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As a leader, it is important to explicitly communicate what you expect from your team. One of the ways we do so effectively is by setting goals. Overly simplified, goals align mission, vision, resources, and personnel. When talking goals you will generally be taught good ones include an objective, a quantifying metric, and a timeframe. This framework allows management to organize and plan, while also providing explicit tasks to employees. But something is missing because this framework does not address the volatility of the world in which we operate. The forces that shaped the landscape you crafted your strategy in are likely to change. So how do your employees address change while also executing your strategy as intended? Simple, include a new element in your goal framework: Your intent. Traditional Goal Setting Let’s look at goal setting through the lens of something more relaxed in a home setting. You are having company over for dinner to celebrate a birthday. Between cleaning, work, and many other tasks that require your attention you are spread thin so you delegate the shopping to your son and daughter. Their goal: Purchase enough food to cook for a group of 10 by 3pm. This is a good goal. You gave them an objective (purchase food to cook), a quantifying metric (enough for a group of 10), and a timeframe to complete the goal (by 3pm). With this information, your children can go off to the store while you manage other areas of interest with the assumption that you will be able to begin cooking at 3pm. So you think. The world is a volatile place where change is the only constant and anything that can go wrong will go wrong. Well today is no different and a truck crashed into the only grocery store in town, closing it for the rest of the day. As one would expect, your son and daughter come back to you so you may solve the problem for them. Now some task must suffer while you determine how you will feed your guests. If only there was a way they could have solved this problem on their own. Goal Setting With Intent Let’s revisit that goal we made earlier and add our intent: Purchase enough food to cook for a group of 10 by 3pm. The intent is for our guests to be full no later than 7pm. Now, when your children arrive at the grocery store and see it will be closed for the day they are not hung up on finding food to cook. Instead, they make a detour to a local restaurant and place an order for catering to be delivered to the house at 6pm. Knowing the intent of their goal has equipped them with the information needed to take individual actions that solve the problem. All without ever having to bother you. Adding intent to a goal is not a new concept; the military uses it all the time. Yet I do not see it included in nearly enough business strategies. Employees who know what to do are great, but employees who know why they’re doing what they’re doing are infinitely more valuable. Next time you are assigning goals, include your intended end-state and watch the decision making capabilities of your team increase exponentially.

While working at Sellside Group, I've gained a great deal of experience in the world of mergers and acquisitions (M&A). The practice is industry agnostic and can occur in any sector. Although M&A deals share similar objectives, each deal is unique. Several factors influence each deal, such as the companies' size, operations, owner's desires, and the economic landscape of the specific industry. Sellside Group's leadership team is truly exceptional. From our CEO, David Weiss, to our Managing Directors and M&A Director, Jake Kitka, they are dedicated to educating and empowering everyone on the team about M&A. Thanks to their guidance and support, I had the opportunity to play a critical role in a sell-side transaction for a commercial facilities maintenance client in the southeast United States. Working closely with the client and my colleagues, I was able to source a strategic buyer with a robust acquisition-based growth strategy. This transaction ultimately resulted in a successful transaction for our client, which played a key part in my finishing 2022 as the top revenue-generating intern. Here are a few valuable pieces that I learned about M&A: The M&A Process Many executives consider implementing an M&A strategy to either grow the value of their business or exit the company, but what exactly does the M&A process entail? Developing a Strategy The first piece of the process is developing an acquisition strategy by leadership within the business. While doing so, it is important first to consider the purpose of the transaction—is leadership looking to exit the company, are they seeking a capital infusion through an equity sale, are they positioning to enter a new market, or is the company aiming to offer new products or services? These are all things that need to be considered before testing the market. Valuation On the sell side, leadership should take action to make their company as attractive as possible to potential buyers. A few things they should do are make sure they can clearly articulate the company's culture and the management team's succession. Leadership should also prepare their current financial statements and make adjustments, such as adding back one-off costs or inflated owner salaries, to the EBITDA, as a multiple of the EBITDA is often used during the valuation process, among other tools. After current financials are in order, the company should generate pro forma financial statements to show a positive operating runway to potential buyers. It is also important to consider what type of deal the owner is willing to accept—do they want to stay on board with the company after the sale? Do they want an immediate exit from the company? Do they want an advisory role? How do they want their payout structured? All of these aspects can make or break a potential fit as they can each dramatically change the overall appeal of an offer and are particularly important for family businesses as this can add another level of stress to the process. There are many similar themes on the buy side compared to the sell side. Leadership should start the process by developing a strategy for the acquisition. Each strategy can look very different based on the company type and the acquisition's nature. For example, a private equity firm may be looking to build out their portfolio in a general industry but may not have the expertise or desire to step into the industry and help run the company, while on the other hand, a strategic buyer may be looking for a particular industry fit as they want to be involved in the day-to-day operations and steer the company in a specific direction. These differences greatly influence the offer structure the company desires to submit. They should also build a budget for the deal. While it is impossible to know the exact transaction cost in the early stages, the company should know how much they are willing to spend. This will allow them to narrow down the companies they are searching for and act quickly, as a company's EBITDA can give them a ballpark estimate of its valuation. Target Identification After the strategy is set, the search for potential targets begins. In this stage, privacy and secrecy are paramount as competition can gain useful insight, giving them a strategic advantage. To protect themselves, companies often hire 3rd party firms to represent the company and maintain anonymity while facilitating the search for a suitable target on either the buy or sell side. Typically, the 3rd party company can source and vet potential companies to buy or sell the client company to. During this process, meetings are held with the candidate's leadership and the 3rd party company to determine cultural fit. Once this has been established, the potential counter company will be provided with a non-disclosure agreement (NDA) and a confidential information memorandum (CIM), which conveys valuable information about the client company, such as customer concentration, notable vendors, financial statements, business structure, a market analysis, industry analysis, end market breakdowns, and other information to help determine if the company would be a good operational and strategic fit. A good CIM tells the story of a business and illustrates why it may be an attractive investment. Following the delivery of the CIM, it may be determined that a site visit is in order. Here, the 3rd party company can organize an in-person visit between the client and counter business so they can get to know each other and better understand how the company operates on a day-to-day basis. After the CIM is reviewed and meetings are held, the buying company will submit a letter of intent (LOI) outlining the purchase price, payout