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KenSanginario
is the Founder of Corporate Value Metrics, LLC and he has developed a cloud-based tool to help business owners increase their business value by 50-100% over the next 3-5 years. Go to his website to find out about the "Value Opportunity Profile".
Exit Coach Bill Black interviews Top Advisors for Tips, Ideas & Precautions for Business Owners who want to grow and protect their company value and plan for a successful Business Sale or Transfer. Listen daily so you can be well-planned!
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April 25, 2024 Time is precious and so are our pets, so time with our pets is extra precious. That's why we started Dutch. Dutch provides 24/7 access to licensed vets with unlimited virtual visits and follow-ups for up to 5 pets. You can message a vet at any time and schedule a video visit the same day. Our vets can even prescribe medication for many ailments, and shipping is always free. With Dutch, you'll get more time with your pets and year-round peace of mind when it comes to their vet care. Welcome to the Exit Coach Radio show, the show for baby boomer business owners who are looking for cutting edge information as they plan their 3 to 10 year business succession and exit. Every week we interview top professional advisors for their best tips, strategies, and precautions so you can be well planned. And don't miss our one minute exit coach tip of the day. On exit coachradio.com. And now here's your host, the exit coach, Bill Black. Welcome and thanks for listening. This segment of the show is brought to you by Holland Company CPAs and features Ken Sangenerio, who's joining us from Westboro, Mass. Ken, welcome to the show. Thanks, Bill. I'm glad to be here. Pleasure. We're going to talk about road mapping your business to its maximum value. Sounds like a great topic. I look forward to it. And before we get into that, we always like to start by getting to know a little bit about our guests. Can you share a little bit about your background and how you got into this particular field? Sure, Bill. I've been a consultant for the last 15 years or so in our consulting practice has focused on turning around, underperforming and distressed companies, providing M&A advisory services, raising private equity and debt financing for companies. And uh performing business valuations all focused on the lower middle market, which we define as companies with revenue between 5 and 150 million. Before that I was the CFO of several companies over a span of 12 to 14 years, uh, public and private, and before that I was in one of the big accounting firms back in the early and mid 80s and in our consulting practice. Uh, I realized about 5 or 6 years ago it struck me that no matter what type of engagement we were undertaking, the front end of the process was very similar, that is to obtain a very quick and efficient but thorough understanding of our clients, and sometimes that would take a week to 2 weeks, and it occurred to me that if we had a more standardized process. Uh, of completing that we could help clients, uh, more effectively understand the strengths and weaknesses in their business. We could make the process more efficient and we could help the business owners to understand how to drive value. That's the most important part of this is how they could drive value in the future. And so that's what prompted us to start to develop this road mapping process that we now. have fully developed and are licensing to other advisors. It's really exciting. I looked at your website and your your company name is Corporate Value Metrics. I failed to mention that, but it's very exciting and I think it's gonna be of great value and a lot of success, for listeners who are saying, look, I, I wanna be able to assess this on my own time and really figure this out and get some details behind this. And so how does the um uh the value opportunity profile work? What's the, what's the steps that a business owner takes to, to take advantage of that? Sure, we have a cloud-based software application that is licensed to other advisors, CPA firms, uh, exit planners, M&A advisors, business valuators, and so forth. And so this is a facilitated process for the business owner to work with their trusted advisor. The trusted advisor takes the the owner and their management team through a structured interview process. They sit all together. It takes about a day to go through the process, and they go through a series of questions that they cover the entire enterprise. Our our process covers about 47 different categories throughout the the enterprise. And each category is scored in terms of a quality score, how well developed the company is in that area. It's all point and click easy drop down answers, and it's a, it's a very interesting and very dynamic process for the management team to go through. It's sort of equivalent to them going through, say, a half day off-site retreat where they all get together and they go through this process together, and it, it's an eye-opening experience for the management team. And they quickly realize often how disjointed they are and how they don't see the business in the same way as each other and how much work they have to do to all get on the same page and strengthen their weak areas. The application then generates a series of prioritized initiatives that the company should consider undertaking over the next 3 to 5 years. This is not a quick overnight fix. This is a process. It's a long term process for driving value in the company over an extended period of time so that when that eventual exit time comes for the business