Selling your business can be a difficult decision, but for owners who don’t have an obvious successor, it can be the best option to preserve their legacy. In this article, an excerpt from Mergers and Acquisitions for Distributors: Expert Advice for Buyers and Sellers, available from NAW, Evergreen Consulting’s Brent Grover provides expert insight into this consideration.
This article includes:
Selling as an Exit Strategy
Thinking Beyond Family Succession
Monitoring the Value of the Business
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Distribution M&A Playbook, pt. 3: Integration Best Practices
Grainger’s Pricing Initiative, pt 2: The Quest for Optimization
Commentary: Harvey’s Stark Reminder on Disaster Planning
The following is an excerpt of Brent Grover’s latest distribution management book, The Little Black Book of Strategic Planning for Distributors, published by Modern Distribution Management. In this article, Grover argues that distributors need to focus both on operational excellence and customer intimacy, rather than choosing one over the other.
In The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market, authors Michael Treacy and Fred Wiersema adapted the three Michael Porter strategies into a choice of customer intimacy, operational excellence or product leadership. If you agree that product leadership isn’t a viable option for most distributors, the authors leave distributors with two alternatives: operational excellence or customer intimacy. In the following paragraphs I will argue for a third option.
Strategic choice No. 1 in The Discipline of Market Leaders is operational excellence, keeping costs down ...
The following is an excerpt of Brent Grover’s latest distribution management book, The Little Black Book of Strategic Planning for Distributors, published by Modern Distribution Management. In this article, Grover argues that the traditional method that distributors use to plan for the next year is flawed. Instead, they need to link the strategic plan to the annual planning process, and instead of working top-down, build from the bottom up. MDM subscribers get a 20 percent discount on this book.
General George S. Patton knew much about wartime planning and execution, and many of his aphorisms are memorable (“Lead me, follow me or get out of my way.”) and applicable to business situations (“A good plan violently executed now is better than the perfect plan next week.”).
To paraphrase: There are three ways that business leaders get what they want – by planning, by working and by praying. Any great business takes careful planning or thinking. Then you must have well-trained people to carry it out: That’s working. But between the plan and the operation there is always an unknown. That unknown
This article looks at the roles of each part of the organization in strategic pricing. Using a sports analogy, the author
refers to the Sales Function as the offense, the Operations Function as the defense, and the Purchasing Function as special
teams. IT, Finance, Credit and HR play support roles, enabling the team to be in a position to win. And management is the
coaching staff. Running a complex "play" like strategic pricing requires all functions to work in concert.
Much has already been written about the "science" of strategic pricing. I have written some of it, including Strategic
Pricing for Distributors, published by the NAW Institute earlier this year. I intended the book as a do-it-yourself explanation
of strategic pricing.
The magicians Penn & Teller famously perform a magic act that reveals the secrets of magic tricks. But even if you know
the secrets, learning how to execute those illusions requires skill and experience. And even if you understand the relatively
simple concepts behind strategic pricing, successful implementation is challenging work.
This second of a two-part article addresses how distributors can build and implement an effective strategic plan.
As I outlined in the first part of this article, a sound strategic plan is a gauge and tool for better decision-making and can help you communicate to employees how and why their contribution is important to the future of your distribution company.
Companies usually go wrong when they conduct their annual business planning process because they link the operating plan for the next year to the expected results from the current year. Instead, the annual business plan should work toward fulfilling the Big Hairy Audacious Goal" outlined in your longer-term strategic plan.
Though an outside facilitator can be beneficial, the ...
This first of a two-part article argues that wholesaler-distributors need a different approach to strategic planning based on their unique operating environments. Here's how to frame the process and best practices for distributor strategic planning. The second part of this article addresses how to build and implement an effective plan.
Only 4 percent of wholesaler-distributors reported that they engaged in strategic planning in 1982, according to the original NAW/DREF study, Facing the Forces of Change. Much has changed over the past 25 years. Recent surveys of eight industries by my firm indicate that 30-40 percent of distributors have a formal strategic plan, and many others use some sort of informal long-range planning process.
This article is an edited excerpt from the book, The Acquisitive Distributor, published by NAW-DREF. For more information, go to http://www.nawpubs.org/.
Curb appeal Many buyers are afraid of buying a distributor who has recently undergone a change in senior management, implemented a new software system, or relocated its main operation. These traumas may destabilize a distribution business, causing it to lose key employees and customers. Some buyers would rather wait until the business is back to normal.
Think of the process of selling residential real estate. A ...
For any distributor considering the sale of the business, this two-part article provides a wealth of information and perspective on how to evaluate and manage the many variables to achieve the best outcome. It provides detailed tips based on extensive interviews and experience on types of buyers, key considerations for sellers, expectations vs. reality, confidentiality, curb appeal and closing the deal.
Lessons learned from the fastest growing, most profitable customer segments ignite the process of innovating profitable, sustainable value propositions. Using customer profitability information, you can rethink current sales and business policies to create new ones that help transform marginal accounts into profit contributors. Here's how to create a customer-centric distributorship in the top performance quartile.
This article is an edited excerpt from the book, More to the Bottom Line, published by NAW-DREF. For more information, go to http://www.nawpubs.org/.
Distributors develop value propositions - products, services or a combination of both - by listening to their big winners. Product development is, of course, ...
With interest rates close to a 50-year low, and all the talk about rate increases, is this a good time for distributors to take advantage of leverage to make an acquisition, obtain a facility, open a new branch location or buy equipment? Should you lock in today's low rates? Consider asking these six questions to your bank or to prospective banks.
The innovative CEO of an Evergreen Consulting client, a privately-held regional distributor, invited a prominent banker to be a guest speaker at a recent Board of Directors meeting. The bank executive, David Lucht, is executive vice president and chief credit officer of FirstMerit Corporation, a diversified financial services company headquartered in Akron, OH, with assets of $10.5 billion as of Mar. 31, 2004, and 158 banking offices in 24 ...