structure, and other terms the company agrees upon to close the deal. The entity receiving the LOI can negotiate the terms of each LOI and ultimately decide which they want to accept. Due Diligence & Closing Following the acceptance of an LOI, the purchasing company will go into the due diligence phase, where there is a thorough investigation and analysis of the target company that another company is considering purchasing to assess risks and opportunities and verify the accuracy of information provided. After carefully considering legal documents, financial statements, employee contracts, and customer and supplier relationships, the purchasing company can proceed with the acquisition and determine an appropriate valuation and terms for the transaction. Post-Merger Integration The final stage of an acquisition is commonly overlooked. Post-merger integration encompasses the integration of two or more companies involving each company's people, processes, cultures, and systems. Without proper integration, the acquisition is bound to fail as there is culture clash and inefficiencies across operations, which prevent the deal's potential value from being harnessed. Practical Experience: Finding the Right Buyer for a Sell-side Client I was part of the sell-side transaction for a commercial facilities maintenance client in the United States. The company I sourced, has an acquisition-oriented growth strategy. This type of strategy allows a company to quickly gain access to a new market by acquiring a business already operating in that market and allowing the company to quickly start providing services to the new market that otherwise would take years to implement competitively. These benefits can make an acquisition-based growth strategy more attractive to business leaders than an organic growth strategy. In this case, the company acquired our client and now has a strong presence in a new geographic region. While it may be capital-intensive upfront, the benefits to a company's top line and long-term strategic positioning outweigh the costs of tying up cash or onboarding additional debt. The Bottom Line As a business leader, you're tasked with taking all relevant factors of the environment into account and steering the business on a track of growth toward success. Each company has its path and a unique picture of what success looks like to them. The potential benefits of implementing an acquisition strategy are constant across nearly all companies. If performed successfully, an acquisition can allow a company to pivot and overtake competitors, and the transaction can become invaluable to the firm. While this strategy is not for everyone and may not work for every business, middle-market executives are responsible for learning about and considering how an acquisition or exit strategy could impact their business.

As an intern at Sellside Group, I have gained invaluable experience in the consulting industry and the business world. I have also had the privilege to see firsthand the behind-the-scenes of what employers look for in their interns. As a college student, the ladder of the three is an essential tool to be able to fine tune our CVs and make ourselves more competitive on the job market. At Sellside, I have the opportunity to speak and work indirectly with an abundance of 35 seasoned executives, including Marinus Ferreira and Michael Burress, whom I both want to thank for their continuous support and guidance. Because of the close contact I had with Marinus Ferreira when we worked together on Project New Roots , I decided to interview him with a student's perspective on his intriguing past to not only get to know my coworker better, but to learn from him. How have your childhood experiences carried onto your work today? Growing up in Secunda, a small town in South Africa named after Sasol's second extraction refinery plant (hence Secunda) to a hard-working family, Marinus gained a wealth of values. Integrity, honesty, and determination, he says, are the values which he still carries with him in the business world. In fact, in Marinus' household, failure was not an option if you have determination. You have extensive experience in the Petrochemical, Oil & Gas, Metals and minerals sectors. Do you believe your academic background helped you throughout your career, and do you believe that in today’s world, someone seeking employment in the Petrochemical, Oil & Gas, Metals and minerals sector should have such a background? Marinus learned the basics of accounting and finance in high school, which was enough to land him his first entry-level accounting job. While he doesn't necessarily believe that a degree is necessary, he places a strong emphasis on the importance of education and strong moral values. According to Marinus, having strong values like honesty, hard work, and respect, which he learned from his family, can take you far in life. He believes that even though these values may seem obvious, "common sense is not always that common," and stresses the importance of treating everyone with respect, regardless of their social status. To answer my first question, Marinus emphasized the importance of his gap year, which revealed his dislike for repetitiveness in a job such as accounting. He says, "Take chances, bet on yourself when the world won't bet on you. You must only convince yourself that you can make it (which is the biggest struggle)." For Marinus, risk-taking and determination are some of the most important attributes that a person should display, not necessarily a degree. New entrepreneurs lack confidence, he says. The main concept of starting a company shouldn't be about making money. If you find a job you love you will never work a day in your life. People start businesses for the wrong reasons. Always try your best, enjoy the experience and be willing to learn as there is always something to learn. In terms of landing an entry-level job, from a student's perspective, Marinus says that interviews should just be a conversation. Seek interest in what they're doing and if it starts being a conversation you are on the right path. The key, according to Marinus, is to have a positive attitude and a willingness to learn: "if I fail, I'll try better the next time". As an employer, accountability is the best thing in life to work with, so become accountable for your actions and learn from your mistakes. A hot topic for the new generations, when it comes to seeking jobs, is to find their passion. What got you into the staffing industry, and did you pick it up as a passion? Why did you choose the staffing industry. Marinus, who hails from South Africa, where unemployment is currently at 42%, knows firsthand the importance of taking whatever job opportunities are available. However, he also recognizes the satisfaction that comes with being able to provide employment to others and contribute to their ability to support their families. He sees this as a very fulfilling aspect of his job. For him, finding his passion was more of a journey than a goal. Marinus likes to follow the proverb, "We have two ears and one mouth so that we can listen twice as much as we speak", and only through listening can you learn more and inch towards finding a passion. Regarding Thusanyo Project Services, if you were to tell a recruiter what your leadership style is, what would it be? Lastly, what excites you the most about where Thusanyo Project Services company is heading? What are the biggest challenges you face during these times of high inflation and interest rates? The approach Marinus found most success with is "I'll employ you and leave you work". It is hard and inefficient to upskill and micromanage everyone within a company. If you are hired, you are expected to do the job. Instead, people must find their own way, and getting kicked in their pool is the best way to learn. You must allow people to make mistakes to learn, otherwise they will be stuck in the same place. A very exciting aspect about Thusanyo, says Marinus, is that we always have to evolve and show resilience. A recent example saw the company import labor into Bermuda due to high cost of capital caused by a recent increase in the minimum wage. In terms of the high interest rates, Marinus believes that Thusanyo has been able to deal with it in the past as interest rates are always high in South Africa. In fact, Marinus announced that "[Thusanyo] grew a lot this year, and we opened in the US, and very excited to bring in international niche and leadership". He firmly believes that the US recession will be a big opportunity for them, as less permanent employment means more temporary employment. It will be essential, in the coming months, to allow clients to understand their culture. Marinus wants to elevate and assist their clients.

