(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 techniques to delegate work effectively and successfully. We will explore several techniques and methodologies proven successful over time: 98/2 Delegation: The process of identify the 2% of work that management must do, because it cannot be delegated and requires their personal input; Discover your Picasso Work: An alternate method of identifying the unique value-add that key management possess and must personally apply to create that value; Four Quadrant Analysis: An analytical process to categorize tasks for levels of delegation possible. Having learned these techniques, the next goal will be to perform this analysis at appropriate management levels within the business. Delegation is a continuous process that should be reviewed and reimplemented on a regular basis. To build value and position for the business transition, management must constantly be focused on spending their time on the work that consistently adds the greatest value to the business.
5. Part 1 Month 5 Systems Processes – The objective of this module is to measure the extent to which the business is run by processes or by people and to then effectively understand how to build processes, define policies and implement them within the business. To build value and position for a Business Transition, the business should be structured as much as possible, so that processes run the business and people operate processes. This is done through the implementation of effective business processes, also referred to as systems. Borrowing an acronym from the franchise industry, an industry built on processes or a system; System is an acronym for Save Yourself Time Energy & Money. This module will focus on learning to develop, implement and operate systems, processes, procedures and policies for the business. Business owners and management often create a hub and spoke organization, with them at the hub. What this means is that all decisions flow into and out of the hub, and management becomes the bottleneck in the business. Our objective is to learn how to effectively stop this and transform into a process driven organization. As part of our learning process, we will explore various process driven techniques, including; Lean, Kaizen, Kanban and more scaled down, simple to implement solutions. Our objective being to obtain meaningful results within an easy to learn and implement framework. From there, management will define and document the processes in the business as they exist and the apply the various techniques to look for improvement within those processes on a continuous basis.
6. Part 1 Month 6 Growth Potential – In this module we will look at growth potential. Businesses with greatest growth potential have the highest value. Business growth will be measured across all relevant aspects; customers, markets, products, people, longevity, market share sales revenue, margins and net income. Each of these will be further analyzed to determine level of performance and opportunities for improvement. Opportunities for growth will also be explored; geographic – are there new markets available? Vertically – can existing capacity effectively handle more customers? Horizontally – are there other products or services that could be added to the company’s offering to increase overall value? Key questions and areas to explore: Can the business be replicated in additional geographic locations and would performance be similar or superior? What other products or services would your customers buy from you? What adjustments would be necessary to handle 10x current volumes? Would new marketing channels allow the business to reach a new customer group? Would a self-service model or other method allow smaller customers to be profitably serviced? Is it possible to create a license strategy? Where and how would $5,000,000 be invested to add the most growth and profitability to the business? Based upon the analysis, alternative proposals for durable growth will be developed. The alternatives will be vetted using one or more of the analysis techniques. Based on that analysis the growth plan will be established. This plan will include goals, objectives, a project plan with timeline and budget. As part of the planning process, we will also develop processes, procedures and policies; training, KPIs, financial controls and reporting. The plan will establish the structure for continuous measurement and evaluation of this project to be used throughout Business Transitions and by the business going forward.
7. Part 1 Month 7 PRSP – In this module learn to develop a Proven and Repeatable Sales Process or PRSP. Sales and topline revenue growth are key to building value. The important aspect is to not only understand that sales is a process, but to define the process that not only generates revenue growth, but to then implement that process so that it is repeatable. Repeatability is essential for accurate planning, budgeting and forecasting. The PRSP plan will include goals, objectives, a project plan with timeline and budget. As part of the planning process, we will also develop processes, procedures and policies; training, KPIs, financial controls and reporting. The plan will establish the structure for continuous measurement and evaluation of this project to be used throughout Business Transitions and by the business going forward.
