CASual Conversations – Episode 1
Video Transcript:
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Michael Lamm: Hi, my name is Michael Lamm from Corporate Advisory Solutions. I’m here with Amy Warrington, our digital marketing specialist that we have on the CAS team. Just recently we launched a new service line and exit prep service line that we are extremely excited about and wanted to spend some time with Amy, who heads up our digital marketing. Just ask us, ask me a few questions about what’s so exciting about it, what are we doing and why, and in seeing kind of how we could tell the market about some of the exciting things that we’re trying to do.
Amy Warrington: Thanks for having me, Michael. I’m super excited. You ready to get started?
ML:
I am ready.
AW:
All right. My very first question is an easy one. At a high level, what is exit preparation?
ML:
Exit prep is basically services that we’re offering well before a business owner wants to sell their business. So think about it as you’re getting ready to play a big World Series game that you’re gearing up for and you’re doing all these few steps to get you ready for that game. And so our team gets involved very early on in helping them craft where their business sits from a valuation perspective and how best to position it over the long haul to maximize value.
AW:
Okay, so when should they start calling you? When they’re at the game? When they’re ready for the World Series? Or should they be calling you when they’re, you know, getting ready for the playoffs?
ML:
Amy I want them to call me well before that, maybe even at the preseason level, if they could do that. So they’re calling, calling me well in advance or our deal team because the earlier we could start with preparation versus us right before the World Series game, we are in such a better place to help the company achieve their objectives.
AW:
It may be that, you know, they’ve got to get their financial controls in order or there’s issues going on inside their management team where they need to bring on a new sales and marketing person or they’re going to change out their technology. All of those types of questions. The earlier that they engage an advisor, the better that our platform on our side of the table with what we’ve developed to help assist these companies can work even so much better.
ML:
And that’s and that’s really the key driver for us. Earlier, the better.
AW:
Earlier, the better. Okay. So why did you decide to start offering it as a service then? Did you get called into the team way too late on a couple of occasions or any?
ML:
There has been so many times where I would say to my team, Man, I wish we would have gotten in a year or two early to this situation because we could have helped craft the story differently. Change out, the president CEO added additional sales and marketing flair to the business to get a better return on their investment that the business owner has made into the company as well as the time and effort that we are putting into the transaction as well.
So it was definitely from kind of our own war wounds that led to this exit prep service and it’s you have to go through some of those were wounds to see, especially in the industries that we cover, how important it is for preparation. It’s not like we’re selling a house. The more these are living, breathing businesses every day, things are changing.
Then you add to it the volatile market conditions that we have. It just adds a whole other layer of complexity. And so that’s why, you know, in our mind, the more we can help earlier in the process, craft the storyline and finance and look at the financial performance, we can absolutely be more successful in a in a in an M&A event when they’re ready to sell the business.
AW:
Okay. So you mentioned some war wounds. What are some of the war wounds that kind of came out of left field where somebody had called you in earlier? You could have avoided them or made sure.
ML:
One is. One of the things that we tried to do at CAS is when we find out about a target company or we’re looking at working with somebody, we like to go visit them. Same like like anybody would. If you’re going to go buy a house or buy something, they’re probably going to want to look at it and see what it’s all about.
And I had one particular client who we had never visited before, and it was one of those things where if I visited them, I would have opened my eyes to the operational look and feel of the business. And so when we got to the point where we were going to bring buyers in for to visit the company, we went on a site tour, a facility tour of the company.
And when we were walking through, there were just it was a mess. The operation was a complete mess. There were wires everywhere. The server room was a mess. There were just so many things that if we had been through the operation earlier, we could have offered up so many different ways to help mitigate the issues that we had after after the deal, after that site visit occurred.
That’s just one small example of something that we could have changed and looked at differently before we we got to the dance.
AW:
So starting early is the key to a successful exit, pretty much is the key takeaway here.
ML:
Yeah. And I would just tell you, you know, other types of things come up to like financial performance related measures. Like the more that we can look at the historical financial performance of the company and really understand what’s driving the growth in revenue and in profitability, the better we can be equipped to tell the right story about where the numbers are tracking to and heading.
All of those things lead to us being a good advisor and actually really exceeding our clients expectations versus when we’re called in late. We don’t have the full picture and I think that’s the the main driver for why we we we started this service line.
AW:
Okay. So you had mentioned volatile markets and those are making people very nervous. Do they sell do they ride it out? Do they merge? What do you suggest they do?
ML:
Get a market valuation assessment because you’ve got to first figure out what your baseline is. Once you know, kind of where what the range of value is out there in the marketplace, that creates the benchmark for you to figure out when what the timing is and what you may need to do in order to improve that valuation. You may be a business owner that is 70 and is ready for retirement, but or you may be a business owner that’s 50 and has plenty of runway left.
It all also depends on where you’re sitting from a retirement perspective, but I would always tell somebody if they’re thinking about thinking about value, you know, thinking about doing something with the business, get an initial valuation first because that will help create some guideposts for you.
AW:
Well, awesome. That’s some good advice. And it ties in with what we’re going to be talking about next time, which is going to be initial market valuation assessments, what they mean and what you can do if they don’t come back as what you were expecting.
ML:
Absolutely. Yeah. It’s that that’s really where it all starts. And look forward to the next the next video session that we do about that. Thank you for listening. And if you guys or anyone who’s listening are going to be out at any of the conferences over the summer, I’m going to be speaking at the ACA convention, which is in Orlando in middle to end July.
And then my business partner Mark will be at the forum I executive retreat in Wisconsin the first week of August. And if you have any interest or want to discuss confidentially and if you’re interested in some of the things that we’re doing, please ping us. We will be there and we look forward to the conversation. Until next time, look out for the next video that we do on market valuation.
