The Value of Thinking Like an Investor - Modern Distribution Management

Log In

The Value of Thinking Like an Investor

New contributor Stuart Mechlin offers advice on how to add another dimension to your decision-making.

Editor’s Note: In 2013, we welcome a new contributor to, Stuart Mechlin. We’re pleased to add another perspective to our coverage of wholesale distribution markets. Mechlin brings with him both a diverse background, a deep knowledge of distribution best practices and a willingness to think outside of the box. Mechlin is also a member of MDM’s Editorial Advisory Board.

Mechlin’s blog posts will focus on thinking differently about growth and profitability by using a private equity investor framework. You can contact him at or connect at

One of the most important recent trends is the accelerated interest and involvement of private equity investors in distribution and related manufacturing businesses. Your opinion of this trend, your involvement with or lack thereof is not as important as whether you take lessons from these investors to further your own business’s success.

In this blog, I will discuss a useful approach, the Private Equity Investor Framework, which will help you think like an investor to improve and grow your business. You don’t have to be a trained financial professional to use and apply it.

As a distributor, we are successful because of our singular focus on our products and services. Sometimes, however, we are too focused. We are just too close to it. But when added to the other factors we use to analyze, run and make decisions about our businesses, this model provides another dimension to our decision-making process and may give us a competitive advantage in the marketplace.

So what exactly is the Private Equity Investor Framework, or PEIF? Private equity investors are all about using best-practice, proven roadmaps to build success. Why? They want to sell the investment and cash out at some point down the road.

This framework is a way of thinking, a discipline and a decision-making tool based on the following major elements (including but not limited to):

  • Additional Value Creation, or AVC. It is about more than just improving profitability.
  • Thinking of your company as an “investment portfolio.”
  • Trend analysis: The trend is your friend.
  • The thoughtful, bold move.
  • Impact, and not just making noise.
  • Diversity: Mitigating risk and realizing the potential of core competencies.
  • EBITDA multiple expansion as a key performance measure.

You may be reading this saying: “This doesn’t apply to me,” or “I’m not selling my business anytime soon.” Or you may be thinking: “I get numerous calls from PE firms, and most have not impressed me much.”

I submit that the Private Equity Investor Framework is every bit as relevant as anything else you do if:

  1. You are committed to profitable growth.
  2. You are committed to taking market share away from your competitors.
  3. You are committed to executing and achieving top-tier performance results.

You have more in common with investors than you may think. Both you and the private equity investor are about making successful business decisions in an environment fraught with volatile dynamics and uncertainty. And both of you know having more options is better when it comes to your business’ growth.

This model is about way more than just selling a business.

Below are some of the growth strategies you might be reviewing right now:

  • Acquisitions, including smaller local opportunities to access new channels
  • Succession planning and execution
  • Organic growth, taking advantage of unrealized opportunities
  • ESOP ownership
  • Selling parts of the business
  • Entering new channels and making convergence work for you
  • Joint Ventures, product franchises and other collaboration opportunities
  • Selling more services
  • Website upgrades
  • Vending
  • Supplier relationship innovations

The future of your business will be determined by the actions you choose, but also how you respond to new technology, economic up- or downturns, new or aggressive competitors, nontraditional market entrants and changes in your company’s makeup.

Thinking like a private equity investor gives you the ability to generate more options for growth. And having more options is the one certainty that enables you to gain an edge despite uncertain conditions.

In my subsequent blogs on this subject, I will explore in more detail the most important elements of the Private Equity Investment Framework, starting with Additional Value Creation, or AVC.

After 18 years in the wholesale distribution industry, including the role of senior vice president of Affiliated Distributors’ Industrial Supply Division, Stuart Mechlin is actively engaged in working with distributors on profitability and growth strategy. He is a member of several wholesale distribution company boards of directors. Mechlin has worked for several best-practice companies, including McDonald’s.

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.