Thursday, March 22, 2012

"Lauren Concise Lights Up EPC Market" - Energy Processing Canada

Congratulations to the NEW Lauren Concise EPC Group! The MAXIMA team wishes you every success and we thank you for the opportunity to act as your Canadian Transaction Advisor.




Factor #6 of 10: Market


Competitive position and sustainability

In the Self-Assessment, we asked you this question:

  1. Our business has:
    1. very little or no competitors, we are the industry leader.
    1. a few competitors, however we have a measurable competitive advantage and customer loyalty.
    2. many general competitors, however we maintain a measurable competitive advantage due to offering a product/service our competitors are unwilling to match.
    3. been struggling to keep up with our competitors.
    4. many large national competitors, we are a small local business that focuses on lowest price to get customers.

Typically the free enterprise marketplace will not allow a single supplier to “own” a particular market sector for an extended period of time. Customers will eventually demand to have a choice of suppliers.

Customers gain from the competitive marketplace. I.e.: Competitors can force other competitive business owners to become more efficient in their operations or to continually develop new “offerings” that contribute to creating or sustaining their competitive advantage. This drives improvements in solutions and products which continually drives competition.

At some point every business owner considers “How do I develop my business to the next level?” Strengthening your competitive advantage is a strategic decision that can spring board you forward. Taking the time to clearly understand why customers choose your products and services will help you focus on the “right things” not just “good things”.

The business whose clientele continues to utilize their services tends to have certain business practices which the client’s value. This can range from price to quality of service, to availability or convenience, to genuine desire to meet and exceed customer requirements, etc. A business that consistently maintains a solid position in a competitive market has a higher value and is easier to sell.

TO DO:
  1. Clarify who truly is your competitor and why they succeed in the marketplace.
  2. Take time to clearly identify in writing your competitive advantage.
  1. Pick two of your competitive advantages and build a strategy to remind existing and potential customers of those advantages.
  2. Measure your results.

Monday, March 12, 2012

Factor #5 of 10: Clients


Customer base

In the Self-Assessment, we asked you this question:

  1. Our business’ client or customer list is:
    1. broad, no one client or customer base provides more than 10% of our revenues.
    2. fairly broad, no one client provides more than 30% of our revenues.
    1. reliable “walk in” high traffic customers, with a history of solid volumes.
    1. based on “walk in” low traffic customers, volumes goes up and down.
    1. narrow, we have one client that provides 60% or more of our revenues.

Many small to medium sized business owners never take the time to understand their client or customer base. They simply work with whoever comes along. While many small businesses may thrive with a few close customers, buyers will review your customer list or numbers of customers for your products/services with a critical eye.

The Buyer will perceive a business model where you have a few clients means the loss of one client significantly reduces your revenue. Models where customers simply walk in the front door will require detailed histories of customer seasonal cycles and frequencies of business to demonstrate stable future activity levels.

As a Buyer this type of information is a critical part of estimating the future sustainability of your business model. The description of your business opportunity should clearly identify the type and structure of your customer base. A solid customer list spread over a broad number of customers or solid repeatable customer traffic numbers demonstrates lower risk to the Buyer. Lower customer risk contributes to the sale-ability of your business.

TO DO:
  1. Prepare a simple explanation of your client or customer profiles. I.e.: "Who makes up your client/customer base?"
    1. Do they continue to return for your product or service on a regular basis? Why?
    1. Draw a pie chart of your top 50% of your clients. What does this tell you?
    1. What would you like to see if you were the Buyer?

  1. Once you have summarized your client base, determine where your risk might exist. For example:
    1. Too much reliance on a few clients.
    1. If your business model is based on "walk-ins" only, how can you increase traffic? If your costs are fixed anyway, new clients/customers above your historical activity levels and the revenues generated contribute directly to your bottom line.

  1. Develop some simple strategies to strengthen your client base. Decide where you see the greatest opportunity for improvement. Identify the top 2 or 3 key ideas and start using those strategies today. Note: if you measure your progress to determine which of the 2 or 3 key ideas work the best, you can soon focus on the top 1 or 2 for the most effective & efficient results.

Tuesday, March 6, 2012

Announcement News Release – March 1, 2012


MAXIMA Divestitures Group welcomed as the newest member of M&A Europe – A Global Network for Mergers & Acquisitions

(Calgary, Alberta)  The management of the MAXIMA Divestitures Group Inc. is pleased to announce their formal association with the “M&A Europe” International Mergers and Acquisitions group.

MAXIMA recently worked with an M&A Europe Partner on a mid-cap transaction, both organizations cited synergies, and value resulting in the formalized relationship.

M&A Europe is a network of 28 M&A specialists in 23 countries worldwide. Their network consists of leading M&A boutiques with proven track-records and expertise, in the major European countries as well as a broad range of international projects. Through this international partnership we are able to access strategic Buyers, Acquisition and Merger candidates, and financial resources to deliver outstanding results in cross-border transactions. The M&A Europe partner’s experience and network range secures the highest possible standard of delivering value-added solutions to our clients.

David Braun, the president of the MAXIMA Group, said, “This relationship provides opportunities for Buyers & Sellers from all over Europe and the USA to directly interact with the Canadian marketplace.

The MAXIMA Divestitures Group is a Calgary based decade old firm which has completed a broad portfolio of transactions in the Merger, Acquisition and Divestitures marketplace.

For more information visit www.maximadivestitures.com or www.m-and-a-europe.com   

Friday, March 2, 2012

Factor #4 of 10: Source


Source of the product or service provided to customers

In the Self-Assessment, we asked you this question:

  1. Our business has:
    1. full control of the manufacturing and distribution of products.
    2. full control of our services offerings.
    3. distribution contracts with more than one supplier with competitive terms and conditions.
    4. various systems in place to access products and services as we require them.
    5. a distribution contract with only one major supplier.

Every business meets some need or desire of the customer. Whether the business model requires the owner to be baking cookies at two o'clock in the morning for the breakfast coffee crowd, or the business requires semiconductor crystals for manufacturing a temperature driven remote power source; the business relies on a product or service.

One business will have total control of that product or service in-house. Another business will have a distribution agreement or some source of independent supply which is fundamentally out of their control. Ideally the source of supply is protected by an agreement or contract. The typical business model includes some of both of these models.

While you as the business owner understand and have confidence in your model, a buyer will need to understand the "sources of supply" model and how your business meets and exceed customer expectations. Whether total control is in-house, or the business model is built on a distribution agreement, the buyer will look for reliable documentation. Fuzzy or unclear source of supply create risks. Poorly defined risk reduces the value of the business to the point where it might be unsellable. A business with clearly documented products and/or source of supply increases the opportunity for the successful sale of the business.

In business models where you provide a service or advisory services, your challenge is providing a reliable system for access to team members rather than yourself to complete the service required. In models where you provide advisory services you will need a reliable source or knowledge pool for the Buyer to access when you exit the business. This can be in form of suitable and clear working agreements, manuals, or access to support systems and resources.

As the business owner you understand your "sources", a Buyer will have to develop a similar level of understanding.

TO DO:
  1. As appropriate review and update of any documentation (i.e.: agreements) related to your various outside sources of supply or service insuring they are accurate and current.
  1. As appropriate, review and update your internal documentation on how you provide products or services insuring they are accurate and current.
  2. Schedule regular reviews for updates to manage all your critical "services".