No Growth to Doubling Revenue in 2 Years – Case Study

In October 2012, we began to advise a $12 million company that hadn’t grown in 5 years. It was a good company, producing about 15% EBITDA margins and well over $1 million annually in free cash flow. We had known the CEO for several years and knew he was about three years away from wanting to sell his business and retire. “How about if we double or triple your business before we sell it?”, I asked. He thought I was on some illegal substance – but not so. After talking further, we were retained to help him create a growth plan, to determine what capital was needed and to find the capital. Result? October 2014, LTM revenue is in excess of $23 million. By doubling revenues, margins have improved slightly, and the equity value of his business (he owns 100%) has more than tripled. CEOs – good CEOs – often get into the weeds of a business that the big picture is lost. This CEO didn’t think it was possible to grow his business – he was a “one armed paper hanger”. Sometimes growth just needs vision – and the right set of contacts. I’ve spent the last 23 years …

Thank You Freedom Fest 2010

Last night was the conclusion of Freedom Fest 2010 at the Bally’s Casino in Las Vegas. The quality of this program was astounding and I congratulate all who were involved. You haven’t lived until you see Steve Forbes dressed up as George Washington in one of the skits at the closing banquet. We live in unique and dangerous times. As I’ve written to my clients on all too many occasions, the investment decisions that we make in the next couple of years will be the most decisions that we will ever make in our lifetimes. Get it wrong and we may be financially ruined, regardless of how many financial resources we have today. Get it right and even modest investors can make millions, securing the financial future for their families today and for generations to come. If you have never heard of Freedom Fest, click on this link and see what you missed. Something like 160 presenters over three days. I’ve been to lots of conferences and heard lots of speakers. The quality of the speakers at this conference was impressive. And the conclusion is unmistakable: the United States and most of the major countries around the world are on …

House Bill Introduced

Below is a summary of the House’s version of the healthcare reform bill.  There have been rumors that no amendments will be allowed on this bill so this may be close to the final House bill.  Once passed, they will wait on the Senate’s bill and then a committee will work to reconcile the two.  It still appears that the Senate does not have 60 votes for any bill and in my mind it looks likely that the Senate will use the budget reconciliation rules to pass the bill with 51 votes. Summary below by year. 2010 Health plans must spend 85% of premiums on medical care, or rebate extra to policy holders.  This excludes Medicare Advantage which has the 85% rule starting in 2013. Dependent age on a policy is increased from 19 to 26. Bans lifetime limits on health policies Ends practice of terminating healthcare benefits because of claims Reduces pre-existing condition look back to 30 days from 6 months and limits the period of exclusion of coverage. Creates $5 billion pool for those who can’t get insurance due to pre-existing conditions Reduces donut hole in Part D Medicare by $500 Eliminates co-pay & cost sharing for Medicare …

Business TN – Wizard of Oz?

Remember the Wizard of Oz? Dorothy is searching for the Wizard to send her back home. But when she finds him, he is hiding behind a curtain shouting, “Pay no attention to that man behind the curtain!!” Congress today is playing the role of the Wizard with the Medicare program. Medicare beneficiaries are looking for the Wizard to make everything right again. Yet just like the movie, this Wizard must ultimately proclaim, “I can’t come back – I don’t know how it works!!” The problem? Baby boomers begin to turn age 65 in 2010 and the growth of Medicare spending will begin to skyrocket to a level well beyond the government’s ability to pay. While every single member of Congress knows that Medicare is on a collision course with disaster – there has been a multi-year concerted effort NOT to address the issue. It isn’t because of a lack of understanding – or a lack of viable options – but because of a willingness to throw seniors under the Medicare bus because it is politically expedient to do so. Democrats won’t give the President a “victory” on fixing Medicare – and Republicans won’t give Democrats a “victory”. Stalemate. The November …