In the ever-evolving landscape of global business, companies face unprecedented challenges to maintain their competitive edge and drive exponential growth. Amidst this dynamic environment, an M&A (Merger and Acquisition) based growth strategy has emerged as a compelling avenue for businesses seeking to achieve above-average growth rates. By strategically combining forces with other companies, organizations can unlock new opportunities, synergies, and scale, enabling them to propel their growth trajectory to unprecedented heights. In this thought leadership piece, we delve into the compelling reasons why M&A acquisitions lead to remarkable growth rates and showcase notable success stories that exemplify the transformative power of this strategy 1. Synergy and Scale: At the heart of M&A acquisitions lies the promise of synergies and scale. By uniting complementary strengths and resources of two or more entities, organizations can create a powerful force that supersedes their individual capabilities. These synergies manifest in operational efficiencies, cost savings, and optimized processes that significantly enhance overall performance. A compelling example of this concept is The Walt Disney Company's strategic acquisition of 21st Century Fox in 2019. Through this merger, Disney bolstered its content library, streaming capabilities, and international presence. The integration of these assets catapulted Disney into a dominant position within the media and entertainment industry, driving exceptional growth and reinforcing its status as a global entertainment powerhouse. 2. Market Diversification: In today's interconnected world, market diversification is an essential aspect of sustainable growth. M&A acquisitions allow companies to expand into new market segments or geographic regions, thereby reducing dependence on a single market and mitigating risks associated with market volatility. An exemplary case is Amazon's acquisition of Whole Foods in 2017. By venturing into the grocery retail sector, Amazon diversified its revenue streams and established a strong presence in brick-and-mortar retail. This bold move not only contributed to Amazon's impressive growth but also solidified its position as an innovation-driven industry leader. 3. Innovation and Talent Acquisition: The pursuit of innovation is a driving force behind any organization's quest for long-term success. M&A offers a unique avenue to infuse companies with fresh ideas and cutting-edge technologies that position them at the forefront of industry evolution. Moreover, acquiring companies can access a pool of talented employees whose expertise and vision can fuel innovation within the acquiring organization. A standout illustration of this dynamic is Facebook's acquisition of Instagram in 2012. By integrating the rapidly growing social media platform, Facebook tapped into a novel avenue for growth and established a more comprehensive social media ecosystem. This strategic move was pivotal in Facebook's sustained growth and global influence. 4. Speed to Market: In a rapidly changing marketplace, speed is of the essence. M&A acquisitions present a strategic advantage by enabling companies to swiftly enter new markets, access new customer bases, and gain competitive advantages without the protracted timeline associated with internal product development. A striking demonstration of speed-to-market is Microsoft's acquisition of LinkedIn in 2016. This landmark move fortified Microsoft's presence in the professional networking and HR solutions space, fast-tracking its expansion in the enterprise sector. While M&A-based growth strategies hold immense potential, companies must approach them with due diligence, meticulous planning, and thoughtful integration. The success of such endeavors hinges on comprehensive risk assessments, cultural alignments, and a shared vision for the future. In conclusion, the art of growth lies in making bold and visionary decisions, and M&A-based strategies provide a compelling framework to achieve above-average growth rates. By harnessing the power of synergies, diversification, innovation, and speed, organizations can navigate the complex business landscape with confidence and capitalize on untapped potential. As companies embrace M&A as a transformative growth catalyst, they embrace the promise of unleashing unparalleled growth, driving industry disruption, and redefining their place in the global market. The journey toward exponential growth begins with a strategic vision and an unwavering commitment to harnessing the power of collaboration and integration. Are you ready to embark on this transformative path to success?

Typically, it is not better product knowledge or more training on their sales process. These are the basic tickets to entry. What separates the successful from the unsuccessful is courage and how they spend their time. As a sales person, how you spend your time and who you spend your time with is totally within your control. Do you want to spend it with a customer that only has the potential to buy a small amount from you or do you want to spend it with a customer that can buy a large amount from you? Many sales people are intimidated to meet with big customers. The reality is the buyer at a big customer is the same person at a small customer. That buyer likes to do the same things in their free time, they love to talk about their families, their favorite hobbies and teams, and they have the same issues and problems at work and home. The only difference is the quantity that they order. It is your choice who you spend your precious time with. Be courageous!