8. Part 1 Month 8 Neutrality Structure – In this module we will analyze the dependence of the business on suppliers, employees and customer concentration. Maximizing business value for a Business Transition requires that the business not be overly reliant on any one customer, employee or supplier. Suppliers: If a business is dependent on one or two key suppliers then the business is at their mercy. Cultivating several suppliers positions the business to never be dependent on anyone supplier. Diversifying suppliers, even at the cost of losing some special pricing discounts is essential for building value. Supplier diversity is more valuable in the long run than saving a little money currently. Employees: If the business is too reliant on any one employee, there is significant risk if that employee chooses to leave and at a disadvantage when it comes to negotiating compensation. Customers: If the business is too dependent on any one customer, the business will be highly unstable with the loss of that customer. A stable customer base requires diversification, typically no single customer represent more than 15% of total revenue. As we work through the neutrality analysis, we will consider the following factors: Rank your employees from easiest to most difficult to replace. Create a plan to become less dependent on the hardest to replace; How could you create a bench of potential hires for key roles in the event of an employee defection? Identify your most important raw materials. What other companies could supply them? How could you achieve the same or superior pricing and terms from an alternate supplier? Rank your customers by the percentage of your overall revenue each represents. How can sales be increased to smaller customers or how would additional customers be secured to lessen customer concentration? Based upon the analysis, alternative proposals for reducing and hopefully eliminating dependence and creating a valuable neutral position for the company. Based on the analysis the various diversification plans will be vetted using one or more of the analysis techniques and the diversification plan will be established. This plan will include goals, objectives, a project plan with timeline and budget. As part of the planning process, we will also develop processes, procedures and policies; training, KPIs, financial controls and reporting. The plan will establish the structure for continuous measurement and evaluation of this project to be used throughout Business Transitions and by the business going forward.
9. Part 1 Month 9 Cash Generation – The objective of this module is to understand the ability of the business to generate cash. Cash flow, gross margin and profitability have great effect on the value of your company. The more cash required to be injected by a third party into a business, the lower the value. The inverse is also true: the less cash required from a third party, the greater the value. A value driving goal should be to create a business that accumulates cash as it grows. One way to do this is to create a positive cash-flow cycle, i.e., collecting payment sooner from customers while at the same time lengthening time to pay suppliers and expenses. In this section we will analyze the businesses’ billing and collection practices to gain a full understanding of the company’s cash cycle. Installment billing. Is it possible to front end loan the amounts billed and collected? Is a subscription or membership model possible? What changes in the current business model would be required? Turn a service into a product. Is it possible? What would be required? Inventory. Is just in time a possibility versus stocking and carrying inventory? How could levels be reduced? Is it possible to change payment terms on carried inventory, delaying payment until usage? We will look for method and practices to improve the cash cycle as well and then analyze the proposed changes with one or more of the analysis techniques. Based upon the analysis, alternative proposals for positive cash generation will be developed. These alternatives will be vetted using one or more of the analysis techniques. Based on that analysis a plan for cash cycle improvement will be established. This plan will include goals, objectives, a project plan with timeline and budget. As part of the planning process, we will also develop processes, procedures and policies; training, KPIs, financial controls and reporting. The plan will establish the structure for continuous measurement and evaluation of this project to be used throughout Business Transitions and by the business going forward.
