(CLP) Programs

Appleton Greene corporate training programs are all process-driven. They are used as vehicles to implement tangible business processes within clients’ organizations, together with training, support and facilitation during the use of these processes. Corporate training programs are therefore implemented over a sustainable period of time, that is to say, between 1 year (incorporating 12 monthly workshops), and 4 years (incorporating 48 monthly workshops). Your program information guide will specify how long each program takes to complete. Each monthly workshop takes 6 hours to implement and can be undertaken either on the client’s premises, an Appleton Greene serviced office, or online via the internet. This enables clients to implement each part of their business process, before moving onto the next stage of the program and enables employees to plan their study time around their current work commitments. The result is far greater program benefit, over a more sustainable period of time and a significantly improved return on investment.

Appleton Greene uses standard and bespoke corporate training programs as vessels to transfer business process improvement knowledge into the heart of our clients’ organizations. Each individual program focuses upon the implementation of a specific business process, which enables clients to easily quantify their return on investment. There are hundreds of established Appleton Greene corporate training products now available to clients within customer services, e-business, finance, globalization, human resources, information technology, legal, management, marketing and production. It does not matter whether a client’s employees are located within one office, or an unlimited number of international offices, we can still bring them together to learn and implement specific business processes collectively. Our approach to global localization enables us to provide clients with a truly international service with that all important personal touch. Appleton Greene corporate training programs can be provided virtually or locally and they are all unique in that they individually focus upon a specific business function. All (CLP) programs are implemented over a sustainable period of time, usually between 1-4 years, incorporating 12-48 monthly workshops and professional support is consistently provided during this time by qualified learning providers and where appropriate, by Accredited Consultants.

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Executive summary

Business Transitions

Mr. Sussman developed the Business Transitions consulting process to help owners of small and medium size businesses improve and enhance the value of their companies. This process is now the Business Transitions Program for Value Building.

Business Transitions is the culmination of Mr. Sussman’s years of practical experience in the Corporate environment; where he worked in Finance, Strategic and Operations management positions; the small to mid-size enterprise environment; where he founded, financed, operated and exited via sale transactions five different companies (2 to public companies, 2 to strategic acquirers, and 1 turnaround and sale in a private transaction); and as an investment banker, where he has acted as an M&A advisor on numerous sale, capital raises, recapitalizations and joint venture transactions. Throughout this journey, Mr. Sussman has frequently encountered good businesses, where the owners, stakeholders and management are unable or unwilling to exit or raise capital because the value of their business is not what they need it to be, in order to take that next step. Business Transitions for Value Building addresses this issue.

Business Transitions begins with an assessment of where the business is today, both internally and externally on the value scale. The next step is working through each area of the value chain and for each; putting in place the plans, operations, systems, processes, procedures and controls to improve and enhance performance, efficiency, revenue and earnings growth, and corresponding increases in free cash flow or EBITDA. EBITDA, Earnings before interest, taxes, depreciation and amortization is the key measure of business valuation, thus it is also the key measure for Value Building. For most every business, whether the purpose is to raise capital, growth through acquisitions, or a liquidity event; the greater the EBITDA and the more sustained the EBITDA growth, the greater the value of that company.

Business Transitions for Value Building is a corporate training program that effects, and drives change throughout a company. Throughout the company is important to keep top of mind. Over the course of this training program, the key aspects of your business that power its stability and current state will be analyzed, reviewed and effected with the common goal of building the value of the company.

The root cause of why most training programs designed to drive meaningful change throughout a company are unsuccessful is the that the focus is on the wrong areas and thus, the training itself is not appropriately focused and therefore frequently does not involve the relevant employees. Owners who want to drive improvement and build value within their company must implement training that addresses their business as an entire entity and focus on the key items that drive value. This limitation is addressed with Business Transitions.

Business Transitions is all about organizing and operating a company with a view towards the future goal and that future goal can take many forms; organic growth, growth via acquisitions, sale, pass to the next generation, semi-retirement or full retirement. Value Building is essential for each.

Organic Growth: Capital is generated by the business via increased sales or reducing expenses, or a combination thereof. In today’s fast paced, competitive business world it can be challenging to readily increase sales, but it is possible with discipline and, a proven and repeatable sales process. On the expense side, a strategy of pure cost cutting may have a meaningful impact in the year implemented, however, it is not a process with meaningful year over year improved results. A meaningful process for expense reduction is operational processes that are designed with the most efficient operation for sustainable operations.