The material handling equipment industry is a niche, complex and fast-growing sector, with many stakeholders involved in its planning, implementation and maintenance. With rapidly evolving technologies and demands, keeping up with all of the latest trends and findings becomes increasingly difficult. Based on my research and conversations with R.J. Safranek , Managing Director at SellSide Group , I aim to provide an overview of some major challenges and solutions facing the industry today. Status Quo There are a number of problems that can arise in the material handling equipment industry, including: Equipment costs. The cost of manufacturing and transporting products has risen over time, which means that customers are paying more for their goods. This is due to factors such as higher fuel prices, higher wages and insurance premiums for employees (which have increased due to health care reform). Higher costs have an adverse impact on EBITDA especially if you are a privately owned company with limited resources. Inflation and an unstable economy can create a challenging pricing environment for material handling companies. This can make it difficult for companies to price their services competitively and can lead to decreased profitability. Lack of skilled labour. With baby boomers retiring from the workforce in recent and coming years, there's been a shortage of skilled workers who can fill these positions--and this shortage will continue into 2030s due to demographic shifts in our country's population makeup (more older Americans) as well as technological advances like robotics replacing certain tasks previously performed by humans at work sites around the world today! Labour costs are a significant challenge for many material handling companies. Skilled workers are often in short supply, and companies may struggle to attract and retain qualified employees. This can lead to increased costs for training and turnover, as well as potential delays in completing projects. The rise of e-commerce has put significant pressure on this industry. Customers increasingly expect quick and immediate delivery of their orders, which can be challenging for material handling companies to accommodate. Additionally, trucking challenges such as driver shortages and rising fuel costs can make it difficult to transport goods efficiently. Alternatives Automation technology. The use of automation in material handling equipment has been a major trend over the past decade, and it's expected to continue growing as companies look for ways to improve efficiency, reduce costs and combat a diminishing labour pool. The advantages of automation include: increased efficiency - automated systems can move materials faster and more precisely than human workers can; reduced labour costs - automated systems don't require salaries or benefits, so they're cheaper than hiring people. By embracing new technologies like AMRs, AGVs, and robotics, companies can improve efficiency, reduce errors, and stay competitive in an increasingly challenging market: AMRs , or autonomous mobile robots, are becoming increasingly popular in the material handling industry. The main difference between an AGV (automated guided vehicle) and an AMR is that AMRs use free navigation by means of sensors or lasers, while AGVs are located with fixed elements such as magnetic tapes, magnets, or beacons. This means that AMRs are more flexible and can adapt to changing environments more easily than AGVs. AMRs can be used for a variety of tasks, from transporting materials to performing inventory checks. AGVs have been around for a while and are still used in many material handling applications. These vehicles are programmed to follow a specific path and can be used to transport materials throughout a facility. They are often used in manufacturing plants and warehouses to move materials between different stages of production. Robotics are also becoming more common in material handling applications, particularly in picking applications. Companies like Locus Robotics are using robots to help workers pick items more efficiently and accurately. These robots are equipped with sensors and cameras that allow them to navigate through a facility and locate items using barcode scanning or other technologies. By automating the picking process, companies can reduce errors and improve efficiency, ultimately leading to cost savings and improved customer satisfaction. Good to Picker solutions. Goods-to-person (GTP) solutions are a modern order fulfilment approach that combines automated storage and retrieval with precise, ergonomic selection methods. Some benefits include: Goods to Picker solutions can increase efficiency and accuracy of the picking process by eliminating wasteful walk time and offering accurate inventory and pick data. This can lead to a reduction in order errors and an increase in operational uptime, as well as improve overall customer experience. Goods to Picker solutions are easily scalable to match growing demand or an increase in SKUs , and can be integrated with other automation technologies and warehouse software for even greater efficiencies. This can help businesses optimize space utilization for a small footprint and flexible layout, and easily increase capacity by adding robots, modules, or workstations with little to no downtime. Warehouse Management Software solutions. Understanding the benefits of a warehouse management system is critical for growing firms. A warehouse management system can tremendously help growing enterprises with on-hand goods (WMS). By monitoring work processes at multiple levels, boosting productivity, and increasing asset utilization, the WMS will improve their operational efficiency for both labour and physical space. Implementing a WMS can help businesses streamline their warehouse operations, reduce inventory carrying costs, and improve customer satisfaction. With a WMS, businesses can automate and optimize many warehouse processes, including inventory tracking, order fulfilment, and shipping. WMS software can provide real-time visibility into inventory levels, order status, and warehouse operations, which can help businesses make data-driven decisions that improve efficiency and reduce costs. By having a better understanding of their warehouse operations, businesses can better allocate resources, optimize order picking, and improve overall warehouse performance. Final Thoughts The material handling equipment industry is constantly evolving, so it's important to stay on top of the latest trends. As you can see from this article, there are many issues that need to be addressed within this field. However, we have also seen some solutions that have been put into place and have helped improve the overall efficiency of how we store and transport products. As I continue my journey in further exploring this field, I will undoubtedly encounter more problems and solutions along the way! From A Student's Perspective