10. Part 1 Month 10 Recurring Revenue – In this module our focus will be on the power of recurring revenue. Having a predictable, recurring revenue stream is one of the largest builders of value for any business. Next most is reoccurring revenue followed by one time sale revenue. Our objective will be to identify the types of revenue currently existing within the business and to then understand and identify methods to create or transform existing revenue streams into higher value revenue streams to build value. Opportunities for recurring revenue include, but are not limited to; consumables, subscriptions and contracts. There are variations on each, but those are the primary categories. Regardless of the method and regardless whether the recurring revenue is within the company or adjacent to the company; recurring revenue builds value by: Increased lifetime customer value; Smoothing out demand; Reduced market research cost; Less receivables and increased cash flow; Customer retention. As we analyze this section, we will consider: How could revenue streams be moved up the value building hierarchy? Could a consumable element be added to what is sold? How could customers be engaged in a long-term contract? Would some customers prefer to be billed automatically over manually submitting a regular payment? Could a maintenance contract be added to the sale? Based upon the analysis, alternative proposals for creating recurring revenue will be developed. These alternatives will be vetted using one or more of the analysis techniques. Based on that analysis a plan will be established. This plan will include goals, objectives, a project plan with timeline and budget. As part of the planning process, we will also develop processes, procedures and policies; training, KPIs, financial controls and reporting. The plan will establish the structure for continuous measurement and evaluation of this project to be used throughout Business Transitions and by the business going forward.
11. Part 1 Month 11 Defensible Position – The objective of this module is to understand and implement methods to create defensible business positions. Warren Buffett is famous for investing in companies with a protective “moat” around them. The deeper and wider the moat, the harder it is for competitors to compete. In addition, an enduring competitive advantage also gives the business more control over pricing, which increases both profitability and cash flow. Having a defensible position builds value. In order to maximize value, commit to a product, service, or a bundle that does one thing well. The objecting being to identify and build an offering so irresistible that it builds value for the business. To build value, analysis will be performed to focus limited business resources on becoming excellent in the company’s niche and build value. Is there a layer of service that could be added to differentiate the offering? How can products and services be better branded? What is the one thing that customers care most about? What is unique about the business? How can the business capitalize on that quality? If you can’t identify something unique about your offering, examine what your competitors are doing and what consumers aren’t yet getting from any source, and weigh the benefits of offering it. Based upon the analysis, alternative proposals for creating defensible positions will be developed. These alternatives will be vetted using one or more of the analysis techniques. Based on that analysis a plan will be established. This plan will include goals, objectives, a project plan with timeline and budget. As part of the planning process, we will also develop processes, procedures and policies; training, KPIs, financial controls and reporting. The plan will establish the structure for continuous measurement and evaluation of this project to be used throughout Business Transitions and by the business going forward.
12. Part 1 Month 12 Customer Satisfaction – TThe objective of this module we will be measurement and improvement of Customer Satisfaction. This attribute measures both the extent to which your customers are satisfied and your ability to assess customer satisfaction in a consistent and rigorous way. Being able to objectively measure the satisfaction level of your customers is essential to maintaining customer loyalty and building both repeat and referral business. The Net Promotor Score (“NPS”) methodology, based around asking customers a single question that is predictive of both repurchase and referral, has been proven to be the most effective measure of customer satisfaction. In this session, we will study the NPS, develop our question and create our NPS survey and run a project to survey customers of the company. The main reasons for use of NPS, beyond its proven reliability are; it’s easy, it is common language for third parties and it is predictive. Beyond the initial survey, we will develop a methodology to continuously measure customer satisfaction and benchmark future performance against past performance.

