The teams at businessDEPOT are always talking with clients about ways to grow their businesses. In this blog, we delve into a recent example of how one of these conversations led to a period of growth using mergers and acquisitions [M +A].
When going through the process of growth via acquisition, strategic planning and informed decision-making are crucial for achieving successful outcomes.
As Capital advisors, one of our primary responsibilities to ensure long-term success is to help clients follow a strategic path and receive the best decision-making inputs before embarking on the M+A journey.
If a business owner doesn’t have the strategic platform or the right mix of decision-making inputs, we create them. And that’s exactly what we’ve done with one of our clients recently.
the power of strategic planning
Before diving into the transactional phase of M+A, laying a solid foundation with a strategic plan is essential.
This strategic plan gives a business owner the compass to navigate through the field of possible growth targets and find the best solution for the growth goals they seek.
Building a strategic plan involves understanding the status quo of a business [‘Now’], the long-term objectives [‘Where’], addressing their strengths and weaknesses and identifying potential growth opportunities [‘How’].
Helping clients articulate their clear strategic direction ensures that their M+A plans align with their overall business goals and vision.
how we helped a client prepare for growth by acquisition
We recently worked with a business owner who needed to grow to fulfil their own aspirations, as well as optimise the financial performance of their business – this business didn’t have a cost problem, it had a revenue problem.
While the business owner had a clear idea of how they wanted to grow, the elements of ‘Now-Where-How’ weren’t clear to their stakeholders. After painting a picture of what this looked like, it made the plan clear to everyone involved.
To achieve company growth with M+A in mind, we facilitated a half-day strategy workshop with the business’s key decision makers to define the ‘Now-Where-How’ parameters for growth. This was an extremely valuable session – aside from the data capture we achieved, we also discovered and resolved differences of opinion of what those parameters were.
The businessDEPOT team then took the information gathered at the workshop and built the strategic plan documents. It meant they had a 10-page document that clearly articulated the focus points for strategic growth and how they’d be achieved. We also built the step-plan framework that set a project timeline for each strategic effort and who would be responsible for it.
With a clear plan of the ‘Now-Where-How’ and ‘What-When-Who’, the business owner had a crystal-clear strategy to achieve their growth goals [as well as clarification on how to align their stakeholders with that growth]. Communication of the plan is just as important as having the plan!
The business owner found that having a well-crafted strategy acts as a navigation tool to help guide decision-making at every stage of the M+A process. It enabled them to identify the right acquisition targets, evaluate synergies and potential risks, and determine integration plans.
the business strategy timeline
With the strategic plan in place, the deal team had the framework to focus on the important transactional preparation – conducting comprehensive market analyses, competitor assessments, and financial evaluations, ensuring that their M&A efforts were backed by robust insights and thorough due diligence.
The strategy work took 4 weeks to complete, from workshop to final handover. We refined the strategy plan and the step-plan along the way to a point where the business owner was able to ‘own’ them.
decision making inputs
Given M+A creates an inflection point in a business, decision making by the business owner and their management team is particularly important before, during and after a transaction. Building a platform for the best-informed decision making helps the success of growth by acquisition.
Having substantial experience within their own business, this owner wanted to match that with the experience of outside executives to create a decision-making superpower. Enter the Advisory Board…
how an Advisory Board helps
Typically, an Advisory Board comprises seasoned professionals with diverse expertise, who provide benefits through strategic guidance, industry insights and objective advice to a business’s own leadership team. These experts act as a sounding board, helping the client make informed decisions throughout any stage in the business cycle – in this case, it was their M+A journey.
The Advisory Board complemented their deal team – their accounting, legal and capital advisory team are experts in their field – in this case, bringing in a culture expert, a supply-chain and logistics expert, and a former competitor from their own industry was beneficial to the overall decision-making process.
Having worked with the business owner on their strategic plan, we were well placed to put together the objectives and framework for their Advisory Board. To do this, we wrote the Board Charter that defined how the board worked, giving it structure and discipline. We drafted the meeting agenda templates, and meeting minutes templates. The business owner was able to outline what they wanted from the Advisory Board, and we put together the structure to achieve it.
why your network matters
With the structure in place, we needed the right people to sit on the Advisory Board. By leveraging businessDEPOT’s network and experience, we helped our client to identify and recruit Advisory Board members with the necessary domain knowledge to add value to decision making. These board members brought a fresh perspective, challenged assumptions, and provided objective assessments, contributing to improved decision-making and risk mitigation.
The establishment of the Advisory Board took 6 weeks and is now a sustainable and evolving part of the owner’s toolkit for running their business.
setting the stage
As capital advisor, our role extends beyond the realm of just the M+A transaction. By helping our clients set and articulate their strategy and ensuring they have the best decision-making platform supporting them, we set the stage for success. Through strategic planning and expert decision making, we equip our clients with the tools and insights needed to navigate the M+A landscape confidently and achieve their goals.
we’re here to help
We’d love to help you prepare for a period of growth by setting that stage for success like we did with the client described above. For a confidential discussion about how we can help you, give the team a call at 1300BDEPOT or shoot us an email at firstname.lastname@example.org.
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