The recent collision of rapidly rising interest rates causing the banking sector meltdown is creating a Perfect Storm for Middle Market owner/operators. Interestingly, the flipside of this Perfect Storm may also offer the last best hope to sell a quality middle market company at fair value for some time to come. The Federal Reserve is charged with the dual mandate of stable prices (i.e., control inflation) and maximum employment. With recent inflation rising well above the Fed’s stated goal of 2%, starting in May 2022 they began rapidly raising interest rates. Although inflation is slowing, the action taken by the Fed had the adverse impact of creating a “run on the banks”. Silicon Valley Bank (SVB) may be the first bank to fail this time but we have not seen the end yet. The Fed, Treasury and FDIC quickly responded to the “systemic risk” posed by SVB but there remains uncertainly by depositors particularly with regards to local and regional banks. The net effect of the recent bank failures is putting enormous depository pressures on all local and regional institutions while they wait for new more rigorous regulation and capital requirements. There is already a steady “run” on the deposits of these institutions that will continue unless (and until) the Federal Government takes the bold step of providing a full guaranty of all deposits, regardless of size. Given the requirement that such a step will need strong bipartisan support in Congress this is unlikely to happen anytime soon. Taken together these factors do not bode well for middle market companies. A credit crunch and likely recession is looming. Any company that borrows money will see their operating profits squeezed as interest expense goes up. Middle Market companies, without access to the Commercial Paper market, rely heavily on local and regional banks for their working capital and other borrowing requirements. As these institutions respond to depository pressure, more stringent government regulation and higher capital requirements borrowers will face reduced credit availability, tighter borrowing restrictions, calls for greater capital contributions to their businesses and recessionary pressures. These same market dynamics adversely impact Private Equity firms, forcing them to pull back on purchase price multiples being offered for deals. Despite all these stress points the overall conditions suggest the current time may offer the best opportunity for middle market companies to move quickly towards a successful sales transaction. Interest rates are not likely to significantly fall in the near future. The shock to the banking system needs time to play out. In the interim middle market companies will be hard pressed to maintain operating profits without owners making significant capital contributions taking up the shortfall from the banks. There is a truism in finance that “Time is the enemy of all IRRs”. A strong case can be made to middle market business owners and Private Equity firms that Now is the Time to consider a sale of their company.

One of the best ways a leader can execute a strategy and supercharge a company’s growth is to lead by example. This simple strategy earns you the respect and trust of your team. When I joined NCH in 2009 as the CEO of Asia, I knew that I would be managing 450 sales people. I was transitioning from owning an advertising agency to running a specialty chemical company and I wanted to earn the trust of the team. I learned the sales process, went out in the field and opened up 100 new accounts in 30 days. This gave me tremendous credibility when working with the sales teams in Asia. Each manager that I hired regardless of their title, had to learn our process and go out in the field. As a management team we knew what the sales people went through every day and were able to develop a strategy for success that the team believed in because we were able to go out and do it. I have had the pleasure of working with some amazing teams in APAC and the US and they have 3 things in common. They all work really hard, have great attitudes and lead by example.

As the world of product distribution is becoming ever more saturated, distributors are looking for ways to differentiate themselves from their competitors as a way to attract more customers and bolster profitability. This has sparked the emergence and success in the past few years of value added distribution or VADs, which I believe will continue to grow and become much higher in demand among private equity firms and strategic buyers in the near future. To start off, these types of firms generally equip the conventional modern-day business model of a traditional distributor, buying in bulk from manufacturers and reselling at higher price to retailers, while also providing basic logistical and informational support. However, in addition to these services, VADs provide additional services to their customers, such as services regarding setup and assembly, product development, product modifications, repairs, etc. With the development of technology we can see these services developing further, with new technologies in regards to building automation and software enabling distributors to incorporate more abstract services such as asset usage tracking and advanced inventory management solutions into their distribution practice, helping to efficiently develop their supply chain operations and boost their customer experience. This is seen in a survey conducted by the IDC, where they found that 62% of the sampled distributors prioritized the increased adoption of modern day technology to boost the innovation and efficiency of value-added services. Pointing to their end goal of one upping their competition which will provide long term benefit regarding where they stand in the market. This has prompted a recent surge in M&A activities, with many companies and private equity firms taking up a deep interest in VAD’s as they prove to be a hot business model. This, for example, can be seen in a recent M&A update released by a prominent middle market investment bank regarding the specialty chemical market. They found that due to the recent ESG (Environmental, social, and corporate governance) wave taking over the chemical production industry, companies are starting to put more emphasis on sustainable and environmentally friendly production, increasing demand for more localized production, which will result in increased benefit for value-added distributors as they are no longer competing against the prices of offshore distributors and could see more logistical benefits as well as overall demand as their value added services put them above other distributors in the pecking order. This is hugely responsible for the increased consolidation seen regarding VAD’s as these benefits are largely valued by not only private equity firms, but also other distributors, as they look to expand their distribution capabilities. However, prior to executing a M&A deal, VAD’s must consider a multitude of factors as completing a merger or acquisition can’t be justified as simply forming a partnership as a way to grow your business. It is important to consider the effects the other party your merging or acquiring will have on your services, as it specifically can pose a high risk to your value added services as attention to the quality and execution of these services can be unproportionally shifted to the services provided by the other company taking part of the M&A deal. In addition, these services are at risk of being diluted or disregarded during the integration process, which is why it’s ultimately important for VADs to formulate an understanding of how their value-added services will be treated and integrated post merger or acquisition. From experience, working as an intern at Sellside Group, the emphasis put on the desirability of VAD’s offers anecdotal evidence pointing to the markets higher demand of these types of firms. This paired with their intrinsic leg up on traditional distributors makes it fair to assume that we will see a consistent growth in the popularity and capabilities of these firms as well as increased M&A activity in the near future as these high-demand businesses weigh their pros and cons in their pursuit of maximizing their potential.