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Business Transitions – Part 2- Year 2

1. Part 2 Month 1 People Plan – The objective of this module is understanding organization structure, roles in the structure and people in the roles. Great companies have great people. As important as it is to have great people, it equally important to have the right people in the right roles doing the right job where their performance and contribution is of the highest and greatest value to the business. Achieving these objectives builds value and positions the company for a business transition by not only driving company performance, but also reducing turnover and typically, increasing productivity. During this module, we will explore various personality profiles and staff assessment tools such as DISC, Myer-Briggs for example, and how to implement them and gain value from them to build value. We will also study job benchmarking and aptitude testing. Each of these tools will come together to develop and create hiring processes that improve the quality and success of future employees. The next step is to apply and integrate these concepts into the organizational structure and the management, staffing and hiring plan for the company. Part of the hiring plan will be employee development plans, utilizing the tools and techniques gathered within this module and based on the systems developed for the business. The result is to have plans for hiring, training and development of new employees and internal transfers to new roles that is quick, efficient and successful in placing people in their best roles, providing every opportunity for them to be successful and the ability to advance as appropriate.
2. Part 2 Month 2 Operating System – The objective of this module is to define the operating system for the business. The operating system defines the mission, vision and values of the company, standards of performance and quality. In this module, we will explore and learn methods for creating the Operating System, integrating each element previously learned and explored throughout Business Transitions. We will explore and learn about performance culture and a philosophy known to as House of Quality. We identify and learn how to integrate knowledge gained through previous modules of Business Transitions into the business operating system. The objective is to be certain the business has a firm plan to execute and implement knowledge gained throughout Business Transitions.
3. Part 2 Month 3 Testing 123 – The objective of this module is to create and implement testing and evaluation plans for the techniques, systems and methodologies learned and implemented throughout business transitions. We will look at systems in place and running, management team working in sync, operating system and culture in place and adhered to and that financial controls are in place and working. To evaluate, we will explore building test plans, plans that not only test under normal conditions but also under stress conditions. The objective being to see what it takes to break any system. This will identify new weaknesses which need to be resolved through rework of the system.
4. Part 2 Month 4 Due Diligence – The objective of this module is to learn and implement techniques for performing self-directed due diligence for the business. Due diligence is having complete business documentation in place for the business, as well as all systems, procedures, plans, records and studies. Due Diligence, when performed by an outside third party is time consuming and their objective is validation of claims and representations made by the company, as well as looking for reasons that history of the business is or is not representative of the future performance of the business. By the business doing this itself on a continuous basis, the business will build its value and save time. Items we will explore in due diligence: Creating, managing and maintain a data room based on a thorough due diligence list; Diversity – the company’s history, practices and policies. Diversity is now recognized as a driver of building value; Environmental, Social and Corporate Governance (ESG). ESG is relatively new and growing driver of building value; Sustainability. Similar to ESG, sustainability is a relatively new and growing driver of building value.
5. Part 2 Month 5 Transitions Preparations – The objective of this module is preparation of materials for marketing the business to potential acquirors or investors for raising capital. Investors each have mandates and we will learn how to identify potential sources, how to reach them and how to effectively communicate with them. Subjects to cover: Teaser – how to create an effective one pager to capture attention; Non-Disclosure Agreement – reasonable language and expectations; Investor Deck(s) – how to create effective and compelling investor decks; Potential Sources; Transaction Types: Debt, Equity, Majority Recap, Minority Recap; Debt: Bank, Mezzanine, Structured, Sub-Debt; Equity: Angel, Family Office, Private Equity, Public Markets, Preferred Equity, Equity; Advisors; Attorneys; CPAs; Investment Bankers; and Brokers
6. Part 2 Month 6 Transitions Finalization – The objective of this module is the finalization of the Business Transitions process and execute on the plan. All of the preparation work is in place and changes will have been implemented. Note, Business Transitions is not a static process, but one that may and/or should be repeated on a regular basis to maintain momentum in the business. Regardless, at this point all preparations have been made that the business may move forward with the next evolution of the Company, whether that be continued operation in its transitioned state, raising capital for growth, acquisitions or recapitalization purposes; or an exit, whether that be sale to a third party, hand off to the next generation or an ESOP. Regardless of the chosen path, expertise and services of additional professionals and experts may be required. In this module the objective is to identify the process, tools and techniques to identify, qualify and select those experts and then how to engage and work with them to achieve the desired results. We will explore the advantages and disadvantage of each transition strategy, the documentation required and risks and benefits of each. We will discuss the need and integration of potential third party sources beyond financial resources, including specialists in specific legal structures and tax structures. We will also discuss how to identify and qualify the experts to assist in structuring and documenting the internal transition. And finally, how to manage the Business Transitions, whether internal, external or capital raise; including negotiations, timing and expectations.

