Five Step Process Components


The Five-Step Process: Components

Read the Overview on Value Development

Advisory

Our Value Development experts can help educate and inform your team on the right strategies and tactics that will better position you for successfully executing on any number of dependable growth and financial options – including effectively responding to a transition involving a change in control of your company or in guiding your own execution of our Five-Step Process.

Under Advisory conditions, SIP-SSP typically provides support on a ‘Just-In-Case’ basis where there is no actual buyer or investor involvement, at least not at the onset of our engagement. Components of our Advisory service include:

Internal Due Diligence
In order for your company to obtain preferred valuation treatment during any recapitalization or equity event, a thorough and exhaustive internal due diligence process will be conducted by any interested buyers and or investors. Our team will provide insights into the likely due diligence target areas for your firm:

  • To help guide you in the most appropriate and impactful process improvement activities
  • To assess and fine tune your readiness to respond under anticipated due diligence demands

We provide due diligence checklists and review each section to prepare you for the right responses that will be required, based on the most likely strategies and tactics that will be used by any buyers and/or investors.

Ecosystem Due Diligence
Today corporate evaluators understand that a company’s full value proposition requires assessing the integrity of its entire ecosystem, and more often that extends to the nature and durability of its third-party relationships. These relationships are interdependent to the overall value profile and can come under similar due diligence scrutiny.

To the extent that your firm’s value proposition involves such third-party relationships, SIP-SSP will coach your executives on ensuring certain essential characteristics that must exist between the parties to strengthen your firm’s value position during due diligence.

Developmental and Tactical (Hands-On Execution)

‘Just-In-Time’ Tactical Support
Our team can serve as a Tactician under ‘Just-In-Time’ conditions when interested qualified investors or buyers are known and the timing for consideration of a transaction opportunity is limited.

Value Articulation
Often vital to a highly successful exit or other transaction is the proper representation of strategic value from key members of the company to the buyer/investor.

This articulation of value should be delivered by the CEO and executive leaders, as required by the buyer/investor. Confusion or value erosion can occur when the spokesperson comes from a functional vantage point; company value points are naturally going to be articulated differently. It is essential that clear, consistent, accurate and compelling articulation of true company value is offered by those for whom the buyer/investor may rely on for building that future value.

Our team instructs firm personnel on proper spokesperson preparation including role playing. This process will identify (a) any gaps in your company’s strategic value, (b) the extent of internal alignment that must be achieved as a team tasked to serve as spokespersons, and (c) the candidate spokespersons to develop over time.

Buyer’s Scorecard
Understanding the ‘Mind of the Investor’ is critical to achieving strategic value. Investors and buyers often establish a specific criterion (“Scorecard”) that constitutes strategic value well in advance of initiating M&A activity.

The degree of alignment between the buyer/investor criterion and the seller’s offering will often dictate the extent of interest. Each industry and market sector has unique high value criterion that, if found within the market, represent the best opportunities. Such interest is evidenced, in part, by the flow of money within that market.

It’s important to understand how and where money is flowing as well as why. It is also essential for a company interested in eventually executing a strategic value-based transaction to become intentional in aligning itself with the criterion that constitutes high value within its targeted sectors – and to do so during the value development phase.

SIP-SSP can help you develop a Buyer’s Scorecard through a process that equips you to become more sensitive to market segmentation, to be able to identify the value criterion, and to learn ways to study the move of your target market.

Competitive Analysis
One of the most important insights to acquire before and during any contemplated transaction is an understanding of your competitive landscape at a deep level, coupled with a clear view of your company’s relative position within its market. We provide a Competitive Analysis Blueprint, with coaching for the firm to conduct its own thorough competitive analysis at a time of its choosing. Our Process will help you:

  • Install defensible market differentiation characteristics during the value building phase that contribute to the perception of optimized company value
  • Articulate key contrasts between your company and its competitors to help justify an optimized valuation during the due diligence process
Engagement Approach

An Advisory relationship typically involves 4-6 months of retained, ongoing interactions to achieve the desired objectives. Our strategists are experts at seamlessly integrating our capabilities with your leadership and operations teams to minimize any impact on your day-to-day operations.

A ‘Just-In-Time’ Tactician infusion typically involves 12-18 months of regular interaction with executive team members to support their implementation of our Components within their daily management activity.

We recommend this sequence for the Components:

  1. Value Articulation: To address what may be expected of certain spokespersons and highlight the relative preparedness involved in an eventual equity event
  2. Buyer’s Scorecard: To begin the process of better understanding the buyer/investor mindset and reading the market with a new perspective that focuses on building the company from a value orientation
  3. Internal Due Diligence: To understand the likely comprehensiveness involved in an eventual due diligence process and discover critical gaps requiring attention during the build process
  4. Ecosystem Due Diligence: To augment the internal due diligence process and allow sufficient time to help fortify third-party value where necessary
  5. Competitive Analysis: To augment the company’s understanding of its market position

(Five-Step Process – Copyright 2017: Sage Strategy Partners, LLC. All rights reserved.)


Top