Deciding to part ways with your business is a mentally, physically and emotionally challenging decision. The process is rarely clear, the future is foggy, and emotions run high. Family, friends and shareholders all want their say and often hold competing opinions. One of the top questions a business owner struggles with throughout the process is, "When is the right time to sell?". The "right" time to successfully exit typically resides at the intersection of the performance of the business, the performance of the economy, and your own personal goals. I have had the privilege to work with many business owners as they navigate these waters. I have also represented buyers and understand what they demand and take into consideration when looking to acquire. With this unique perspective, I have prepared a guide to help business owners make informed decisions. By taking a methodical and objective approach to the decision-making process, you can ensure that you're well-prepared to navigate the complexities of a sale and achieve the best possible outcome for yourself, your business, and the people who depend on you. The Business Profitability Prospective buyers will assess whether the business generates consistent profits and achieves desirable financial performance. Thus, the profitability of your business is the number one influence on valuation during a sale. Higher profitability translates into a higher valuation because most businesses are valued based on a multiple of EBITDA. Therefore, your EBITDA is your starting point and everything else covered in this article influences the multiple placed on your EBITDA. A strong track record of profitability indicates the business's ability to generate sustainable earnings. Typically, buyers will analyze a trailing twelve month (TTM) EBITDA, where more recent months carry greater weight. It is important to note that the majority of buyers will not consider forecasted EBITDA. While a strong forecast will influence the multiple, it will not serve as a starting point for buyers. In addition to evaluating the overall profitability, buyers and valuation experts will consider certain adjustments known as add-backs. These add-backs include owner compensation that exceeds a typical CEO salary, which is regarded as a discretionary expense. Such adjustments recognize that the owner's compensation may be higher due to their dual role as owner and executive. By adding back this excess compensation, the true earnings potential of the business can be accurately reflected, resulting in a higher valuation. Furthermore, one-time costs or expenses not expected to recur in future years may also be considered add-backs. These expenses could include consulting fees or special expenses incurred by the owner, such as personal expenses that are not directly related to business operations. By excluding these one-time costs, the add-backs reflect the normalized earnings of the business and enhance its profitability, consequently increasing its valuation. It is crucial to present a clear picture of profitability and highlight any relevant add-backs that can improve valuation. By demonstrating consistent profitability and justifying add-back adjustments, you position your business as a desirable investment opportunity for potential buyers, maximizing its value in the marketplace. Revenue The next most important aspect hitting valuation is revenue, but not all revenue is viewed the same. Understanding the impact of recurring revenue versus project-based work on valuation is crucial. Recurring revenue, particularly through scheduled maintenance contracts, holds immense value in the eyes of potential buyers. If your business has established contracts for scheduled maintenance, this significantly enhances its valuation. These contracts provide a steady and predictable income stream, showcasing the reliability and stability of your business to prospective buyers. The longer the duration of these contracts, the higher the potential for increased valuations, as they demonstrate long-term customer relationships and revenue sustainability. On the other hand, project-based work introduces a certain level of risk for buyers. When evaluating project-based revenue, factors such as project size in terms of monetary value, project length in time, and the type of work involved come into play. By its nature, project work is often perceived as more uncertain and volatile than recurring revenue streams. As a result, buyers may view new construction and one-off retrofit work as riskier due to its reliance on securing individual projects and the potential for fluctuations in revenue. However, it's important to note that project work can also offer opportunities for growth and profitability, depending on the specific market and industry dynamics. Acknowledging the interplay between recurring revenue and project-based work is essential when assessing the value of your services business. By recognizing these dynamics and positioning your business accordingly, you can make informed decisions about the ideal timing for selling your business and maximizing its value in the market. Customers Another crucial aspect impacting valuation is the nature of customer relationships. Strong connections with customers enhance the business's worth, indicating loyalty and recurring revenue. Conversely, weak ties raise concerns and lower valuations. It's important to determine who owns these relationships and ensure their transferability. Skilled management or technicians staying with the business post-sale instill confidence in customer retention. The composition of customer relationships also matters. Relying on third-party intermediaries like general contractors or help desks/dispatchers requires evaluating partnership strength and reliability. Consistently winning projects with contractors and maintaining long-term agreements with help desks/dispatchers can positively influence valuations but still do not carry the same weight as direct customer relationships. Customer concentration is an ultimate factor impacting valuation of the business. Heavy reliance on one or just a few customers raises risk and greatly reduces not only valuation but also interest of many buyers. Diversifying the customer base mitigates risk and should be a top priority. Strive for no single customer contributing over 17% of total revenue. End markets where customers operate also impacts valuation. Buyers seeking to enter or expand in the markets you serve value businesses higher— buyer reservations or volatility in your target end markets lower valuation. Understanding market dynamics helps position the business strategically and attract the right buyers. Assessing customer relationships, concentration, and end markets maximizes the valuation of a services business. Mitigating concentration risks and aligning with attractive end markets position the business for a successful sale at its true market value. Organizational Design Several key factors come into play when evaluating the organizational structure of your services business for a potential sale. First and foremost, the transition timeline regarding the owner's involvement is a critical consideration. Different buyers may have varying preferences regarding how long they expect the owner to stay in the business post-transaction. While some buyers may require the owner's presence for several years to ensure a smooth transition, others may only want a shorter period to observe a successful handover. Understanding and aligning these buyer preferences with your plans will facilitate a more harmonious negotiation process. The need for the owner’s involvement in