owner or the time comes when they want to transfer ownership. They will be uh as strong and healthy as they can be and, and at their maximum value. What are some of the examples of the um the, the projects that are recommended uh or the the tasks that are recommended uh after a business owner takes the, the value uh opportunity profile? Sure. One big example is we find that most companies have no fully developed strategic business plan. So they show up every day. Just trying to get through the day, do what they do, serve their customers, take orders, and so forth, make whatever they make or provide whatever service they provide, but with no long term detailed strategy of how they will grow, how they will penetrate their market, how they will gain new customers and retain their existing customers, how they will build the infrastructure to support their growth goals. They have no fully developed integrated strategy. Well, empirical evidence indicates that companies with such a strategy can be as much as 70% more successful than companies without. So one of the Very common initiatives that come out of our process is a recommendation that the company undergo a facilitated strategic planning process. And that that's a process that might take 10 or 12 additional sessions down the road with their with their trusted advisor to go and develop that type of strategic plan, but that strategic planning process often has the effect of of totally being able to reposition the company in the marketplace, drive incremental value. And really make make the company a lot more successful and have a lot more sustainable growth than they than they had before going through that process. That's one of the big areas that come out of this. That's a great example. It sounds like there's a tremendous amount of value in that so that they can get not only some feedback easily and quickly, but then uh work with it, work with their managers to To develop strategies to, uh, to strengthen the weak areas. Um, we are gonna take a quick break, Ken, we'll be, uh, right back when we ask, when we come back, we're gonna ask you to share a few stories and some tips, ideas and precautions that our listeners can use. So hang in there with us for just a minute, we'll be right back. You're listening to Exit Coachradio.com, the show for age 50 plus business owners. We're interviewing over 250 professional advisors for their tips, ideas, and precautions so you can be well planned. We upload new 20 minute interviews and 1 minute highlights every day at exitcoachradio.com. Come listen for a minute. Hi friends, do you wonder about the value of your business and how you can increase it? Well, the value opportunity profile is the only business assessment and strategic value enhancement tool that helps you use a process that upholds the standards of the business valuation profession and lets you instantly recalculate the value. For any contemplated initiative, the valueun profile is available online, and it will help you to methodically, measurably maximize the value of your business. It all begins with the VOP, the Value Opportunity profile. For more information, visit www.corporatevalue.net. Welcome back friends. Just a reminder that we've interviewed dozens of advisors on a wide variety of topics, and you'll find all of their interviews and highlights online at exacoachradio.com or on iTunes at iTunes.exacoachradio.com. And I'm talking with Kenangenario who's joining us from Corporate Value Metrics in Massachusetts. And Ken, before the break we talked about this tremendous software program that you've developed that's available on your website called the Value Opportunity Profile to help business owners do a self-assessment and then. Work with the results of that to shore up their their weak areas. And it sounds like a great tool. Um, why do business owners need a process like the VOP instead of just doing it on their own? That's a great question, Bill. I, I think for a couple of reasons. One is most business owners are so focused on kind of making the donuts to coin the phrase from the old commercial. Uh, that they fail to step back and think about what the value drivers really are in their business. They show up, they do what they do every day, they just try to get through the day's challenges, and they don't really step back to work on their business. Um, when they do think about building value, typically they think that the only way to build value is to grow sales. But what they don't realize is that often growing sales actually can decrease the value of their business because growth consumes capital and growth also adds risk to the enterprise if they are not properly developed to be able to support that growth. I've seen example after example over the years of companies that just chase sales and and never worry about their infrastructure. And when they get the sales, then they fail to provide the service that their customers expect. They run into problems with quality control, time on time deliveries and so forth, and those can really hurt the value of the business. So business owners aren't aware of the real ways, the, the more efficient ways, the more controllable and sustainable ways that they can build value, which is really to strengthen the whole infrastructure of their business. First, it's like building a building. They need to build the foundation, then they need to build the first floor before they start adding a second floor to the to the equation. So, uh, business owners just really they're not aware and actually most advisors aren't really aware that they can build value in their in their clients by helping them to strengthen infrastructure. It's