A GPS for Your Company:
The Value Opportunity Profile©
Boyer & Ritter genuinely going beyond the numbers!
It is a fact that most private company owners are not aware of the impact of company-specific risk on the value of their businesses. When they are faced with a need to increase the value of their businesses in order to close a value gap, they typically only focus on growing sales, reducing costs, or making an acquisition.
None of those strategies are the most effective initial way to increase value.
It’s a pattern that is replicated across the U.S. every day. Business owners, excited about the prospect of selling their businesses and moving on to their next phases of life, are confronted by the stark realization that their business values are nowhere near what they expected, or what they need to finance their desired future lifestyles. They face a value gap and, in determining how to close it, they often choose the wrong path, right from the outset.
At Boyer & Ritter, we want to help our clients adopt measures to reduce company-specific risk in the best initial way to achieve sustainable growth and maximize enterprise value. But without a assessing your company’s risks and opportunities, you could easily band aid problems without achieving the desired results. Doing so, you may never truly resolve the root causes that hold your business back from desired success.
Boyer & Ritter recognizes the need to help our clients grow in this very complex and competitive business environment. We also accept that the majority of our clients will soon begin thinking about, or planning, their transition strategy to sell, transfer ownership or review other options to capitalize on their hard work of building a business.
Whichever the current and long term goals, a business that is stronger, better aligned and balanced, and positioned for growth will have a great opportunity for success.
WHY should our clients care about maximizing value? In planning for the future and eventual decision to transition out of your business, today’s M&A market place provides statistics that are not so optimistic. According to the Alliance of Merger & Acquisition Advisors as well as the Pepperdine Private Capital Market Research Project:
- more than 80% of business owners who approach M&A advisors to go to market are turned away because their business is not market ready
- Of the 20% that go to market, 40% will fail at the transaction table
- Only 7% of businesses sell at or above valuation.
WHY does this seem so dismal and what don’t I understand? The answers lie within the operations of the organization. There is a large gap in the expectation of value between a buyer and seller. Buyers look at bottom line numbers, however, their focus is on WHAT they are buying. Sustainable growth and access to capital are also impacted by related issues.
WHAT could be the problems? Acquirers of businesses, and/or successful transfer of ownership internally, or even positioning your business for sustainable profitable growth, have very parallel fundamentals for success or failure within key operating areas:
- Strength, strategy of business operations, competition, and target market PLANNING
- Depth, strength and experience of LEADERSHIP
- Strategy, strength of team, operations and customer base in SALES
- Strategy, strength of team, positioning, branding and financial resources of MARKETING
- Structure, strategy and the continuous learning, incentives & scalability of PEOPLE
- Strategy, strength of team, supply chain, quality, efficiency & scalability of OPERATIONS
- Strategy, strength of team, sustainability, IT, and risk management of FINANCE
- IP, Contracts, agreements, filings, licenses and disclosures of LEGAL
Within those operating areas are typical DUE DILIGENCE ISSUES that cause business values to be depressed, acquirers to back away from making an acquisition or setting up a business transfer for failure.Within those operating areas, underdeveloped operations, misalignment and imbalance cause obstruction of growth, lower than expected profits, inability to make acquisitions, and lowers probability of accessing growth capital.WHAT are the next steps and HOW do I understand my current state of development? Boyer & Ritter has implemented a new service approach that reviews the qualitative operations that drive your financial results. Our process, the Value Opportunity Profile© (VOP) delivers a very comprehensive, credible and accurate review of your business. We will uncover:
- An overall Quality profile that represents the level to which the overall Company, or any particular area of the Company, is fully-developed and effectively functioning.
- An overall Risk Profile which provides insight to the Company as to how a prospective buyer, lender or investor would likely view the Company at its present state of development.
- A calculation of the Company’s Intrinsic Value and associated dashboard that demonstrates how the identified risk, misalignment, imbalance and inefficiency is impacting the organizations value.
Creating your company’s Roadmap, the Value Opportunity to Increase Enterprise Value
Armed with the information gathered through the VOP analysis, we work with you to create a roadmap to maximizing value based on a three stage plan over a period of time:
- Level 1 to PROTECT the company from risks that can threaten company viability.
- Level 2 to ENHANCE the company’s existing core operations.
- Level 3 to POSITION the company for long-term, sustainable, profitable, growth.
Schedule a Consultation today
If your firm or organization requires help from a professional financial advisory firm, Boyer & Ritter would love to work with you. For more information about the leading financial consulting firm in the Harrisburg, Carlisle, Chambersburg, State College, and Camp Hill region, or if you would like to schedule a consultation, call our team to receive the personal attention you deserve.