Strategic planning is at the heart and is the soul of everything we do. Whether it’s developing a capital strategy, exit strategy or growth strategy, it all begins by understanding what the CEO and/or owners of the business want accomplish. It’s the old “what do you want to do when you grow up” question. But now we take the answer and drive to make it a reality. We can’t say this enough … it ALL begins with what YOU want to achieve. Along the way we may influence you to moderate some goals, make other goals bigger and maybe add or subtract something, but the goal always is to get you to where you both REALLY want to go, and what can REALLY be achieved. You know from experience that sometimes a different set of eyes will see something that we miss while in the weeds of daily operations. We also know that if we ask the right question, then a CEO can begin to see the business in a different light. The exercise itself of having an outside third-party evaluate a business, and help in projecting that business forward can be an invaluable tool. Contact us to discuss further.
Corporate growth, in some ways, is an art form. How does the CEO balance growth with capital, human resources, and capital resources while constantly reacting to changes in the company’s industry and the day to day struggles of business? In smaller companies (under $10-20 million), most often the CEO plays all roles in trying to maintain the proper balance. But also most smaller company CEOs are critical to the marketing of the company’s products and services. Larger companies tend to delegate more. Experienced CFOs supplement a controller and treasury function and can be of extraordinary benefit to assisting the CEO in determining the right balance of corporate strengths and assets. Yet in the life of virtually every company comes a time when stagnation occurs. Revenues or profitability plateau. It’s like the body builder who plateaus at 200 pounds, and it appears that nothing can get him to 220. I’ve seen this happen with $2 million companies and with $500 million companies. But most of the time it is most seriously encountered with companies in the $5-50 million range. So what breaks the plateau? Most of time time it is an outside influence. It might be an accountant or a lawyer, …
In 2008 bank lending essentially stopped. It is safe to say that 2007 was the best lending environment in history. Tons of money available at incredibly low rates and without covenants. It was an LBO paradise. It seems that 2007 has returned. I’m working with a client on a new banking package. We’ve got a term sheet with good availability. Normal 80% LTV financing on capital equipment. Unlike 2007, the covenants are reasonable for both parties. But the interest rate? I still can’t believe it. Because of non-disclosure agreements, I can’t talk about the rates, but believe me, they are below anything you would expect. Even on 10 year money. As we learned not too long ago … get what you can while you can.
- Page 2 of 2