day-to-day operations is a major aspect that impacts the transition timeline and valuation of the business. Buyers will assess the extent to which the business relies on the current owner for its daily operations. If the business is highly dependent on the owner's involvement, it can lengthen the transition timeline and potentially raise concerns for buyers. On the other hand, if the business has a capable and empowered leadership team in place, with individuals who can step up into more senior roles, it enhances the value and attractiveness of the business. A strong leadership team not only reduces the perceived risk for buyers but also indicates the potential for the business to thrive under new ownership. Moreover, the revenue-generating capabilities of your team plays a significant role in valuation. Buyers will assess the presence and effectiveness of sales representatives in winning new business. If the business has proactive and successful sales reps who consistently bring in revenue, it positively impacts the valuation. Conversely, if there is a lack of adequate sales representation, valuation suffers. Similarly, the quality and availability of skilled service technicians should be considered. The ability to attract and train new talent is crucial, demonstrating the business's capacity to grow and adapt. Additionally, whether service technicians are direct employees or subcontractors can influence the valuation, with direct employees typically commanding a higher valuation due to greater control and stability. Assessing the organizational structure of your services business is essential when preparing for a sale. By addressing these factors and positioning your business with capable leadership and revenue-generating mechanisms, you increase its appeal to potential buyers and pave the way for a successful transition. The Economy Understanding the state of the market and the overall economy is vital when considering the sale of your services business. Evaluating the sensitivity of your business to economic changes can provide valuable insights into its stability and future prospects. One aspect to consider is the relationship between your customers and the end markets they operate in. Assessing whether your customers' industries are more or less affected by economic fluctuations can help gauge the potential impact on your business's performance. Industries with higher sensitivity to economic changes may introduce greater volatility and risk to your business, potentially impacting valuation. Another vital factor to consider is the availability and cost of labor. Labor market conditions can have a direct influence on the operations and profitability of your business. Therefore, understanding the labor market dynamics, such as the availability of skilled workers and prevailing wage rates, is crucial for assessing the potential risks and opportunities associated with your business's labor requirements. Evaluating the broader economic outlook is also critical. An analysis of whether your end markets are expected to experience growth or decline can provide valuable insights for potential buyers. Buyers who perceive positive growth in your end markets place a higher valuation on your business. Conversely, if your end markets are anticipated to face challenges or decline, it may lead to a lower valuation due to perceived risks and limited growth potential. Furthermore, buyers want to see a track record of success. Therefore, if your business has experienced 3+ years of consistent growth the timing may be optimal- especially if the future looks grim. Unfortunate as it may be, even a single down year can influence a buyer to lower valuation or even walk away from the deal out of fear. By carefully considering the sensitivity of your business to economic changes, the characteristics of your customers' end markets, labor market conditions, and the overall economic outlook, you can provide potential buyers with a comprehensive understanding of your business's position within the broader market. This analysis enables buyers to assess the future prospects and potential risks associated with your business, ultimately allowing you to strike while the iron is hot. Personal Goals The business owner's personal goals play a profound role in the decision to sell a services business. One key consideration is the possibility of the next generation taking over the business. For owners with family members or individuals within their organization eager to assume ownership, the opportunity to pass the torch can hold significant sentimental value. The prospect of keeping the business within the family or ensuring continuity among dedicated team members can be a compelling reason to not pursue a sale at all. However, many owners do not have family in the business and would like to pass ownership on to a new entity who shares similar values. Equally important is the well-being of the people within the organization. Many business owners prioritize the protection and support of their employees during the transition process. Selling the business with the intention of preserving jobs, providing growth opportunities, and maintaining a positive work environment demonstrates a genuine concern for the team that has contributed to the business's success. Such considerations can generate a sense of loyalty and goodwill among potential buyers, further enhancing the business's appeal and value. It is also important to have candid conversations with potential buyers early on in the process to see alignment with your intentions are met before the deal is too far down the line. Another aspect that holds meaning for some business owners is the legacy of the name and reputation they have built over the years. A strong and respected brand carries intrinsic value, representing the hard work, integrity, and quality associated with the business. Preserving the legacy of the name becomes an essential objective, ensuring that the business's identity and positive standing in the market endures even after the ownership transition. Valuation expectations are a crucial element in the decision to sell a business. Every owner has a desired financial outcome from the sale, whether it is to fund retirement, pursue new ventures, or secure their family's future. Understanding the realistic value of the business and aligning it with personal expectations is a critical consideration. Owners must assess whether their valuation expectations are attainable in the current market or if further growth and strategic positioning are necessary to meet those goals. Ultimately, the personal goals of the business owner, encompassing the aspirations for the next generation, the well-being of the organization's people, the preservation of the business's legacy, and the desired financial outcome, shape the entire process of selling a services business. By integrating these personal goals with the broader considerations of the market, profitability, customer dynamics, and organizational structure, owners can make well-informed decisions that honor their legacy while ensuring a successful transition to new ownership. The Right Time to Sell To ensure a successful sale of your services business, taking action now is crucial. Evaluate the key factors discussed - performance of the business, market conditions, and personal goals. Assess your business objectively, identify areas for improvement, and implement strategic measures. Seek professional guidance if needed. By proactively addressing these factors, you can position your business for a successful sale that maximizes its value. Don't wait - start preparing for a lucrative exit strategy today.