Acquisitive Growth: Acquisitive growth with cash or equity. If cash, the cash must have been generated by the company or obtained from a third party. If the cash is raised via debt, the lender will evaluate the loan based upon the value of the underlying assets of the combined entity and the ability to repay the debt out of future cash flow. If equity is to be utilized value continues to be key. The greater the value of the company, the less equity the company will have to provide to the company being purchased or to a third party to raise the required cash.

Sales and Recapitalizations: Sales and recapitalizations of the company is the exchange of company for consideration such as; cash or equity in another company. Sales can be total sales, or majority or minority recapitalizations. A majority recapitalization is where a third-party purchases 51% or more of the company, while a minority recapitalization is the purchase of less than 50% of the company. In each case, value of the company is key. Company value determines the amount of consideration to be received, which in turn determines the next step in the owner’s life; exiting or remaining and continuing to manage the business. Owners frequently exit and move to the next phase in their life with a total sale. In a majority or minority recapitalization, owners typically remain with the company, execute a growth plan with the new majority or minority owner and then sell their remaining equity at hopefully greater value in the future. This is frequently referred to as “having a second bite at the apple.” Essentially what the third party knows and expects when making the recapitalization investment is that they will be able to successfully implement their version of a building value and increase the value of the company substantially to achieve their intended financial return on investment.

Pass Business to the Next Generation: Many times businesses are transitioned from one generation to the next. Unfortunately, historical statistical data shows that 70% of these businesses fail when passing from the first generation to the 2nd and 90% fail when passing from the second to the third. This is not a desirable outcome. The cause? Most frequently is the lack of proper planning, structure and organization of the business. The current business does well for the owners, but the structure, people, processes and the like are not in place to sustain the business. These are all essential elements for Business Transitions and all, if in place, significantly build value of the business.

Business Transitions provides options for company owners to take control of their business and generate the greatest return on their own efforts.

The outlook for improving business valuations remains very strong and will continue to grow into the future. For the most part, buyers and investors buy earnings. And strong and increasing earnings drive value. Thus, there is no doubt that building value is as much the future as it is the current, and the past.

Based upon demographics, it is safe to estimate that 12 million +/- businesses are owned by baby boomers and will be sold or transitioned in some method over the next 10 to 15 years due to retirement or other factors. Many owners of these businesses face the uncertain dilemma of their business not being valuable enough in a transaction that enough cash proceeds will remain after taxes to support the lifestyle to which they have become accustomed. Thus, building value today is essential for their future.

Similarly, although not as large a number, almost 8000 businesses are owned or backed by private equity in the US. The typical private equity firm has a time frame on the holding period for their investments due to maturity dates of their investment funds. This means that within their holding period, typically 5 – 7 years, the value of the businesses they own must increase. Only by increasing value of those businesses is the private equity fund able to sell that business at a multiple that represents a sale price enough greater than the purchase price and investment over time to provide their target return to their investors. Private equity funds that do not provide adequate returns to their investors have difficult times raising subsequent funds.

Finally, public companies also focus on earnings. Share prices represent multiples of earnings. The greater the earnings, the greater the share price and correspondingly the value of the company. Overall, building value is the central key to success for all businesses, from the smallest to the largest. Greater values, driven by increasing EBITDA is the key to increasing equity for the owners and other stakeholders of all businesses. With increased value, it provides the flexibility and ability of companies to drive their own futures in a way that meets the needs of the owners and stakeholders in the business.

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Curriculum

Business Transitions – Part 1- Year 1

1. Part 1 Month 1 Business Evaluation
2. Part 1 Month 2 Financial Performance
3. Part 1 Month 3 KPI Dashboard
4. Part 1 Month 4 Abdicate Delegate
5. Part 1 Month 5 Systems Processes
6. Part 1 Month 6 Growth Potential
7. Part 1 Month 7 PRSP
8. Part 1 Month 8 Neutrality Structure
9. Part 1 Month 9 Cash Generation
10. Part 1 Month 10 Recurring Revenue
11. Part 1 Month 11 Defensible Position
12. Part 1 Month 12 Customer Satisfaction

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Business Transitions – Part 2- Year 2

1. Part 2 Month 1 People Plan
2. Part 2 Month 2 Operating System
3. Part 2 Month 3 Testing 123
4. Part 2 Month 4 Due Diligence
5. Part 2 Month 5 Transitions Preparations
6. Part 2 Month 6 Transitions Finalization

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Program Objectives

The following list represents the Key Program Objectives (KPO) for the Appleton Greene Business Transitions corporate training program.

