exit strategyMany companies face challenges during their economic life cycle and must reconstitute themselves to stay abreast with technology and markets. All too often we see companies that fail to change and disappear.

Developing new products and markets bring on new and different challenges to a company’s existence. Some of these challenges create obstacles not encountered before.

Capital Restoration can help avoid the obstacles and smooth the waters assisting the team in avoiding a killer storm.

Case Study:

Your longtime client / customer has been profitable for years but is concerned they will run out of cash as they strategically look to move into new markets. How this plays out can determine if you have a CEO opportunity or a customer for another decade. (CEO = career ending opportunity).

This is a strategic challenge for those who have not been through the process before. Having a good CFO on the team often is not enough. Challenges exist in managing working capital, funding R & D, team building, corporate governance enhancements, and equity and debt raising are but a few of the challenges facing the company. All of these need to be accomplished while staying focused on the cash generating old co.

Like a captain of a ship headed into a storm the CEO will insist on steering his ship and be damned with the storm in his sites. This decision can be catastrophic.

Many times the right answer is to hire an interim senior executive who has been through this process. Many times cash is very tight and egos get in the way – creating an opportunity for a crisis. Avoiding the crisis usually requires advisors who can assist the CEO in loosening his hands on the tiller.

Parachuting in allows the interim executive a clearer view without the fog of history and bureaucracy.

Expectation of Mr. Wonderful?

Develop a strategy to avoid a storm that will sink / damage the company

  • Cash is king – work with the CFO developing crisis cash flows the right way so the right decisions can be made

Develop a strategy to maximize the value and cash from old co as you make way for the new child

Develop a strategy to build the right team allowing the new child to grow big and strong

Develop a strategy to obtain the financial resources necessary to support the expanding business.

  • Assist everyone in understanding alternatives and the cost of those alternatives

Assess the management team with a clear vision to ascertain if the human resources are in place to execute and avoid the storm.

  • Outline strengths needed to fill the voids in human capital to execute the business plan

Assess the sales forecasts with a realistic eye

  • A clear vision if often needed to help the team arrive at the realistic answer

Assess any materials created to present the new opportunity to possible stake holders

  • Working with the team to create materials that will create interest from potential stake holders.

Work with the executive team to build realistic strategic plans that encompass what we call activity based simulation models.

Work with the stakeholders to build solid corporate governance with board members that will add value.

It was my premise that companies go through economic life cycles and require different management skills through the continuum of that life cycle. Companies and the entrepreneurs must change how they manage in order for the business to survive. At some stage entrepreneurship is not sufficient and the nature of the organization must change, together with the people who run it.

To be successful the entrepreneur must be willing to accept change and be subject to review.