Some of the best distribution companies have unified the diverse voices that make up a business into one message, both internally and externally. I call this Many Voices, One Message. The idea is a staple of the B-to-C world.
Data points in time indicate a real trend either up or down less than half of the time. By tracking trends, we can do a better job matching our expenses and cost-to-serve with the business, without fuss or emotions.
Ask the best private equity investors, or for that matter, any acquiring company such as chains, vertical convergers or platform investors – even independent distribution acquirers – and they will tell you that human capital – leadership and management – is a key factor to consider in any investment opportunity.
You are familiar with the portfolio concept if you own any kind of equity, bond, real estate or other investment fund. If you’re familiar with the major investment companies – such as Charles Schwab, Vanguard, Fidelity, BlackRock – you are familiar with portfolio strategies.
Many independent distribution companies wonder why their gross margin, net profit and attendant multiples are inferior to their $2 billion-plus sales, national-market, publicly held competitors. These competitors may have many structural advantages:
In this article, 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.