Case Study: Frustrated Business Owner…”I Just Want Out”

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      IT Provider

Business To Business

 

Client Situation – AT A GLANCE

 

A quick exit from business ownership is not the best way to maximize the return on your investment…

CHALLENGES:

  • 2 years of flat sales
  • Lack of direction and focus on growth of the business
  • Team members were competent, but not as productive as possible.
  • Significant health and family issues creating many distractions.

SOLUTIONS

  • Completed an evaluation of the business
  • Worked with the owner and team to establish a ‘Growth’ mentality
  • Adjusted compensation plan adjustment to provide above-average income to strong producers
  • Searched out potential buyers for the business.
  • Found resources for high margin hardware and software sales

RESULTS

  • Increased productivity of existing production team
  • Prepared the business financials for the rigors of buyers due diligence. Annual growth rates ranged from 23%- 57%
  • Found 2 interested buyers for the business
  • Increase Sales by 38% and Margin dollars by 42%
  • Increased the value of the business to 250% of initial expectations.

HERE’S THE STORY

Eight years of business ownership and the ongoing and daily frustrations of lack of employee productivity and accountability, some significant personal life and health issues all contributed to a frustration and ‘dark’ mindset that enveloped the owner and was impacting all the employees. “If I could just get someone to write me a check for $XXXXX I would sell in a minute.”

The business owner was a client of Advanced Business Coaching 5 years ago. After the initial 3-year time together the owner just wanted to implement the things we had developed. Since that time, most of the 3-5 year plan goals had been achieved. The owner had not done annual goal reviews and lost focus on what he wanted from the business.

In our most recent encounter, after a thorough Evaluation / Alignment with the business owner and team members, we were able to see a clear picture of the current situation and develop a 12-18 month plan to sell the business.

There were directions taken…

First—we established a Growth Culture within the existing team and adjusted compensation plan to reward profitable performance. This resulted in strong and profitable growth that added value to the business.

Second— we established a fair business valuation and outlined the owners acceptable terms of sale. As we went through the process of strengthening the balance sheet, and preparing the business for sale, we began selective solicitation of potential buyers. Over the next 4 months, we were able to connect with 2 interested and qualified buyers.

During the due diligence process of the potential buyers, the production team was able to implement a number of technology advances that improved information flow and increased productivity. Access to new sources for low-priced hardware and software, all with improved margins, allowed for additional sales to existing clients and improved margins for virtually every customer. The year ended with the business showing a 38% increase in revenue and a 42% increase in margin for the year. With the increasing profitability, the value of the business was positively impacted. The offer from the interested buyer was 250% more than what the owner wanted when we began the process of getting the business ready to sell. A great end to very busy year.

To your success,

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Michael Stelter

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