Business Transitions – Part 1- Year 1

1. Part 1 Month 1 Business Evaluation – Business Transitions is a forward-looking program designed to build value for the next evolution of the business. Business Transitions begins with establishment of a baseline for where the business is today. Business Transitions are affected by the value of the business viewed by industry standards and balanced against the perceptions, desires and needs of the owners and stakeholders of the Company itself. To accomplish this, a suite of tools will be utilized. In this session, we will be introduced to, and learn each tool for use and application throughout the Business Transitions program. These tools are; Porter’s Five Forces, SWOT, 5 Whys: Root Cause Analysis, VMOST Analysis and Pareto Principle. Each of these tools will facilitate analysis into each area and identify areas and create a roadmap for improvement and change to build value. Porter’s Five Forces: Porter’s Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine strengths and weaknesses. Five Forces analysis is frequently used to determine corporate strategy and can be applied to a whole business or portion of a business to understand competition and position a business for success. SWOT (Strengths, Weaknesses, Opportunities, Threats): The primary objective of a SWOT analysis is to help organizations develop a full awareness of all the factors involved in making a business decision. 5 Whys: Root Cause Analysis: Part of the Lean management system, is an effective technique for to find the root cause of any problem and then build a solution to protect the process from the reoccurrence of that problem. VMOST Analysis Model: VMOST analysis, also known as MOST analysis, is a framework and evaluation technique for organizational strategic planning; while also being very effective for application to departments or business functions. VMOST analysis aligns goals, objectives and process throughout the entire organization with that of the entire business. In addition to the vision (V) and mission statement (M) elements, the components of the acronym VMOST are: objectives, strategies and tactics. Pareto Principle: This principle is based on the theory that 80% of outcomes, both positive and negative, result from 20% of the inputs. Applying this principle and looking at the collected data in a Pareto chart provides an excellent visual for areas of focus and potential improvement. These tools and techniques, along with other evaluation and measurement tools to be introduced, will be applied throughout the Business Transitions program.
2. Part 1 Month 2 Financial Performance – The objective of this module is learning the language of financial statements. Reading and understanding financial statements goes well beyond gross profit, net profit, assets and liabilities. Once the language is understood, our focus will be on reading, understanding the company’s financial position today and looking forward into the future. Value will be looked at from the prospective of both financial and strategic third parties. Financial parties value your company’s future profits stream, i.e., the likelihood of those profits continuing. By contrast, a strategic party estimates the value of your company in their hands. The math a strategic party does starts with estimating the financial performance of your company when added to their existing business, i.e., the accreted earnings performance. This is looked at as both your company remaining independent and fully integrated into their platform. In each case, factors including market share, sales revenue, margins, proprietary products, earnings, cash flow, management, people, suppliers, future outlooks and many other factors are considered. Thus, a baseline for all value drivers must be established. The results of this analysis will set the baseline for improvement over the course of Business Transitions. To accomplish this evaluation, our first look will be from a financial statement and financial ratio analysis. We will focus on the reading and understanding of financial statement and how the income statement and balance sheet fully interact and ultimately generate the statement of cash flows. A good understanding of the numbers is essential for decision making during the program and measurement of progress throughout and after the program. Once a good understanding of reading and working with financial statements is in place, the objective will then be methods and techniques for development and implementation of financial controls. Financial controls include; financial analytics, checks and balances, approval and signing authorities and reporting systems, both historical, current and forward looking.
3. Part 1 Month 3 KPI Dashboard – The objective in this module will be to understand Key Performance Indicators (“KPIs”); what they are, how to design, measure and report them and how to apply them for managing the business. Using KPIs will start the transition from past tense decision making to forward looking decision making. KPIs also become the basis for management to keep their primary focus on the business versus in the details of the business. This is an essential mindset to be learned and adopted to build value and move towards the business transition. After the process is learned, KPIs will be established and the methods for how those KPIs will be measured and the frequency and timing of data collection and measurement will be defined. Finally, a method for reporting on the KPIs will be established. Reporting is most often done via dashboard. We will explore dashboards, their strengths, weaknesses and uses. Ongoing assignments will be for the development of KPIs for the business, building the dashboard and applying the information on a continuous basis for key decisions.
4. Part 1 Month 4 Abdicate Delegate – The objective of this module is to learn and apply techniques for effective delegation. To build value and prepare for an effective Business Transition, successful delegation is an absolute essential. Building upon KPIs for the ability to manage, we will explore techniqu