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Methodology

Business Transitions

Business Transitions is based on practical experience, accepted business theories and proven results; integrated into a realistic approach to build value. The first four modules are designed to establish the baseline current state of the business, align management on the goals and expectations of the program and learn the key tools and methods to be utilized throughout Business Transitions.

Module 1 focuses on tools and techniques. It is essential that management of the company understand, accept and embrace the concepts of building value towards the objective of business transition and the tools and methodologies for assessing and evaluating decisions going forward.

Module 2 focuses on establishing the baseline for overall performance of the business. As business transitions is about building value, the baseline measurement is determined based on the financial performance of the company, i.e. the financial statements. To understand this, in this module we will learn the language of financial statements, how read them, how to interpret them and what actions and direction they can provide.

Module 3 focuses on Key Performance Indicators (KPIs). KPIs are a system for managing the business, performance of elements of the business and people within the business. KPI’s should be designed to demonstrate real time information so that decision can be assessed on both a current and proactive basis.

Module 4 focuses on delegation. Effective delegation is key to building value. Successful delegation is difficult. This module is designed so managers may gain the understanding and techniques for successful delegation. Successful delegation is key to building value.

The next several modules, 5 thru 14, are the implementation modules of Business Transitions. Each module follow a consistent flow for each value driver area; analyze, plan, evaluate, select, implement, measure, reassess and adjust. Ultimately each module works both independently and collectively to build value and position for the business transition.

Module 5 value driver: Systems Processes. The objective of this module is to measure the extent to which the business is run by processes or by people and to then effectively understand how to build processes, define policies and implement them within the business.

Module 6 value driver: Growth Potential. In this module we will look at growth potential. Businesses with greatest growth potential have the highest value.

Module 7 value driver: Proven and Repeatable Sales Process. Sales and topline revenue growth is key to building value. In this module learn to develop a Proven and Repeatable Sales Process or PRSP for the business.

Module 8 value driver: Neutrality Structure. In this module we will analyze the dependence of the business on suppliers, employees and customer concentration. Maximizing business value for a Business Transition requires that the business not be overly reliant on any one customer, employee or supplier.

Module 9: Cash Generation. The objective of this module is to understand the ability of the business to generate cash. Cash flow, gross margin and profitability have great effect on the value of your company.

Module 10: Recurring Revenue. In this module our focus will be on the power of recurring revenue. One of the biggest factors in determining the value of your company is the extent to which a third party can see where your sales will come from in the future.

Module 11: Defensible Position. The objective of this module is to understand and implement methods to create defensible business positions. Warren Buffett is famous for investing in companies with a protective “moat” around them. The deeper and wider the moat, the harder it is for competitors to compete.

Module 12: Customer Satisfaction. The objective of this module we will be measurement and improvement of Customer Satisfaction. This attribute measures both the extent to which your customers are satisfied and your ability to assess customer satisfaction in a consistent and rigorous way.

Module 13: People Plan. The objective of this module is understanding organization structure, roles in the structure and people in the roles. Great companies have great people.

Module 14: Operating System. The objective of this module is to define the operating system for the business. The operating system defines the mission, vision and values of the company, standards of performance and quality.

The design of Business Transitions is real time implementation. Through each module, as the module is learned, implementation will occur. Implementation includes methods and techniques to evaluate and measure implementation progress and success. Each subsequent module will include a session on reporting progress on prior module implementations.

The final four modules of Business Transitions are oriented towards a holistic review of the overall implementation, progress and results to date and expectations for the future. Business Transitions is a continuous and repeatable process and to maximize results, the value drivers should be reassessed, analyzed and modified on a continuous basis. In this section, Business Transitions will also focus on next steps in the process of building value.

Module 15: Testing 123. The objective of this module is to create and implement testing and evaluation plans for the techniques, systems and methodologies learned and implemented throughout business transitions. We will look at systems in place and running, management team working in sync, operating system and culture in place and adhered to and that financial controls are in place and working.

Module 16: Due Diligence. The objective of this module is to learn and implement techniques for performing self-directed due diligence for the business. Due diligence is having complete business documentation in place for the business at all times, as well as, all systems, procedures, plans, records and studies.

Module 17: Transition Preparation. The objective of this module is preparation of materials for marketing the business to potential acquirors or investors for raising capital. Investors each have mandates and we will learn how to identify potential sources, how to reach them and how to effectively communicate with them.

