WHEN (THE POINT)
Business owners come to BrassRock Consulting Inc. during times of flux in their business. These periods of flux are similar for every business yet unique for every business. What is clear is to adapt to these periods of flux business owners must identify the changes, compose a plan and then focus on execution of that plan. BrassRock Consulting Inc. helps with this process by not only refining the plan but also aiding owners in execution of the plan. The result is owners attain clarity in their business. While the below list is not exhaustive it is a list of challenges that start our relationship with our clients.
Growth, especially fast growth, is a very exciting time for both the owner and the employees of the organization. The demands of growth require capital investment, an increase in purchases of inventory and a key focus on execution of sales. What organizations tend to lose sight of is higher capital investment, larger inventory purchases and larger A/R results in a lack of cash. This lack of cash in the business can cause real problems as cash is the life blood of an organization. Further, companies that are expanding rapidly require qualified employees to ensure the company goes to the next level with few problems.
BrassRock Consulting Inc. helps you by working with you and your key management team to ensure both the business plan and the financial plan are well mapped out. Further, through our experience and with our questioning process we determine what needs to change in the organization to get the business to the next level. After working with you to determine what needs to get done, we regularly meet with you and your team to ensure everything gets done.
Fast growth can be extremely exciting but it’s a well thought out plan and precise execution of that plan that allows you to capitalize on that growth.
Investigating Succession Planning
There is no better scenario then when an entrepreneur builds a business, it excels and they are ready to transfer ownership. Typically the entrepreneur knows the concept of succession planning and knows who they want to run the business. What is not clear is how the business is actually transferred to others, what has to be thought about and will the owner be confident that the business will succeed after the transaction.
In our experience, the most important piece of succession planning is not the transaction itself but how the process of transferring ownership is managed. Owners typically want the business they built to represent something; to stay in existence well beyond the time of sale. To ensure this the plan for the future has to be laid, the people to lead the charge have to be determined and the capital and banking requirements have to be assessed and acquired. Then we worry about the transaction itself; how the owners get paid and where the money will come from. Sound overwhelming? Don’t worry. The BrassRock Consulting Inc. team will meet with you on a regular basis; and together, we will work through all the issues in a structured fashion.
Completing a Merger, Acquisition or Divestiture
Whether acquiring a business or selling off a division of a business, in our experience, everyone is focused on the transaction, the multiple to be paid and where the money will go. While it is true that the transaction is the focal point of discussion, everything surrounding the transaction has to be addressed as well. For example, when acquiring a business, to truly unlock value of the transaction it is the go forward integration plan that allows for value to be created. While this is the obvious reason for why the transaction is occurring, many times the plan to integrate gets lost due to lost deal momentum, lost excitement by employees or there is no plan for integration resulting in unrealised synergies.
When selling off a division typically owners are focused on the transaction itself. The critical issue is what occurs after the transaction closes. For example, what will be the new roles of employees or how will certain overhead costs such as marketing and administration be re-allocated. If one is to strictly focus on the transaction they will get the proceeds of that transaction; but the business itself will lose momentum due to confusion on spending, members of the organization not knowing their new roles and no clear direction determined for the slimmed down firm.
With a well mapped out plan ambiguity in the changing organization is avoided, costs are kept to a minimum and everyone is clear on the path of where the organization is going. Let the BrassRock Consulting Inc. team work with you to help you devise a plan and bring transparency to the transaction. Further, we will work with your accountants, lawyers and wealth advisors to ensure the transaction occurs exactly as you desire.
Obtaining a Board Member or Advisor
Business owners are traditionally strong willed individuals who know the direction of their business and have a strong desire to get the business to that next level. As the business grows entrepreneurs find themselves in situations where they need advice on how to grow their business as they have outgrown the knowledge base of internal employees. Internal people are still very valuable; however, their knowledge is composed of internal company experiences as opposed to external experiences. This is when a board member or an advisor is required. At BrassRock Consulting Inc. we bring the knowledge of hundreds of other businesses and work with you to devise the correct solution for your business. Further, because we are a financially independent third party the opinions voiced are honest and we are not afraid to ask the tough questions.
Acquiring a CFO
As a company grows the health of the business becomes harder to grasp because the business owner can no longer walk the plant or visit all the sites. The company has simply become bigger. As a result, the business owner is not as confident as they were historically because the tools they use to measure the business are no longer working. At BrassRock Consulting Inc. we understand this experience and will work with you to design financial reporting systems to give you back that control. The difference between us and hiring an internal CFO is simple; the business is not at a point where it needs a full time CFO yet. It’s in the right direction but it is simply not a full time requirement. We will work with you to build the systems and reports, teach you what the information means and work with you to grow the business to the point where a full time CFO is required; and then we will gladly exit stage left.
In a Turnaround
Nothing is more devastating than being in a turnaround situation. As the owner, you have built the company and one day you realize the business, the tools and the people that got you to succeed are not working. It’s a frightening spot to be in but the worst thing an owner can do is do nothing. That is, in our experience, certainty of only furthering the problem. In our experience the company could be having issues due to a multitude of reasons. For example it could be poor capital structure (no cash), lack of reporting systems and internal controls (no transparency), unmotivated workforce (no people) or loss of a major customer (no customers). The key is to determine all the issues and find solutions to each of them. We will work with you not only in helping you find clarity within the business but we will work with the banks on your behalf to explain the plan or raise alternative sources of capital (equity, mezzanine financing or subordinated debt) to help recapitalize the business and put the business back on the right path.
Whether it is raising equity, acquiring term, subordinated debt or mezzanine financing BrassRock Consulting Inc. is well versed in the subject of securing capital for our clients. The Principal of BrassRock Consulting Inc. has raised over $1.4B in transactions and our network further includes bridge capital, working capital and private capital solutions.
In our experience, the critical part of raising capital is not the amount nor the cost. The critical part of financing is do the terms of the funding match the growth of the business. We will work with you to determine what amount the business actually needs and we will handle the transaction on your behalf. Throughout the whole process you are constantly updated and once the transaction becomes solidified, we will ensure the terms are understood by all parties and ensure everyone is on the same path to supporting the business.
The path of securing capital can be vague, let BrassRock Consulting Inc. be your guide to ensure you get the right capital for your business.