a difficult equation because of course sales are unpredictable a lot of the times and The business owner just knows that if, if they get sales, then that's, if they're too busy with sales, that can be a good problem, but of course, what you're saying too is if you get too much and you're not prepared with the proper infrastructure to handle it, it can kill your business. That's right. We've seen companies that have been on the brink of failure or even have failed because they grew so fast that they weren't able to support the growth. So they, they kind of, do, do you help them to kind of think, think, well, you've got a, you've got a, a minimum and a maximum kind of a channel you need to navigate in. We know we need a minimum amount of sales and you need to, you need to certainly try to get more sales, but, um, when you hit certain benchmarks in your success with that, we need to be prepared for what our plan is going to be at that point. That's right. If they have a well-defined, uh, strategy. Then that strategy will indicate to them where along their growth path they need to add resources, how much and where in the company and how they need to have those resources trained and staffed and whether it's equipment or personnel or whatever it is, they can tell with a well defined strategy when and to what extent they'll need those resources. Now when you're Talking with business owners that are saying, you know, in the next 5 to 10 years, I think I want to prepare this thing for sale, but it's not worth enough now. How long does it take to implement some of the ideas and strategies that your reports come up with? That's a great question, and a lot of that depends on On the owner and their organization and their ability to pursue change and have the change be absorbed and stick, but we advocate a kind of a small bite approach, make small changes over a longer period of time because most organizations resist change. So we advocate 3 to 5 years to undertake a sort of methodical disciplined approach to improving the company and driving value. If they try to go too fast, their organizations will, will reject the changes and they won't stick, um, so we, we, we advocate that they plan a long term implementation. It's more of a almost like a lifestyle change. If you think about people that ah in their personal life they want to go through and become healthier. If they do a crash diet, it just doesn't. Last very long, but if they change their lifestyle slowly over a longer period of time, it tends to stick better. It's the same in companies. That's a good point. And, uh, if someone were to start and go to your website, uh, what would they find there as kind of a first step towards taking the, the tests? Is there, are there a lot of resources on your website? We have a number of articles that we've had published, uh, that could give them some good background and understanding of why this is such an important process. We have a sort of a short form demonstration of our of our process on the website and then we have some links where they can they can sign up for a webinar. We have webinars every week. They last about an hour where we go through sort of a lot of the business dynamics that are occurring out in in the in the marketplace, in the lower middle marketplace right now why it's so important for them to undertake this type of a process. And then we give a demonstration of what our process is and it's a pretty thorough demonstration so they can really learn what to expect uh uh in terms of the process and the results and And then we're always available by phone or or for private consultation if anybody wants to get more information from there. So a lot of resources that we can provide. Perfect. So business owners out there, if you really want to learn about the metrics of your company and how to grow it and, and really do a self-assessment on that, go to corporate Value metrics at www.corporatevalue.net. That's corporatevalue.net. Check out the resources and tools that are there, and if you really have some questions about it before you undertake the uh the survey, then give Ken San Jaario a call. Ken, thanks very much for joining us today, and what's the best number for people to reach you at? The number is 508-870-5805. Ken, I, I really appreciate you coming on and and talking with our listeners about what you do. I think it's very fascinating. I'd like to talk to you maybe at some point in the future and go more deeper into one of these reports and plans and, and, uh, really help people understand what's in there. That would be great, Bill. I'd, I'd really welcome that and I appreciate the opportunity to join you today. Thanks very much. I've been talking with Ken Sangenio of Corporate Value Metrics LLC. We're gonna take a short break and we'll be right back, so please stay tuned. You're listening to Exit Coachradio.com, the information station for age 50 plus business owners, where we're interviewing over 250 top advisors for their best tips, ideas, and precautions so you can be well planned. We upload new one minute tips every day. Exitcoachradio.com. Come listen for a minute. Thank you for listening to Exit Coach Radio. Time is precious and so are our pets, so time with our pets is extra precious. That's why we started Dutch. Dutch provides 24/7 access to licensed vets with unlimited virtual visits and follow ups for up to 5 pets. You can message a vet at any time and schedule a video visit the same day. Our vets can even prescribe medication for many ailments, and shipping is always free. With Dutch, you'll get more time with your pets and year-round peace of mind when it comes to their vet care.