Module 18: Transition Finalization. The objective of this module is preparation of materials and processes for finalizing the Business Transition. The transition may be marketing the business to potential acquirors or investors for raising capital to support growth or recapitalization needs; or it may an internal transition to the next family generation, management or to employees via an ESOP or similar type of program. Regardless, in this module the techniques, forms, support services and professionals that will need to be engaged will be reviewed and the process and techniques for qualifying and engaging with them will be covered.

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Industries

This service is primarily available to the following industry sectors:

Technology

Technology has been advancing since the stone age when the first tools were created to help humankind perform their daily tasks. The first tools were made from stone. They were things like hammers, sharpened stones for cutting, and flattened stones for crushing and grinding. Technology continuously evolved from that point forward based upon human needs for a solution to a problem or objective. Whether it is material technology, electronic technology, computer technology, communications technology or information technology’; technology has continued its development from its first inception. And many times, one technology is born out of another technology, or the combination of several technologies to create a new technology.

For example, the first computers were purely mechanical; gears, levers and fully manual operation and were designed and built to specifically serve a single purpose. Computers evolved, combining electricity to power the gears and increase efficiency. Around that time, Alan Turing theorized the idea of a general-purpose machine able to compute most anything that may be computed. Evolution continues and mechanical gears give way to vacuum tubes which then give way to transistors; continuously shrinking the size while expanding the capabilities of the technology. Along this path, additional technologies are developed that enhance the capabilities of computers, including operating systems, programming languages, memory chips, faster and more powerful CPUs, disk drives, solid state drives; each continuing to advance in their capabilities; and in the near future, Quantum computing. Evolution continues and each of these core technologies improves becomes smaller, lighter, and more powerful.

The same evolution may be said of many technologies. Steam engines become internal combustion engines which evolve into electric engines. Airplanes engines evolve from internal combustion with propellers to jets and next, electric engines as well. Carbon steel evolves into stronger, lighter weight carbon fibers. The net result being that technology is not static, it continues to evolve and growth at the pace of human innovation.

Technology is part of existence of every business and its use and application is a function of everyone’s lives. Technology advances cover all disciplines and areas of science and industry. Focusing on computer and related technologies; in the business world, there are traditional uses of computer technology; word processing, spreadsheets, CRMs, websites, online ordering, and now virtual meetings. In engineering there is CAD, modeling, and simulation functionality. In manufacturing there are production control, numerical control and other process-oriented automation. In healthcare there are patient electronic medical records (EMR), virtual and remote reading of x-ray and other diagnostic results, and robotic and remote surgeries. Think of an industry and there is computer technology ready to support it and grow it. Technology, however, goes far beyond computers. Then there are the newer technologies today that are becoming essential parts and elements, both standalone and integrated into solutions for every industry and becoming essential for productivity and competitive position our global economy. Some of these include:

1. Internet of Things (“IOT”)
IOT is the concept that all devices may be connected via the internet to one another and to corporate data systems, providing data for analysis, reporting and measurement upon which decisions and actions may be taken in “real-time” to improve performance or outcomes, or prevent failures in a system. The information will also be used in planning and decision making for future events; all with the goal of optimizing performance, improving profitability, and increasing value. The impact on each business will be industry dependent and perhaps even somewhat unique to each organization. The end result is the same, however, gathering large amounts of data and transforming that data into information to enhance the value of the organization.

How will this affect an industry? Recognize that IOT is not only changing how business is conducted today, but also creating new business models for businesses. For example; by using IOT technology, the “pay per use” business model is a now a reality for many businesses and becoming an option for many more as IOT and the data generated becomes available.

2. Machine Learning
Machine learning, the ability of a computer to learn and teach itself based on data analysis of repeating patterns. Social media platforms use this technology to gain insights and understanding of their users, specifically; their connections, the types of articles and stories they read, or the amount of time a subject or topic engages them. The platform (machine in this case) applies that knowledge to further engage the user and increase their usage of the platform. The relevance, the longer the user engages, the more ads the user views and the greater the revenue of the social media platform.