Technology has enabled B-TO-B buyers to use e-commerce for buying and researching products and services online. Technology has also allowed B-TO-B buyers to use social media to connect with vendors and salespeople on their terms. B-TO-B companies and salespeople need new skills and training to meet the expectations of the next level buyers. Important Points Driving B-TO-B revenue growth requires well-defined and ongoing sales training programs. After working with more than 800 sales managers and salespeople, we found less than half possess the capabilities required to drive growth. Providing sales teams with next-level capabilities takes effort, but the ROI is significant. B-TO-Bs having the most success provide a more consultative and solution-oriented approach with their customers. This requires strong product knowledge and a well-thought-out value proposition for the customer. Our research in interviewing thousands of salespeople and managers has shown there are two common threads in successful salespeople: organization and relationship skills. Over the past 30 years, the executives at Sellside have seen buyers shift from relying exclusively on salespeople for product knowledge and purchases, to using multiple channels in their buying process. B-TO-B customers often research and use websites, social media, reviews, and videos in addition to meeting and speaking to a salesperson. To become world-class in today’s digital environment, B-TO-B sales organizations will need to make two significant shifts in the way they lead teams and approach clients; become proficient in multi-channel sales and communications and implement a solution-oriented recurring revenue mindset. They will also have to strengthen their core skills of relationship building and organization. As less than half of the sales teams have the tools and skills to achieve these changes, significant training and development for B-TO-B sales organizations will be required. At Sellside Group we have a simple formula, Success = Work Effort + Attitude + Skills. We believe the people on any team need to have a great work effort and attitude and then it is the managers and the company’s responsibility to make sure the people with great work efforts and attitudes have all the tools, skills and training they need to be successful. Here’s what you need to give those top performers the skills required to deliver outstanding performance in this next era of B-TO-B Sales. 1. Become Proficient in Multi Chanel Sales and Communications As B-TO-B buyers have become more comfortable and proficient buying online and using social media, they have more transparency, more choices, more ways to communicate and more ways to get information. Sales teams need to embrace these new technologies and in addition to being out in the field visiting customers, use email, texting, chatting and phone calls to communicate with buyers. Social media platforms like LinkedIn are great ways to research a buyer, contact a buyer, get referrals and build trust through a shared network. In our research, salespeople fear new e-commerce systems will replace them. However, that is not the case. There are many strategies that can be used to integrate the salesperson into the e-commerce experience to build trust with the buyer, the sales rep., and their company. 2. Implement a solution-selling & recurring revenue mindset With the rise of larger e-commerce players, Companies need to develop programs that add value for their customers and build recurring revenue streams. Salespeople need to add value to their customers through service, training and dependability. Sales teams need to be highly trained experts in their field to add a level of dependability and service their customers expect. Great sales teams will partner with their customers to design a customized value proposition and relentlessly work to show and document the value. An MRO company we worked with was selling its customers one off products by using a method called pitch, demo and close. The sales team ate what they killed every day, and the company was always trying to figure out what was going to be sold each day to support the business. We developed a contractual based model where the sales team would make a friend, find the issues, show the solutions and ROI, and develop a proposal which included service, storage hardware and the products on a monthly contract. This solution-selling, recurring revenue model gave the commission-based sales team a stable income and allowed the company to better plan its inventory and properly support customers. The program benefited the customer by saving them money in parts, labor and downtime costs. 3. Become proficient at Relationship Building Making a friend is the foundation of any great relationship. With all things being equal people want to do business with people that they like and trust. It is surprising how many salespeople go right into a presentation about themselves, their company and their products without investing the time to get to know their potential customer both personally and professionally. For sales teams to become a trusted advisor they first must earn the trust of their customer and that starts with a solid relationship. Once trust and a friendship are built it is much easier to open new accounts and then build on those accounts. Your newfound friend/customer will also be happy to supply you with the holy grail of leads, “REFERALS”. Companies need to make sure they have a proven sales process that combines the relationship building skills with the solution selling and closing skills into a great sales process that can be taught the same way over and over again to both new and experienced salespeople. To Maximize the results there needs to be a program of initial training and continuing education. Just like great sports teams need to practice the same is true with great sales teams. 4. Become highly organized In our research with thousands of salespeople over the years and studying what the top performers had in common, some had great personalities, some were highly motivated, some had amazing work efforts, some came from the industry, some were new to the industry. We found there was only one common thread among all of the high performing salespeople and that one thing was Organization. All the top performers where highly organized. They knew exactly where they were going each day. They kept excellent records on their customers and prospects and knew everything about them, from their personal lives to knowing what they needed to do their jobs better. They knew what happened in the previous call and what they needed to do in the next call. Having a great CRM system, teaching the sales team how to use it and having the managers follow up to ensure the salespeople are using it in the right way makes becoming organized much easier for your sales team. Building a new program and implementing change When we make changes, training and implementation of the desired new skills and programs always starts with the Sales Managers. If the Sales Managers are onboard, they will work hard to get the salespeople on board. Bring the Sales Managers into the program early and give them input into designing and developing the program. Once the program is developed, have the sales managers go out in the field and use it and get some success. Make iterations based on their feedback to fine tune the program and then train the managers how to teach the salespeople the program and the new skills they will need to be successful.

Perfect your elevator pitch. Research the interviewer. Practice your answers. Prepare challenging questions. Memorize the company’s mission statement. These are the first steps you’ll come across in a quick Google search for “Interview Tips.” Although such advice is essential for any interview, the real wow factor in any interview is you. Whether it be a case study, a pitch, or even just an in-depth behavioral interview, each firm has its own method for thoroughly interviewing a candidate. As a hiring manager, I have conducted what seems like hundreds of interviews, each evaluating a pre-prepared project that every candidate is free to develop however they choose. What candidates often misconstrue is that we are not evaluating how accurate their answers are but rather their ability to think through a problem and arrive at a solution. Thus, you can master the company’s purpose, list off an excellent pedigree of past experiences, or even have pi memorized; however, the crucial element of any interview are the so-called “soft skills” the candidate possesses. Being on the other side of the interview, I’ve seen firsthand that one’s process to getting to an answer is more important than the answer itself. The meaning and significance behind a previous role are more important than the job itself. One’s eloquence is more important than their ability to ramble off a list of questions or memorize a pitch. But most of all, I’ve witnessed that, for better or worse, how someone presents themselves on paper may be entirely different from the persona that they emulate in real life (or on Zoom). So next time you have an interview, stop and think about why you want the job itself and how you can let your personality and critical thinking skills shine.