Acuity Mergers + Acquisitions helps business owners grow their business value in preparation for anticipated business transitions. While specific strategies and tactics are unique to each business, the process of value building is common to all businesses.
Step One: Negotiate Terms of the Assignment
The process begins with the advisor and business owner(s) discussing the goals and objectives of the business and the timeline for completion. This discussion helps the advisor understand the scope of the project and helps the business owner(s) clearly articulate what they hope to accomplish.
Once the goal and scope of the project is determined, the advisor quotes a fee based on the time and resources required for project execution. Other appropriate terms of the relationship between the business owner(s) and the advisor are also negotiated at this time. This step ends with the execution of a consulting agreement between the business owner(s) and the advisor.
Step Two: Identify Opportunities and Obstacles
The next step is for the advisor to guide the business owner(s) through appropriate brainstorming and analytical exercises in order to identify the opportunities and obstacles inherent in the project. Whether using a meeting management method or performing a standard SWOT analysis, the advisor serves as an objective third party to guide the business owner(s) through an honest and comprehensive evaluation of their business and what stands between today’s reality and tomorrow’s potential.
Step Three: Develop a One-Year Plan
With the opportunities and obstacles identified and evaluated, this step involves creating an executable plan. Developing a strategic or tactical plan does no good if it is never put into action. This step forces every plan component to be designed for implementation.
Acuity Mergers + Acquisitions utilizes the 4DX planning approach presented in The Four Disciplines of Execution by the Covey Group. The 4DX approach requires the plan to address each of four disciplines that make the plan much easier to execute, from initial implementation through project completion. We keep each value-building plan limited to one year so that the progress and ultimate success of the plan is more immediately apparent. We then regroup with the client at the end of each year to either form a new one-year plan or prepare for a business transition.
Step Four: Implement the One-Year Plan
The fourth discipline in the 4DX approach is to maintain a cadence of accountability. During this step, the advisor meets with the business owner(s) regularly to track progress and discuss any needed adjustments or modifications to the plan. Typically, these meetings will occur monthly, though different businesses require different accountability schedules.
During this step, the advisor serves as an objective third party on accountability for the business owner(s). While owners are well situated to hold their management and other employees accountable for functions required by the plan, there is often no one inside the business in a place to provide truly honest and candid accountability and feedback to the owner(s). The advisor is able to initiate conversations and offer observations that those inside the business are unable or unwilling to discuss openly.
In business, results are ultimately measured by the bottom line. At the end of each one-year plan, the key measure of success or failure is the presence or absence of growth in the value of the business. This usually involves growth in revenue and earnings, but in some cases it involves significant capital investment, key hires, human resource development and other nonrevenue items that may actually diminish profitability in the short term in order to build business value in the long term.