Machine learning exists beyond social platforms and is changing the way businesses do business with both other businesses and consumers. Machine learning continues to occur on most mobile devices even when the device is not in use. By monitoring and mapping a user’s location and travels, the service provider is able to geotarget ads, offers and promotions to customers. All of this intended to increase revenue, profitability, and value.

3. Virtual Reality
Virtual Reality places you in the content Instead of just viewing content. This technology allows the user to experience and interact with contents in a virtual world. While it began in the gaming world, it is and will impact most every industry. This is made possible by advances in hardware and programming techniques.

Immediate impacts are appearing today due to the Covid pandemic. In real estate, the traditional open house or house tour is now available by some realtors via Virtual Reality. With this technology, home buyers are able to virtually walk through a home, turn on lights, open doors, turn on faucets, flush toilets; everything one would do in a home tour. The enhanced benefit, out of town buyers can tour properties and make purchase decisions without a physical visit. In the future, look for similar capabilities in retail, education, and numerous other industries.

4. Touch Commerce
Making purchases with the touch of your finger is now a reality. The merging of touchscreens with ecommerce point and click shopping facilitates the purchase of most anything with a single touch of a cell phone or tablet. Once a customer has integrated payment information, a single touch allows consumers to buy most anything and everything with a single touch of their screen.

This advancement in technology is huge for both customer convenience and of course the ecommerce companies that have integrated this into their platforms. Touch Commerce enabled transactions are growing by over 150% per year and this expected to increase as more companies implement the technology and customers become more comfortable and accepting of it.

5. Artificial Intelligence (AI)
AI is software technology enabled by advances in processor chip technologies that equips computers with the capability to make decisions, similar to human thought and mimicking human decision-making processes and performance of complex tasks. AI is used today in functions including; speech recognition (e.g., Siri, Alexa, OK Google); medical diagnostics, weather prediction, streaming services (eg., Netflix, Amazon Prime Video to recommend future choices based on a user’s watch history), scheduling and routing, (e.g., train scheduling, airline routing, Google Maps route planning); capacity planning to maximize sales and revenue (e.g., airline seat costs, hotel room pricing) and in customer service solutions (e.g., appointment setting, chatbot support). All tasks that can and are being done with efficiency and with superior outcomes for the businesses that have implemented. Superior in terms of reduced costs, increase revenue, and increase profit and value.

6. Blockchain
Blockchain, in simple terms, is an electronic ledger that is shared among different users. It creates a full, complete, and unalterable ledger of all transactions regarding an asset. Today, blockchain is most commonly associated with cryptocurrencies, i.e., BitCoin and the like. The power of blockchain, however, is to think of it as a digital record of any asset. By digitizing the asset, it is easily and openly managed, tracked and maintained. The power of blockchain is in what is known as “smart contracts.” A smart contract is a self-enforcing agreement embedded in software code managed by a blockchain. The code contains a set of rules under which the parties to that smart contract agree to interact with each other. When the predefined rules are met, the agreement is executed, and all business operational and payment settlement rules are automatically enforced.

7. Nanotechnology.
There are other technologies that represent the current state of technology, too many to name. The end result to keep in mind; customer acceptance typical equates to greater usage. Greater usage typically equates to greater sales revenue and greater revenue typically equates to greater earnings. Collectively, all of these equate to building value for the companies that adopt them and successfully implement them.

The future for technology is limited only by the creativity of human mind. Businesses must be open to these advances, understand them and build business models that integrate technologies that enhance and optimize the workflows and performance of the company while also adding value to the customer the company serves.

Adding value is the key to technology, from both internal and external looking company perspectives. From an internal perspective, will the technology improve workflow, improve efficiency, improve throughput or improve results? From an external perspective, will the technology provide a better customer experience? Technology for technology sake is interesting but does not typically build value. Companies must keep in mind that technology is a tool, just as the first shaped rocks were tools millions of years ago. For tools to be of value, they must add value by making the work of the compa