Case Study Project Description

An owner had spent ten years building a manufacturing company. He is struggling with growth and really liked the technical side of the business but wanted someone else to run the rest of the company and take it to the next level of growth.

Project Problem

How do you find the right partner and bring them in as an owner? Do you bring in investors? Do you hire professional management who manages you, the owner? Do you go public? Do you get bank financing for growth capital and equity financing from a new investor/partner?

Solution

 

The issues described are complicated for any business owner. As an owner, there is freedom to make decisions they way they want, and the trade off is keeping the status quo alive. Change is required. To bring in a professional manager means to let go of control as an owner but possibly enjoy larger shareholder returns brought by an able bodied team who wants to do what the owner doesn’t. By bringing in a shareholder partner, there are all kinds of chemistry and fit issues that money doesn’t necessarily cure. What works for one person in each of these scenarios might not work for other people.

Reviewing all the options with this owner, we explored the merits of each option including going public with a larger group of people. In each case finding someone who wanted to be in that business, had the financial capabilities and was good fit with the current owner proved difficult. Business plans were built, valuations done, opportunities presented but the right fit did not materialize. Standing aside for change is difficult when you’ve run the show the way you want for years.

Result

In the end, the owner decided to retain more middle managers who could build the market out, rather than trying to sell the company.

Our results speak for themselves

375

Assignments

52

Average Valuation
Growth, %

28

Average Profit
Growth, %

10

Average Revenue
Growth, %

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