CEO Advisor Newsletter January 2019
When is the Best Time to
Acquire for Growth
We recommend pursuing not-for-sale acquisitions. Companies that have not advertised themselves as potential acquisition candidates may have not even considered the option. The fact is every company is for sale, for the right price and terms, or the right situation. When a company is not-for-sale it simply means the owner is not currently considering selling, but they may be open to it if a sufficiently attractive offer is presented or the right fit presents itself. It's possible that up until now, they haven't found the right buyer, or simply have never really thought about selling as an option. If you only look at companies that are for sale, you drastically limit your options. And most CEOs and business owners are hesitant to start a sale process on their own, but are very open to being approached.
By being proactive you can search for a business that meets your ideal profile and fits in with your growth strategy rather than accepting whatever happens to be on the market. Engaging with an M&A advisor, such as CEO Advisor, Inc., is needed due to the time and expertise required.
Pursuing an acquisition starts with a carefully developed M&A strategy. This should complement your company's overall growth strategy. The most successful acquisitions aren't about cost-savings or financial engineering. They are about long-term growth and building shareholder value. Acquisitions can be one of the fastest ways to grow your business, and help you reach new markets and customers, and increase shareholder value substantially.
It usually takes from six to twelve months to develop your M&A strategy, create a step-by-step plan, identify the right companies and execute and close the deal. Keep this timeline in mind when you start thinking about a transaction. So if you're anticipating any challenges to your current or future growth, the time to start on your acquisition plan is not some future date when you run into an eager seller - it's today!
The key to initiating an acquisition effort is securing an M&A advisor, a trusted expert that will generate a plan, work with you to manage the entire process, seek out the proper acquisition, perform Due Diligence and advise you through to a successful closing.
CEO Advisor, Inc. has over three decades of mergers and acquisitions expertise and will efficiently and effectively accelerate the growth of your business through acquisitions.
Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. at (949) 629-2520, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.
Boost Growth & Profits in 2019
2. Sales GrowthGrowth is a must for every company to increase profits. Growth requires sales management, goals, planning and the creation of a sales and marketing machine. Target your top 100 prospects to optimize new business development. Also focus on your top customers to expand, upsell and cross-sell to maximize profits.
3. Gross and Net Profit Margins As a CEO focusing on profits, your Gross Profit Margin (GPM) (Sales less Cost of Goods Sold ( COGS)) is the primary financial metric to measure on a consistent basis. Make sure your financials are set up to track Revenue, COGS and GPM so you can determine what products and services generate the most money, as wells as, which products and services are subpar and need some changes, or to be discontinued. Target between 50 - 60% GPM to maximize Net Profits, higher GPM for software companies.
4. Cost of Goods Sold (COGS)COGS are the direct costs to provide your products and services, and helps you calculate how profitable your products and services are (before overhead expenses). Your Cost of Goods - materials, direct labor, outsourced contractors, customer service and other costs related to producing your products and services are critical to your Gross Profit Margin (GPM).
5. Motivate and Manage Your Team The energy in your workplace reflects the level of enthusiasm, urgency and intensity of focus as expressed by the people working in your company. You need people engaged. You need your staff to care. And you as the leader need to be responsible for energy and urgency in order to maximize your profit potential. This can be tracked by developing reporting and metrics and updating these reports monthly and real-time in some cases to hold your employees accountable and gauge your progress.
6. Company InnovationAre you constantly looking for ways to process orders quicker, create customer reports faster, save money by honing an internal procedure, and develop new products and services?
Company innovation is a global mindset in your company that is consistently improving how you do business. The impact of having your employees constantly innovating is a huge driver of profitability for any company. The key is to balance focus and execution versus innovation.
Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. at (949) 629-2520 or by email atMHartsell@CEOAdvisor.com for a no cost initial consultation.