When evaluating the key elements of your business, here are 4 principles that when properly executed will maximize value and make your business standout in a fragmented industry.
1. Team: Develop experienced, skilled senior and second-tier management with high tenure and low turnover. This strong culture will flow through your entire labor force and have far-reaching effects.
2. Product or Services: Provide products or services that are consumable, recurring in nature, and have an element of a barrier to entry. Add to these, an emphasis on quality being a culture rather than a burden; and this should safeguard your position within your industry.
3. Customers: Your customer selection process should follow a strict discipline consisting of category type, controlled concentration, and sustainable market gross margins. Along with an emphasis on relationships, these should lead to better-than-industry-standard retention rates.
4. Technology: Your technology should be the latest, state-of-the-art available, tailored to your specific industry, and more importantly, customized to your operations. Additionally, you should have a fully integrated system that tracks your larger expense categories and provides “live” feedback for immediate field decision-making capabilities.
Proper management of and adherence to these metrics should result in maximum financial performance. Add to this a seasoned financial advisor with industry expertise and you will have all the elements necessary to create a well-priced transaction with preferable terms.
Tullius Partners has a proprietary Dashboard service that monitors these performance metrics on a monthly basis and is an important tool for enhancing and sustaining value. Contact us to learn more.