The Statement of the Problem Limits the Search for Solutions
“… The human understanding when it has once adopted an opinion draws all things else to support and agree with it…”
Francis Bacon (XLVI, 1620)
During a recent conversation with a client preparing her company for sale, we reviewed the company’s results for the year ended in 2022. Everything looked great compared to the plan for 2022. However, when we looked at the past three years and talked about how to add value to the company, we realized that opportunities to add maintenance contracts with enhancements were a missed opportunity. Customers ask the company every year for maintenance services and with rare exception, are turned away.
It’s understandable. We’ve been lucky to have great demand continuing through 2023 for for design/build/installation projects. It’s hard to focus on strategy when your hair is on fire. In this case, everyone’s focus was on the previously identified KPIs, so selling new maintenance and enhancement services had taken a subordinate position. Finding and building out that maintenance service line had not been a priority that was tied to a strategy, resources (either people or financial resources), or employee incentives.
In response to our discussion, the owner decided to take action to increase maintenance revenues for the balance of 2023. First, she met with her controller and maintenance manager to develop a “future state” for that line of business based on their current clients. To achieve that state, they projected what would be needed in terms of new hires, marketing, sales, customers, and operations. They set goals to add to the dashboard and “tapped” a couple of employees who seemed to be ready for a move up in the organization. They began developing a marketing and sales program and hiring another crew immediately.
This owner overcame two difficulties to unlock this potential value:
- Difficulty One. Lack of time. Response: She “made the time.” This is never easy, but sometimes the energy from a new initiative lifts the team, delights your customers, and infects everyone with enthusiasm, especially if a potential bonus on performance is involved. This owner was pleased that her team jumped into the growth potential.
- Difficulty Two. Focus on what’s worked before. Response: She looked beyond the established plans to creatively consider new strategies to add value to the company. This company’s potential for being successful with high-end residential maintenance services is huge. Her market position, reputation and existing long-term relationships with customers who regularly update or refresh portions of their properties are all indicators of existing demand.
Action Plan for you to consider today:
- Adjust performance to meet goals. “Fine tune” Hires, routes, customers, etc.
- If opportunities to improve value are identified, build into Strategic/Business Plans for subsequent period and measure.
- When ready, move to SELLING PHASE (or alternate-Buy-Sell; ESOP; Liquidation, etc.)
“Ye olde dashboard” – Refresh Opportunistically!
How often do you check on your Key Performance Indicators? Are you using them to adjust for better results? Thinking about how your company can maximize its value? We’d be happy to have a confidential complimentary conversation with you about these or any other exit/sales/buying issues.
You can reach me via email: [email protected] or on my cell phone a: 224-688-8838.
We’re here to help you Harvest Your Potential!