 March 2014 | Comments

Being a leader in your field is not only a feather in your cap, but also a key tool in the sale of your business.  Buyers want to buy a company they can brag about to their friends, their spouse and their former colleagues.  They want a company that is a leader in their market. 

comment(s) | Read the full post